Revised Division Order / Documentation Question

Division Orders
1

Background: I have a small Non-Participating Royalty Interest (NPRI) in a contiguous plat of land in two EOG units (Sweet and Ullman) in Gonzales County, Texas. I was unaware that I had this interest, and in August 2010, I ratified a 43.138 acre lease. Through some online research it appeared I had 50.25 acres through a warranty deed. I inquired about this difference, but did not get any responses probably since I had already signed it. When the first division orders came out in summer 2011 for the two units my total acreage was 52.99 acres. I inquired again and was told when they surveyed the property the total acreage came to 52.99 acres. I asked if I needed to sign another lease ratification with this new total. I was told this was not necessary since as an NPRI, I was just ratifying the lease and the Mother Hubbard clause in the lease would cover any additional acreage found. I asked a landman and EOG Division Analyst for documentation showing the correct acreage and never received anything. Then in July 2012 I received a revised division order for one of the units because that unit size changed, and my acreage in the unit increased 3.13 acres. So now the total is 56.12 acres. I called again and talked to same people and basically got the same response.

Questions:

  1. Although I do not plan on selling my interest, how important is it to have the correct acreage in some kind of document?

  2. Where and how would I get this documentation? I already have the warranty deed where the minerals were conveyed…but this shows 50.25 acres. I understand the deed says more or less, but 5.87 acres or 11.7 % is a bit much in my opinion.

  3. How likely will these totals keep changing?

Thank you for any advice you can give.

2

From what you state here, in the Deed when the NPRI was created, the NPRI applied to 50.25 acres. But according to you, you ratified a lease pertaining to only 43.138 acres. Somebody else owns the minerals and executive rights underneath the remaining acres (50.25-43.138), and you would have to ratify THEIR lease as well if their acreage is in the drilling unit too. Take another look at the Ratification you signed. Are you sure that it pertains to only ONE lease and not TWO or more leases? If it pertains to more than one lease, they should all be listed there somewhere. If you know that you ratified only the 43.138-acre lease, I bet that the Operator neglected to ratify your royalty interest underneath the 50.25-43.138 acres. In my opinion, the difference between 50.25 and 56.12 could be explained by a survey, but NOT the difference between 43.138 and 56.12. Happy Hunting!

'm guessing it pertained to more than 56.12 acres and that your acreage amounts keep going up because the Operator keeps amending the proration unit