Kentucky 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. Kentucky Division Order is a legally binding document used in the oil and gas industry that outlines the allocation and distribution of revenues generated from the production of oil and gas wells in Kentucky. It serves as an agreement between the oil and gas company (the operator) and the royalty owners, mineral owners, and working interest owners (the non-operating parties). The Kentucky Division Order typically includes crucial information such as the name of the well, the names and addresses of the royalty and working interest owners, the decimal interest owned by each party, the size of the tract and the property description, the operator's contact information, and the commencement date of the division order. This comprehensive document ensures transparent and accurate distribution of proceeds to all entitled parties involved in the well. There are several types of Kentucky Division Orders, including: 1. Royalty Division Order: This type of division order is issued to royalty owners, who own a specific percentage or fraction of the minerals or royalties produced from the well. Royalty owners typically do not bear any expenses or operational costs associated with oil and gas extraction. 2. Overriding Royalty Interest (ORRIS) Division Order: When a working interest owner sells or assigns a percentage or fraction of their revenue interest to an overriding royalty interest holder, an ORRIS division order is issued. The ORRIS holder is entitled to a portion of the revenue generated from the well, but they are not responsible for the well's operational costs. 3. Working Interest Division Order: This type of division order is issued to parties who own a working interest in the well. Working interest owners are responsible for a share of the operating expenses and have a proportionate share of the risk as well as the right to share in the revenue generated by the well. It is essential for all parties involved in the Kentucky Division Order to carefully review and understand the terms and conditions outlined in the document before signing. Legal advice is often recommended ensuring that the agreement is fair and accurately represents the ownership interests of all parties concerned. The Kentucky Division Order plays an integral role in the oil and gas industry by facilitating proper revenue distribution and establishing clear rights and responsibilities among all stakeholders involved in the production process.

Kentucky Division Order is a legally binding document used in the oil and gas industry that outlines the allocation and distribution of revenues generated from the production of oil and gas wells in Kentucky. It serves as an agreement between the oil and gas company (the operator) and the royalty owners, mineral owners, and working interest owners (the non-operating parties). The Kentucky Division Order typically includes crucial information such as the name of the well, the names and addresses of the royalty and working interest owners, the decimal interest owned by each party, the size of the tract and the property description, the operator's contact information, and the commencement date of the division order. This comprehensive document ensures transparent and accurate distribution of proceeds to all entitled parties involved in the well. There are several types of Kentucky Division Orders, including: 1. Royalty Division Order: This type of division order is issued to royalty owners, who own a specific percentage or fraction of the minerals or royalties produced from the well. Royalty owners typically do not bear any expenses or operational costs associated with oil and gas extraction. 2. Overriding Royalty Interest (ORRIS) Division Order: When a working interest owner sells or assigns a percentage or fraction of their revenue interest to an overriding royalty interest holder, an ORRIS division order is issued. The ORRIS holder is entitled to a portion of the revenue generated from the well, but they are not responsible for the well's operational costs. 3. Working Interest Division Order: This type of division order is issued to parties who own a working interest in the well. Working interest owners are responsible for a share of the operating expenses and have a proportionate share of the risk as well as the right to share in the revenue generated by the well. It is essential for all parties involved in the Kentucky Division Order to carefully review and understand the terms and conditions outlined in the document before signing. Legal advice is often recommended ensuring that the agreement is fair and accurately represents the ownership interests of all parties concerned. The Kentucky Division Order plays an integral role in the oil and gas industry by facilitating proper revenue distribution and establishing clear rights and responsibilities among all stakeholders involved in the production process.