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Division Order Issues in the 1990S: State Policing of An Unresponsive Industry

Phillip Wm. Lear, Oil and Gas Royalties on Non-Federal Lands (1993)

Regardless of who is to blame, industry division order practices are shoddy at best. Division order analysts are plagued with the problems. Outside counsel augment their retirement funds.

One would think that with the myriad articles addressing division orders and division order practices, the message that industry needed to clean-up its act should have registered.2 Apparently it has not. In all fairness, the courts have contributed to the problem. Jurists have focused on results, rather than legal theories to decide disputes. The product is a hodgepodge of judicial rambling without guidance to the industry.3 One astute practitioner observed that little guidance may be taken from the plethora of commentary and decisional law, as “division order cases comprise the “Am. Jur.” of oil and gas law.”4 Division orders and division order disputes continue to constitute a major segment of oil and gas litigation in courts and before administrative tribunals.5 Moreover, recent articles, taking a decidedly pro-royalty owner tack, have been less than helpful in streamlining division order practices. Some advocate the elimination of the division order altogether.6

This article makes the case for division orders, based upon sound legal theories, and for quality-controlled, modernized division order practices. Division orders represent an indispensable tool in the commercial