Puerto Rico Division Order is a legal document that establishes the rights and obligations of various parties involved in the exploration, production, and distribution of oil, gas, or mineral resources in Puerto Rico. It serves as a guideline for resource owners, operators, and working interest owners, ensuring fair distribution of proceeds and clarifying ownership interests. The Puerto Rico Division Order is typically executed between the resource owner (royalty interest owner) and the operator (oil or gas company), outlining key aspects such as well locations, leasehold interests, acreages, lease production volumes, and revenue distributions. It plays a vital role in managing and governing the extraction and revenue-sharing process, ensuring transparency and facilitating smooth operations. Different types of Puerto Rico Division Orders may exist depending on the various agreements and circumstances of the resource development. Some of these types include: 1. Working Interest Division Order: This type of division order involves multiple working interest owners who jointly fund the exploration and production activities. The document specifies their share of costs and revenue distributions based on their respective ownership percentages. 2. Royalty Interest Division Order: This division order typically concerns the distribution of royalty payments to the resource owner based on their ownership percentage. Royalties are a portion of the production revenue paid to the owner who leased their land to the operator. 3. Overriding Royalty Interest (ORRIS) Division Order: When a third party, usually not the resource owner, holds an overriding royalty interest, this division order governs the distribution of proceeds from the resource's production. ORRIS holders typically have a fixed percentage interest, often higher than regular royalties. 4. Non-Participating Royalty Interest (NPR) Division Order: In situations where the resource owner has leased only the mineral or royalty rights without retaining working interests, NPR division orders define the distribution of revenue generated from production activities among the owner and working interest owners. These are just a few examples of the different types of division orders that may exist in Puerto Rico. The specific terms, conditions, and stakeholders involved vary depending on the particular agreements and legal frameworks governing the resource development operations.