Kansas Division Order

• Category: Oil Gas and Minerals - Division and Transfer Orders
• State: Multi-State
• Control #: US-OG-068
• Format: Word; Rich Text

Description

This is the model form which many companies now use. A Kansas Division Order is a legal document that outlines the ownership rights and distribution of revenue from oil and gas production in the state of Kansas. It serves as a contract between the mineral rights' owner (lessor) and the oil and gas company (lessee) operating on the property. Key elements of a Kansas Division Order include the precise legal description of the property, the names and addresses of the lessor and lessee, the effective date of the agreement, and the proportional interest of each party in the mineral rights. It also specifies the terms for the payment of royalties, the method of calculating and distributing revenue, and any applicable deductions or expenses. There are two main types of Kansas Division Orders based on how the royalties are calculated and distributed. The first type is the "Fractional Royalty Interest" order, where the lessor is entitled to a certain percentage or fraction of the total revenue. For example, if the lessor owns a 1/8th interest, they would receive 12.5% of the royalties. The second type is the "Decimal Interest" order, where the lessor's ownership interest is expressed as a decimal number. The decimal interest is calculated by dividing the acreage owned by the total acreage being developed. For instance, if the lessor owns 40 acres out of 320 acres, their decimal interest would be 0.125 (40/320). Once the Kansas Division Order is signed, it allows the oil and gas company to commence drilling and production activities on the property. It also serves as a basis for the accurate calculation and distribution of royalties to the lessor. In summary, a Kansas Division Order is a legal document that establishes the ownership rights, proportionate interests, and revenue distribution between the lessor and lessee in oil and gas production. By incorporating the relevant keywords such as Kansas Division Order, ownership rights, revenue distribution, royalties, fractional royalty interest, decimal interest, and mineral rights, this description provides a comprehensive overview of the topic.

A Kansas Division Order is a legal document that outlines the ownership rights and distribution of revenue from oil and gas production in the state of Kansas. It serves as a contract between the mineral rights' owner (lessor) and the oil and gas company (lessee) operating on the property. Key elements of a Kansas Division Order include the precise legal description of the property, the names and addresses of the lessor and lessee, the effective date of the agreement, and the proportional interest of each party in the mineral rights. It also specifies the terms for the payment of royalties, the method of calculating and distributing revenue, and any applicable deductions or expenses. There are two main types of Kansas Division Orders based on how the royalties are calculated and distributed. The first type is the "Fractional Royalty Interest" order, where the lessor is entitled to a certain percentage or fraction of the total revenue. For example, if the lessor owns a 1/8th interest, they would receive 12.5% of the royalties. The second type is the "Decimal Interest" order, where the lessor's ownership interest is expressed as a decimal number. The decimal interest is calculated by dividing the acreage owned by the total acreage being developed. For instance, if the lessor owns 40 acres out of 320 acres, their decimal interest would be 0.125 (40/320). Once the Kansas Division Order is signed, it allows the oil and gas company to commence drilling and production activities on the property. It also serves as a basis for the accurate calculation and distribution of royalties to the lessor. In summary, a Kansas Division Order is a legal document that establishes the ownership rights, proportionate interests, and revenue distribution between the lessor and lessee in oil and gas production. By incorporating the relevant keywords such as Kansas Division Order, ownership rights, revenue distribution, royalties, fractional royalty interest, decimal interest, and mineral rights, this description provides a comprehensive overview of the topic.