§ 570.12 (7) (emphasis added). 6 Unlike the string formula method shown in Table 1 , the “three column” approach in Table 2 does away with explicit math symbols like +, -, ×, and ÷, largely because of the limited space available on a sheet of paper. However, this does not mean the math is absent; rather, it is assumed that readers are savvy enough to understand that these mathematical operations are implied. Indeed, I have never had a client question how to calculate or verify the decimal interest from the data provided in the ownership tables—they implicitly understand the process. 7 See , 52 O.S. § 570.1 et . seq . Cline v. Sunoco, Inc. , 479 F. Supp. 3d 1148 (E.D. Okla. 2020) (holding that the industry-wide practice of withholding interest on late royalty payments until such interest is specifically requested by an owner is contrary to Oklahoma law requiring automatic interest for late payment of proceeds—resulting in a judgement against a first purchaser of $150 Million in actual and punitive damages.) 8 The Oklahoma Supreme Court in Hull v. Sun Ref. & Mktg. Co. , 1989 OK 168, held that the only condition justifying the suspension of royalty payments is the existence of unmarketable title, not the execution of a division order. Therefore, lessors with marketable title are entitled to royalty payments without the necessity of signing a division order, and any custom or usage requiring such execution was deemed contrary to the public policy established by Oklahoma law. 9
Tina Walker, Copyright © 2025
About the Author: Tina Walker –
Tina Walker is co-founder of Walker Law, PLLC, focusing on oil and gas title examination across Oklahoma, Kansas and North Dakota. With over 18 years of experience as a landman and attorney, she helps clients work through complex oil & gas title issues. Tina is dedicated to educating others about the oil and gas industry. Contact her at twalker@wwlawoffices.com . Endnotes 1 Oil and Gas Title Opinions: Structuring and Format, State Bar of Texas, OIL, GAS & MINERAL TITLE EXAMINATION COURSE , June 25-26, 2015, Houston, Chapter 17, presented by Paul Yale of Gray Reed & McGraw, P.C., Houston, Texas. 2 For purposes of this article, a mathematical constant is a specific number whose value does not change; it remains the same regardless of the context or the problem at hand. See, e . g ., https://www.geeksforgeeks.org/constant-in-maths/ 3 In the interest of full disclosure, as a young lawyer I worked at a well-respected Midland, Texas oil and gas law firm examining titles and rendering title opinions covering lands in west Texas and southeast New Mexico. 4 Yale, at p. 11. 5 Obviously not all Oklahoma practitioners use the term “Decimal.” However, I chose to use the term for four (4) reasons: 1. The term “Decimal” distinguishes the interest from the lease “NRI;” 2. The WI and lease NRI are expressed as six-digit percentages, whereas the proportionally reduced net revenue interests are expressed as eight-digit decimals. This is also consistent with the view of Paul Yale, where is notes: “Working interests are traditionally expressed as percentages, whereas net revenue interests are almost invariably expressed as decimals.” Yale, at p. 19; 3 The National Association of Division Order Analysis Model Form Division Order uses the phrase “decimal interest’’ in reference to production or proceeds ( see , Division Order Model Blank Form 2017 v2; and, 4. The Oklahoma Production Revenue Standards Act requires that the “Owner’s interest, expressed as a decimal , in production from the property” be included on the payment check stub. 52 O.S.
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Under Texas Division Order Law, specifically Tex. Nat. Res. Code § 91.402 (2023), the requirement for all owners to sign indemnifying division orders pertains to the following: Indemnity Provision: The division order must include an indemnity clause where the payee (owner) agrees to indemnify and hold the payor harmless from all liabilities resulting from payments made in accordance with the division of interest specified in the division order. This includes liabilities from legal actions like attorney fees or judgments related to the owner’s interest. Operator’s Liability: Regarding the operator’s liability for interest payments on suspended royalties: The law allows the payor (operator) to withhold payments without interest if there is a dispute concerning title, doubt about the payee’s authority to sell the production, or if there’s a requirement in a title opinion that places in question the title, identity, or whereabouts of the payee; The payor is protected from common law breach of contract claims for withholding payments under these conditions unless specified otherwise in the contract; and
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N at i onal A ssociation of D i v i s i on O rder A nalys t s
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