Having the opportunity to view a relative’s division order and as is typical, more questions.
Does anyone here understand the interest types listed on the division order as NEMI, NEMI1, NEMI2, NEMI4 and NEMI5? as well as the standard R1. This individual had interest in five wells from this one pad, but this unit was the only one with these unfamiliar designations.
I had the opportunity to view a monthly pay statement and that may have been more confusing than anything yet. The NEMI pay columns were minuscule, one, two or three dollars.
@WhatsamattaU, NEMI probably stands for “Non-Executive Mineral Interest”. The owner of a NEMI can’t negotiate a lease, but retains the other rights of a mineral owner. Perhaps the surface owner wanted to retain the lease negotiation rights, or there could be a lot of other reasons. NEMI’s can still receive bonus or delay rental payments, while NPRI’s typically do not.
Thank you. We had uncovered the definition, but it still really doesn’t help a lot.
My father-in-law is the primary mineral holder, but a few parcels are owned by his deceased wife’s trust.
Of the wells he is involved in so far, only one involves this NEMI designation. In fact, that one well has five separate decimal divisions. One regular R1 and four separate NEM’s.
For practical purposes, are those small interests part of his overall interest in that well?
@WhatsamattaU, yes, the NEMI’s would be part of your father-in-law’s overall interest in the well.
The Division Order confirms this, and the pay stub detail might also show that these interests all add together. Hard to say how this evolved without seeing all the underlying deeds or assignments, but it is certainly possible to have more than one kind of interest in the same well. Many times an owner might have a mineral/royalty interest along with an ORRI on the same well, or an RI with an NPRI. For practical purposes, the proceeds from each interest get added together to contribute to the total proceeds from the well.
You can always have the relative call the Division Order analyst with the operator and have them explain each of the NEMI breakout lines. Sometimes, they might be other working interest partners take in kind lines.
Pete, that is helpful to know I can the division order decimals to determine total interest in the well.
Actually, I have been using the formula others here provided to determine net acreage interest in each well…. (Decimal x total acres in unit \ royalty interest = net acres in unit)
The NEMI 1,2,4,5 threw me. I wasn’t certain if those small decimal interests were some sub-category of a larger R1 interest, or if they were actually small separate interests.
I would love to discuss this with the Antero Customer Service, however that appears unlikely.
Since we received our first division order in November, I have sent a total of five emails and left two pleasant and detailed voice mails. To date, I received one return email with a partial answer that really did not address the question.
Otherwise……crickets.
It truly is almost like solving a riddle when you suddenly find yourself in the enviable but frustrating position of piecing all this royalty business together.
Quite honestly, I’m amazed that dealings with so much potential value are conducted with so little communication and understanding by the mineral owner.
In the end, lessor and lessee should be partners in these endeavors, and more thorough information would go a long way toward fostering a better working relationship in my opinion.
What it boils down to usually is the “in house” people at these companies really don’t want to have to deal with it on your time frame. They want to take their “sweet time” and “pass the buck” to another department. Sort of like the Federal Government. It’s a “stall tactic” in a lot of cases. Very fractured title of many little bits and pieces or fractions. Also try sending certified letters or paper work to the companies “legal department” return receipt requested.
We are in the same situation. I’ve found some oil company employees to be so pleasant and helpful; others to not respond at all. I’ve signed up for Mineral IQ, hoping that would help straighten somethings out. Thanks for the net acreage interest formula; didn’t know that. Good luck with your search, and keep on asking questions. There are lots of us out here looking for the same answers.
The R2 designation indicates there is more than one royalty treatment status; although, you most likely determined something similar. R1 could bear some share of sales cost; whereas, R2 may be a cost free royalty. Contact the purchaser for the true definition.