Interest Owners

Frequently Asked Questions


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 of 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), the length of the lease (also known as the “primary term,” typically for a specific number of years), and the rights and obligations of the lessor and lessee.

What are royalties?

Royalties are the mineral owner’s proportionate share of production as reserved in an oil and gas lease. The royalty amount is usually expressed as a fraction of the total amount of hydrocarbons produced from the leased premises (or the proceeds attributable to such production).

When are royalties paid?

Bonanza Creek’s payments are made in accordance with applicable State Statute. After the payment for initial production is made, Bonanza Creek pays for oil and gas production two months after production occurs. Bonanza Creek’s minimum payment threshold is $50*; therefore, payment will be made when the accumulated funds amount to $50*. Owners can expect payment in the last week of the month.

*Effective as of June 1, 2015.

What is a Division Order?

Soon after an operated well begins producing oil or gas, Bonanza Creek issues a document, a Division Order, to each interest owner that identifies the well, describes the spacing unit, the interest owner’s remittance address we have on file and, the interest owner’s decimal interest in the well. The interest owner is asked to sign and return the Division Order. Bonanza Creek uses this information to remit proceeds to the interest owner.

What is a Transfer Order?

A Transfer Order is a document that Bonanza Creek uses to evidence the transfer of ownership from one interest owner to another.

What type of annual statements will I receive?

Interest owners receiving more than $10 in royalties or more than $600 in rentals annually will receive IRS Form 1099. This summarizes your total payments and tax withholdings for the previous year.

How do I transfer interest in a property?

Forward all documents evidencing the transfer to Bonanza Creek’s Division Order office in Denver.

For additional information about forms, please view the Ownership Changes page.

What happens if I change my address or marital status?

For additional information about forms, please view the Ownership Changes page to see the required documentation evidencing change in address or marital status.

What happens when the interest owner of a property dies?

Upon receipt of notification of a death of an interest owner, Bonanza Creek’s Division Order department will send you a package describing what documentation is needed to evidence the transfer of the interest out of the decedent’s estate. Further, the deceased interest owner’s revenues will be held in suspense until proper documentation is received showing the distribution of the estate.

For additional information about forms, please view the Ownership Changes page.

When are royalty payments suspended?

For your protection, payments are occasionally suspended due to questions regarding your account. Examples of when such suspension could occur are:

  • When your address is not current
  • When record title is inadequately documented creating uncertain and/or disputed ownership
  • During a transfer of property
  • When an interest owner dies
  • When we do not have a TIN on file

What do I do if my check is lost, stolen or becomes outdated?

Email the Division Order Department to stop payment if your check is lost or stolen. Please have the following information ready when you call: your name, Owner Number and check date. We will stop payment on your check and issue a replacement within 10 business days. If your check is outdated, void the check, and send it back to Division Order Supervisor with a written request for a new check.

Where can I research unclaimed funds?

Each state makes an effort to locate rightful interest owners of production revenues through a single organization, holding the funds until the owner is found. To locate and collect unclaimed funds, please visit the National Association of Unclaimed Property Administrators’ (NAUPA) website at http://www.unclaimed.org/.