Owner Relations FAQ
What is a Division order?
Once title has been “cleared” and a producing well has been drilled, a division order authorizing the sale of production from the well is sent to all royalty and working interest owner for their signatures. The division order sets forth the decimal interest of production owned by each party, their addresses, and a legal description of the property on which the well is located. A tax identification number or Social Security number is also required on the form in order to avoid backup withholding deduction of 28% as provided under the IRS regulations which may make an address correction on the division order. The owner’s signature on the form will allow us to make the address change on our records prior to making a royalty payment. Attached to the division order may be an Exhibit A showing the breakdown of tract in unit, the interest of the party and the calculations determining the decimal interest.
The division order is not a legal document it does not need to be notarized. Think of the division order as a courtesy notice, notifying you that we have drilled and are receiving production on land that you own mineral interest in or that you live on. By signing the division order you agree to the decimal interest and everything we have on the order as current.
Do I need to fill out a W-9 every time I receive one?
No, once we receive your information in the system there is no need to fill out another W-9 unless there are changes in ownership.
What is an oil and gas lease?
An oil and gas lease is a written agreement in which a mineral owner (the “lessor”) allows another person or company (the “lessee” ) to explore for, drill and produce oil or gas on specified lands for a certain period of time in exchange for the payment or royalties. The lease provides a legal description of the property, the amount of royalty to be paid (typically expressed as a fraction, e.g., 1/8 or one-eighth).
What are royalties?
Royalties are the mineral owner’s share of production sold as reserves in an oil and gas lease. The royalty amount is usually expressed as a fraction of the total amount of hydrocarbons produced and sold from the leased premises.
What is clearing title?
Before obtaining an oil and gas lease, drilling a well, or making payments under a division order, the person or company determines who owns title to the surface, mineral, and royalty and working interests in the land. Title is typically determined by a title opinion, which an attorney’s written legal opinion is based upon an examination of the real property records in the county where the land is located. The opinion often requires that curative instruments be obtained before the property interest is purchased, drilled on, or revenue payments are made.
When it comes to requirements the owner will need to speak to the division order analyst who handles that area or well. Always recommend that the owner consult an attorney practicing in the respective state in which the property is located.
What is a spacing unit?
A spacing unit is an area allotted to a well by regulations or field rules issued by a governmental authority having jurisdiction for the drilling over the drilling and production of a well. Whiting typically has 1280.00 acre spacing units.
How is my interest calculated?
First you need to figure what the spacing unit Whiting has many different sized spacing units. For our example the spacing unit is 1280 acres, which comprises two sections of land.
You own 20 acres in Tract 1 and you have leased that acreage at a 1/8th royalty.
The total acreage in the unit = 1280 acres.
The calculation would be as follows:
20/1280= .015625 your ownership in the unit x your 1/8th royalty (or .125) = the decimal on the division order.
What is an “owner number” where can it be found and what is its purpose?
Whiting assigns each of its interest owners a unique owner number for internal identification purposes. Please include your owner number when communicating or corresponding with Whiting. The owner number can be located on your check on the right side just under the oil drop. Also the owner number is located on your division order on the right side inside the bold box found on page four.
What are the common ownership interest types shown on my check and what do they mean?
WI. Working Interest: The exclusive right granted to the lessee to explore for and to produce and own the oil and gas located under the lands covered by the oil and gas lease. The working interest owners bear all costs of exploration, development and operation. These owners should receive a copy of the current Division Order Title Opinion.
RI. Royalty Interest: Lessor’s share of production as set forth in the oil and gas lease.
ORRI. Overriding Royalty Interest: A percentage share of production or the value derived from production, which is free of all costs of drilling and producing and is created by the lessee or working interest owner and paid by the lessee or working interest owner.
Usually, the term of an ORRI is for the life of the oil and gas lease.
Below is Whiting Petroleum Corporation royalty owner detail:
Of course royalty owners may go to Electronic Funds that can be directly deposited into their account. At that time the revenue owner will have to obtain deposit detail from the energylink.com website. You will be asked your owner number and will have to make a user name and password.
Direct Deposit form can be found on www.Whiting.com under owner info tab on the internet.
When are checks issued?
Typically we run all of our revenues at the end of each month. Whiting produces in 16 states so please allow until the 15th to receive your check.
What should I do if I do not receive my royalty check?
For various reasons, a check may arrive a few days late. If you check is more than two weeks late, please contact Whiting. A frequent reason for not receiving a royalty check is that your account has not reached its “minimum pay status” Whiting typically remits revenue to owners once an account balance exceeds $100, or at year-end, whichever comes first or as dictated by the laws of the state the property is in. Occasionally, payments are held due to title matters that create uncertainly as to ownership, such as notice of death, change of address, transfer of property, assignment of interest, or legal dispute. Payments due are accumulated and release when the matter affecting ownership has been resolved.
I have lost my check, what do I do?
Please contact Maura McGary Owner Relations at 303-357-1419 or Maura.McGary@whiting2.o2dev.net
Be sure to clearly state your name, owner number, phone number and or e-mail address.
What do I do if I find a check that is more than 90 days old?
Our bank will not honor checks that have been outstanding for more than 90 days. If an owner discovers that its check is stale dated, they should return the check to Whiting attention Accounting Department. If the returned check has not previously been reissued to the owner, it will be voided and the entire amount of the check will be credited to the owner’s account or sent in the mail. This will happen on the next regularly schedule check process.
How do I change my address?
Please promptly notify Whiting of any change in your mailing address. This notice must be in writing and signed by you or your official representative. Please include your name, owner number, Social Security number, old address and new address, including the zip code. For your protection, address changes are not accepted by telephone. Please send address change to Whiting Petroleum Corporation 1700 Broadway, #2300 Attention: MeMe O’Brien Denver, CO 80290-2300 or e-mail to MeMe.Obrien@whiting2.o2dev.net
How do I change my name in Whiting’s records if I get married or divorced?
Please provide Whiting with a written request to change your name. Your request should include your old name as it appears in our records, your new name, and a court certified copy of the marriage certificate, divorce decree, or court ordered name change.
How do I add my spouse to my account?
You must file a deed, assignment, or other instrument conveying title in the interest to you and your spouse in the real property records of the county in which the interest is located. You must then provide Whiting with a certified copy of the instrument to add your spouse to your account. When in doubt concerning this matter, please consult your attorney.
What happens if an interest owner passes away?
If the owner died with a Will (testate) and Probate proceedings have been or will be conducted in the state where the property is located, please provide the following:
- Certified copy of Death Certificate
- Order Issuing Letters Testamentary
- Order Admitting Will to Probate
- Final decree, Judgment or Personal Representative Deed distributing the estate
If the owner died with a Will (testate) and probate proceedings are conducted in a state other than the state where the property is located, please provide the following:
- Certified copy of Death Certificate
- Documentation of ancillary probate proceeding opened in all affected
- Final Decree, Judgment or Personal Representative’s Deed distributing the estate
If the owner died without a Will (intestate), please provide the following:
- Certified copy of death certificate
- If an owner died intestate please contact an attorney in the state in which the property is located to determine requirements for settling the estate and transferring the owners interest
ALL DOCUMENTS AFFECTING CHANGE OF OWNERSHIP MUST BE FILED OF RECORD IN THE COUNTY WHERE THE PROPERTY IS LOCATED!!
What documents are required if I buy or sell an interest in a property?
You should provide Whiting’s Division Order Department with a recorded copy of the deed, assignment, or other instrument of conveyance properly recorded in the county in which the property is located.
What do I do to transfer my ownership to someone else?
You should provide Whiting’s Division Order Department with a recorded copy of the deed, assignment or other instrument of conveyance properly recorded in the county in which the property is located.
How do I notify Whiting of a change in trustee?
You should provide the Division department with a copy of that portion of the trust instrument that identifies the successor trustee, its duties and powers, and the circumstances leading to the trustee’s replacement. You should also provide us with the successor trustee’s address. You should also record an affidavit of successor trustee in the county where the well/s is/are located.
When are royalty payments suspended?
For your protection, payments may be suspended in the event of uncertainty as to ownership caused by a title dispute, assignment of interest, notice of death, transfer or sale of property, or unknown address. You may be able to prevent such an inconvenience by promptly notifying Whiting of any change regarding your interest, as discussed above.
Why does my royalty payment sometimes vary from month to month?
Many factors contribute to your payment. Changing market conditions may cause fluctuation in commodity prices on a monthly basis, while mechanical or operational problems or routine maintenance may temporarily affect production and cause downtime. Also, over time, production volumes from an individual well will experience a natural decline. So, while this may be offset with additional wells being drilled on your property, the decline in production volumes from individual wells is inevitable. If you have reason to believe an error in payment has occurred due to decimal or title issues, please contact the Division Order Department at DivisionOrder.Inquiries@whiting2.o2dev.net and we will attempt to address any issues in a timely manner.
Why are adjustments sometimes made to my payment?
Whiting strives to disburse revenues in accordance with each owner’s oil and gas lease and all statues and regulations of the state in which the interest is located. In the event of an error or discrepancy in your payment, we will make the appropriate correction and an adjustment to your payment may result. For instance, we may receive adjusted production figures or adjusted pricing from a purchaser. An adjustment to your royalty payment might then be required to ensure that accurate payment is made. Each state has a statute of limitations that governs how far back in the past a company is obligated to make such payment adjustments. Please remember that adjustments may sometimes be in the royalty owner’s favor.
Why is backup withholding deducted from my revenue check?
You must provide Whiting with a valid tax identification number or Social Security number for reporting and identification purposes. Otherwise, the Internal Revenue Service requires that we withhold 28 percent of all revenues until this information is provided.
When will I receive my Form 1099 for income tax purposes?
Form 1009’s will be mailed via the United States Postal Service on or before January 31st each year for the preceding calendar year. Please allow ten (10) business days for the form to arrive in your mailbox.
Whiting Petroleum Corporation
1700 Broadway, Suite 2300
Denver, Colorado 80290-2300