landowner

"WHAT CAN I DO IF MY ROYALTIES ARE NOT BEING PAID? "- Good Info!

"Introduction
This paper is intended to give general guidance to royalty owners who believe that they
are owed royalties but are not receiving payment. It is not intended as legal advice, and royalty
owners are encouraged to consult with their own legal counsel regarding their particular
situations.
In order to enforce your rights as a royalty owner, it is necessary first that you understand
how exploration companies pay their royalties. "


This was recently posted on the Texas Land and Mineral Owner's Assoc. website tlma.org.

The paper was written by John McFarland, a leading authority on Texas O&G law.

Anyone in Texas who is a landowner or mineral owner in Texas could benefit from joining TLMA and they would benefit from your membership.

Please check it out.

Views: 110

▶ Reply to This

Replies to This Discussion


landownerPermalink Reply by Mac Davis on November 10, 2009 at 17:23

landownerPermalink Reply by intrepid on November 10, 2009 at 17:33
Thanks!

landownerPermalink Reply by cocodrie man on November 11, 2009 at 9:42
too bad we don't have such information on what can be done in Louisiana when royalties are not paid.

landownerPermalink Reply by intrepid on November 12, 2009 at 4:07
Texas is fortunate to have TLMA as a resource.

landownerPermalink Reply by little ole 1st grade teacher on November 12, 2009 at 4:18
Do you have an example of what a Division Order looks like?

Oil & Gas ProPermalink Reply by The_Baron on November 12, 2009 at 9:06
cocodrie man ,

Try reading the mineral code.

Oil & Gas ProPermalink Reply by The_Baron on November 12, 2009 at 9:11
137. Nonpayment of royalties; notice prerequisite to judicial demand

If a mineral lessor seeks relief for the failure of his lessee to make timely or proper payment of royalties, he must give his lessee written notice of such failure as a prerequisite to a judicial demand for damages or dissolution of the lease.

Acts 1974, No. 50, §137, eff. Jan. 1, 1975.



§138. Required response of lessee to notice

The lessee shall have thirty days after receipt of the required notice within which to pay the royalties due or to respond by stating in writing a reasonable cause for nonpayment. The payment or nonpayment of the royalties or stating or failing to state a reasonable cause for nonpayment within this period has the following effect on the remedies of dissolution and damages.

Acts 1974, No. 50, §138, eff. Jan. 1, 1975.

138.1. Division order; precedence of lease; penalties for failure to pay royalties due

A. For the purposes of this Article, a "division order" is an instrument setting forth the proportional ownership in oil or gas, or the value thereof, which division order is prepared after examination of title and which is executed by the owners of the production or other persons having authority to act on behalf of the owners thereof.

B. A division order may not alter or amend the terms of the oil and gas lease. A division order that varies the terms of the oil and gas lease is invalid to the extent of the variance, and the terms of the oil and gas lease take precedence.

C. The execution of a division order is not a condition precedent to receiving payment from a lessee. The lessee shall not withhold royalty payments because his lessor has not executed a division order.

D. If the lessee fails to pay royalties solely because his lessor has not executed a division order as defined in this Article, the court shall award as damages double the amount of royalties due, legal interest on that sum from the date due, and reasonable attorney's fees. However, if the lessor fails to supply the name, address, and tax identification number upon written request of the lessee, the lessee's failure to pay royalties shall be deemed reasonable.

Acts 1992, No. 1110, §1.

139. Effect of payment in response to notice

If the lessee pays the royalties due in response to the required notice, the remedy of dissolution shall be unavailable unless it be found that the original failure to pay was fraudulent. The court may award as damages double the amount of royalties due, interest on that sum from the date due, and a reasonable attorney's fee, provided the original failure to pay royalties was either fraudulent or willful and without reasonable grounds. In all other cases, such as mere oversight or neglect, damages shall be limited to interest on the royalties computed from the date due, and a reasonable attorney's fee if such interest is not paid within thirty days of written demand therefor.

Acts 1974, No. 50, §139, eff. Jan. 1, 1975.

§140. Effect of nonpayment in response to notice or failure to state cause therefor

If the lessee fails to pay royalties due or fails to inform the lessor of a reasonable cause for failure to pay in response to the required notice, the court may award as damages double the amount of royalties due, interest on that sum from the date due, and a reasonable attorney's fee regardless of the cause for the original failure to pay royalties. The court may also dissolve the lease in its discretion.
Acts 1974, No. 50, §140, eff. Jan. 1, 1975.

landownerPermalink Reply by intrepid on November 13, 2009 at 20:39
Thanks, Baron. Good info for La. folks.

landownerPermalink Reply by cocodrie man on November 14, 2009 at 3:35
thank you, Baron. It appears that I must resort to the court to resolve my situation. That means time and money.
Permalink Reply by RBH on November 14, 2009 at 8:18
The big guys seem not to care cause they know it costs money and is a real pain to hire attorneys and go this rought.
Permalink Reply by jffree1 on November 12, 2009 at 4:40
Great info and a timely post.
Permalink Reply by RBH on November 14, 2009 at 8:16
What seems to be a problem is that some of the big players are aggressively still leasing, drilling and making deals and only have so many hands on deck so to speak to do the division order/title work in house or on contract. Very frustrating to get NO response or reply from them when funds due.

RSS

© 2026   Created by Keith Mauck (Site Publisher).   Powered by

Badges  |  Report an Issue  |  Terms of Service