What is a division order?
Once title has been “cleared” (i.e., verified by a title opinion) and a producing well has been drilled, a division order authorizing the sale of production from the well is sent to all royalty and working interest owners for their signatures. The division order sets forth the decimal interest of production owned by each party, their addresses and tax identification numbers or social security numbers, and a legal description of the property on which the well is located. Once the royalty owners have signed the division order, they may be put into a “pay status” to begin receiving royalty payments.
A Division Order is a document issued by the crude oil purchasing company (Bi-Petro) to an interest owner that initiates the payment process for the payment of proceeds accruing from an interest in oil or gas production. The Division Order identifies the lease/property from which the oil is being produced, the operator of the lease, the name of the owner to whom payment will be made, the share of the oil being credited to the owner, the effective date that payment will begin, and any special circumstances affecting the owner’s interest or payment. The Division Order is to be completed by the owner who must provide the proper tax identification number or social security number, the mailing address to which checks should be mailed, daytime contact information and signature. By signing the Division Order, the owner certifies that he owns the interest set forth in the Division Order (or has the right to receive payment for the interest). Signed division orders must be returned to the purch
A Division Order is a document Marathon issues that describes the property, the operator, the legal description, the owner’s remittance address and tax ID information, if known, as well as the owner’s decimal interest in the property. The Owner is asked to sign and return the Division Order. Marathon uses this information to remit proceeds to the owner if Marathon has the disbursement responsibility.
