Net acres/unit acres x lease royalty rate. Example: 10/640 x 0.125 = 0.001953125

A Division Order is a directive signed on behalf of the interest owner verifying to the purchaser, operator, or remitter of a well the decimal interest of production owned by the owner. It also provides the owner's remittance address and taxpayer identification number.

Please be sure to sign and return the Division Order as soon as you are satisfied that it contains:

• The accurate decimal interest for your ownership
• The correct spelling of your name
• Your current mailing address
• Where you want your revenue sent, if different than your mailing address
• Your taxpayer identification number

Your Tax ID is either the Social Security Number (SSN), Employer Identification Number (EIN), or Taxpayer Identification Number (TIN) for the individual/entity receiving royalty payments and must be on file for identification and IRS reporting requirements. If your Tax ID is not on file, we are required by the IRS to withhold 24% of all payments and revenues until a Tax ID is provided.

Your revenue or JIB statements and your paper check. Your owner number will begin with a "C".

Please fill out a Contact Information Update form and returned via email to OR@Cutbow.us (preferred) or mailed to:

Cutbow Operating, LLC
3209 Bluebird Ln
Midland, TX 79705

Consult with your legal advisor, but in general, provide a copy of the conveyance document that establishes joint tenancy/ownership and has been recorded in the county and state where the minerals reside and send via email to OR@Cutbow.us (preferred) or mailed to:

Cutbow Operating, LLC
3209 Bluebird Ln
Midland, TX 79705

Please refer to the Required Document List. Forward all necessary documentation, your contact information, and the current ownership information (owner name and owner number) to our staff via email to OR@Cutbow.us (preferred) or mailed to:

Cutbow Operating, LLC
3209 Bluebird Ln
Midland, TX 79705

Please fill out IRS W-9 Form and forward it via email to OR@Cutbow.us (preferred) or mailed to:

Cutbow Operating, LLC
3209 Bluebird Ln
Midland, TX 79705

Revenue and JIB statements will be mailed and/or emailed to owners by Cutbow.

Direct deposit is now available to all interest owners. To opt-in to direct deposit, please fill out a Direct Deposit Request form, found on our website, and email or mail it to the correct address.

Your check detail was either included with your paper check or emailed directly to the email address you provided. It is also available online via EnergyLink. If you have not yet signed up for EnergyLink, please contact our Owner Relations team and we will provide your login instructions.

The timing of initial payments can vary depending on many factors. We always attempt to commence payments for the proceeds of production as soon as we are able and according to statutory requirements for each state. It can take up to six months from first sales on a well before you receive a check. That timeframe may be longer if we are advised of a title dispute or adverse claim affecting your interest, which must be resolved prior to disbursement of revenue.

Direct deposits should post to your bank account within 3 business days. Paper checks are sent via USPS standard mail.

Routine maintenance, mechanical or operational issues may temporarily affect production. Changing market conditions can also cause price fluctuations.

Taxes customarily withheld are state severance taxes or state withholding taxes as may be required on all properties. The specific taxes withheld may depend on the specific language in your lease agreement. If a taxpayer identification number is not provided, we are required to withhold federal taxes as mandated by the IRS.

Based on the specific language in your lease, the deductions can be related to transportation, compression or gathering charges, and other third-party charges related to transporting your share of gas to the point of sale.

We are required by the Internal Revenue Service to withhold 24 percent of all revenue payments to U.S. residents if the taxpayer ID number (or Social Security number) is missing or invalid. The number provided must match the name on the payment as indicated per IRS records. This information is required to be provided to us in writing by submitting IRS Form W-9. All backup withholding is reported on your 1099 at year-end, and it is considered a payment to the IRS on your behalf. Cutbow does not issue refunds for backup withholding. Please consult with your tax advisor about reporting the withholding on your income tax returns at the end of the year.

Revenues are remitted to you once your revenue balance exceeds $100, or the amount you indicated on your division order. Any balance amount under your minimum distribution amount will be paid annually. Occasionally, payments are held due to claims against, or changes to, ownership such as a notice of death, change of address, transfer of property, assignment of interest or legal dispute. Payments due are accumulated and released when the matter affecting ownership has been resolved.

The minimum amounts for which 1099s are issued are:

• Box 1 (Rents) - $600
• Box 2 (Royalties) - $10
• Box 7 (Non-Employee Compensation/Gross Working Interest) - $600

The IRS requires 1099’s to be mailed no later than January 31st.

Email your name and owner number to: OR@Cutbow.us

The values are as follows:

• Box 1: (Rents) Monies paid for lease bonus, rights-of-way, shut-in royalty payments and water usage.
• Box 2: (Royalties) Gross payments made on production
• Box 7: There are two types of monies that can be reflected here:
  • Gross Working Interest: Your owner type shares in the operating revenues and costs associated with the well.
  • Non-Employee Compensation: Payments made to contractors

The IRS requires gross amounts be reported in Box 2 and Box 7. Your periodic disbursements are net of deductions and taxes. If you deduct the taxes and deductions from the amount reported in Box 2 or Box 7, the calculated figure should equal your deposits.