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Permalink Reply by Skip Peel - Mineral Consultant on April 18, 2012 at 11:36

Here is a reply from a prior discussion regarding Texas.  I think Ben Elmore is as good a source on this topic as you will find on GHS.

Reply by Ben Elmore on October 5, 2011 at 9:28am

Under the Tex. Nat. Resources Code referenced above, they are required to make first payment of royalties within 120 days of first sale of production.  If they are still working on title to the acreage included in the drilling unit, they might claim they can hold revenues in suspense until they figure it out.  They typically will not send out DOs until they figure out title and can safely state what they believe your interest in the unit is.  So it could take awhile if title is complicated.  Having said that, as an example, if you own 50 acres in a 640 acre unit, and they have identified you as the owner and have you leased, then they know what your decimal interest is in the unit, even if they have no idea who owns the other 590 acres in the unit.  As such, they should be able to send you a DO and start paying you.  It sounds like you need to send them a certified letter citing the Resources Code 91.402, 91.403 and 91.404 and demanding to know when first sales occurred, an explanation as to why you have not been paid, and demand for payment plus interest.  Then see how they respond and determine your next move.

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Permalink Reply by Stonewall on April 18, 2012 at 11:47

I found my answer!  Texas Resources Code 91.403 says:

"If payment has not been made for any reason in the time limits specified in Section 91.402 of this code, the payor must pay interest to a payee beginning at the expiration of those time limits at two percentage points above the percentage rate charged on loans to depository institutions by the New York Federal Reserve Bank, unless a different rate of interest is specified in a written agreement between payor and payee."

Skip, you have been very helpful.

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