A division order often arrives in the mail soon after a well near you starts producing. It looks like routine paperwork, but it sets the share of production you will be paid on. Kostrub Law Firm, PLLC has helped owners from Cecil Township check these forms before signing. Division order review is part of our full Washington County oil and gas practice.
What happens after you call: we ask you to send the division order, your lease, and your deed, then check the numbers and explain them.
What a division order is
So, what is a division order? In oil and gas, it is a form from the operator (or the company buying the gas) that states
- Which well or unit you are paid from
- Your decimal interest, the exact fraction of production revenue that belongs to you
- Your type of interest, such as royalty interest (RI) or working interest (WI)
- Your name, address, and tax ID for payment
The operator asks you to sign it to confirm that information. A division order is not supposed to change your lease. Its job is to pay you correctly under the lease and your title.
How your decimal interest is calculated
For a typical royalty owner in a pooled unit, the math looks like this
(Your net mineral acres ÷ total acres in the unit) × your royalty rate = your decimal interest
Hypothetical example: you own all the oil and gas under 40 acres, your land is in a 640-acre unit, and your lease pays a 15% royalty.
40 ÷ 640 = 0.0625
0.0625 × 0.15 = 0.00937500
If you own only half of the gas under those 40 acres, your net mineral acres are 20, and your decimal is half as large. Errors usually come from the wrong acreage, the wrong royalty rate, or a missed co-owner. Our blog explains how to read a division order line by line.
Pennsylvania law that matters
- Your lease controls. Courts generally treat a division order as subordinate to the lease. Still, signing one that states different terms can create disputes. Pennsylvania does not have a detailed division order statute like some other producing states.
- Minimum royalty. 58 P.S. § 33 requires at least a one-eighth (12.5%) royalty. Your decimal should reflect at least that rate on your share.
- Royalty statements. Act 66 of 2013, 58 P.S. §§ 35.1–35.2, amended by Act 153 of 2022, requires statements with your decimal interest, volumes, prices, and deductions. Compare these against your division order.
- Unit size. Act 64 of 2013, 58 P.S. § 34.1, allows cross-unit drilling in some cases, which can change how production is allocated among units.
- Unclaimed funds. Payments held too long may be reported to the Pennsylvania Treasury under the unclaimed property law, 72 P.S. § 1301.1 et seq..
Common situations in Washington and Allegheny counties
- A division order shows fewer acres than your deed describes
- The royalty rate on the form is lower than the rate in your lease
- An heir receives a division order for a parent’s interest, but the estate is not settled
- The form includes extra language about pricing, deductions, or “ratifying” the lease
- Payments are held in suspense because a co-owner has not signed or cannot be found
- A new unit is formed, and your tract appears in more than one well
What happens if you don’t act
If you do not sign, payments may be held in suspense. If you sign without checking, an error in your decimal can underpay you on every check for the life of the well. Errors can be fixed later, but recovering past underpayments is harder than catching the problem at the start. Watch for added language that might change lease terms.
Got a division order in the mail? Call (304) 982-1586 · Request a consultationAfter you call, we tell you exactly which documents to send so we can check your numbers.
How we handle it, step by step
- Collect documents. Division order, lease, deed, and any title papers.
- Confirm ownership. We check your net mineral acres and any co-owners. If title is unclear, we may suggest a title review for your tract.
- Recalculate the decimal. We compare our math with the operator’s using the unit plat and your lease royalty.
- Read the fine print. We flag any terms that go beyond confirming ownership and payment.
- Contact the operator. If something is off, we send a written request for correction.
- Check the first statements. We compare early royalty statements to the corrected decimal. If underpayments continue, we discuss options for a royalty dispute.
What to bring to your first meeting
- The division order and cover letter
- Your oil and gas lease and any amendments
- Your deed and older deeds or estate papers
- The unit plat or declaration of pooling, if you have it
- Any royalty statements you have received
- Names of co-owners in the same tract
Fees
We explain fees in writing before we start. We explain how we charge, and what to expect, at your first consultation. Most division order reviews have a narrow scope, and we tell you up front if your matter needs more work.
Who handles this
Daniel B. Kostrub reviews division orders for the firm and handles related title opinions, lease review, and mineral rights work. J.D., 2002–2005. Read about Daniel B. Kostrub’s practice or meet us in Cecil Township.
Frequently asked questions
What is a division order in oil and gas?
It is a form from the operator or gas purchaser that lists the well, your decimal interest, your interest type, and your payment details. You are asked to sign it to confirm that information. It is meant to pay you under your lease and title, not to change your lease terms.
Do I have to sign a division order?
Operators usually ask for a signed division order before they release payment. Before signing, check that the decimal, acreage, royalty rate, and names are correct. Also look for added language about pricing or deductions. If something is wrong, ask for a correction in writing before you sign.
How do I check my decimal interest?
Divide your net mineral acres by the total acres in the unit, then multiply by your royalty rate. For example, 40 acres in a 640-acre unit at a 15% royalty gives 0.009375. Compare your result with the decimal on the division order and your royalty statements.
Does a division order change my lease?
It is not supposed to. Courts generally treat the lease as controlling. But some forms include language about prices, costs, or ratifying the lease. Signing those terms may create arguments later, so read every paragraph and question anything beyond ownership and payment.
Why are my royalties in suspense?
Operators hold payments when they cannot confirm who should be paid. Common causes include an unsettled estate, a missing co-owner, an unsigned division order, or a title defect. Once the operator receives what it needs, it can release the funds, often with the amounts that built up.
What should I do if my division order is wrong?
Write to the operator’s owner relations department, explain the error, and include your deed and lease. Keep copies. If the company does not correct it, an attorney can review your title and lease, recalculate your share, and press the operator for a written fix.
Have your division order checked
Call (304) 982-1586 or ask for a division order review. After you call, we tell you which papers to send, check your decimal, and explain whether anything needs correcting before you sign.
This page is general information, not legal advice. Reading it does not create an attorney-client relationship.