Replies to This Discussion

Permalink Reply by Krkyoldhag on October 4, 2011 at 6:28

You should call the company and be sure they have your names and interest and addresses right.

Permalink Reply by Montana Slim on October 4, 2011 at 10:06

We did confirm that they had our address and names and interest.  They told us "it was complicated" and it takes a long time to prepare.  Any ideas on how long it usually takes and whether there is a statutory limit?

Permalink Reply by Debbie Costello on October 4, 2011 at 19:27

The issuance of DO's & first royalty payment varies by company & even by unit within the same company.  You can file a claim for statutory interest if royalty payments are delayed more than 120 days beyond the end of the month when production commences per Texas Resource Code 91.402 but that won't necessarily compel payment any quicker.  They can pay royalties before DO's are issued but seems some would prefer to pay the interest, or hope there isn't an interest claim filed.  We just received DO's & first royalty payments in September from XTO on Scorpions which started production in January.  I still haven't received DO's on Butler-Rooney (also XTO unit) but have been getting monthly royalty payments since June and it went into production almost a year ago.  In both cases I've had several company reps tell me how complicated it is...

Permalink Reply by Ben Elmore on October 5, 2011 at 3:28

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.

Permalink Reply by Montana Slim on October 9, 2011 at 9:21

Thanks Ben.   Sounds like this is the case.  Our acreage leased is definite and, I am assuming, the acreage in the unit is definite, therefore they should be able to start paying.  Any risk of being removed from the unit if I press them?

Permalink Reply by CH on March 23, 2012 at 15:55

So thankful for your information!  Chpk reported production Nov 30th 2011 and we have not received anything! We have called them and emailed them.  Today they told my husband that we would get DO at the end of March or May?  What happened to April?? How long after the DO will it take to receive a check?  Not in a big hurry just want to know it is coming and how much a royalty check can run.  We have no ideal.

Permalink Reply by CH on March 23, 2012 at 15:58

And do you know how long wells usually produce? 5 years or more?

Permalink Reply by Ben Elmore on March 26, 2012 at 5:11

With CHK it is hard to say how long after you send back your DO you will get your first check.  You might pose this question in the "Leased by CHK" group.  If it is a good well, yes, it could produce for many years.

Permalink Reply by slick n. slicker on October 6, 2011 at 7:28

hey,

 o and g companies are naturally going to hold and make money using your royalty so long as the can get away with it in keeping with the free market economy we have so we're all going to have to learn to be proactive and learn to game the system as much as they do.

the following is La. law, such as it is, which leaves companies in the drivers seat forcing lessee to hire a lawyer to send a "demand letter" giving them 30 days to produce some excuse for further delaying payment.

i can find no definition for "timely fashion". the companies hold the cards under La. law.

then they must decide whether the bad press and further legal expense costs more than they can make holding your gas money. it's nothing personal, just simple bean counting, PR and regulations.

we have been waiting about 6 months for a royalty payment and just sent a "demand letter".

texas law sets a certain limit in days for them to pay up.

but i wonder if our biggest issue may not be getting scammed on how much our land actually produces and what the actually sell the gas for.

Sonris lite and DO's produce figures but i see no way to  confirm these numbers and suspect we are being taken for a big ride. someone in the industry knows but how we could ever find out  is a mystery.

good luck!

 

§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.  

 

 

Permalink Reply by Tom Hough on October 6, 2011 at 10:42

Any royalties they fail to pay you within 90 days you are entitled to interest on. The company is not required to tell you you are entitled to interest payments so you need to send them a letter telling them you expect interest paid. Even after I sent a letter to Devon demanding my interest they still tried to sneak it by without the interest payments. So don't expect them to be honest read your statements and stay on top of them. Devon has failed to pay me royalties for five months and they think they are getting over on me. I'm just letting them get in default on the lease so that I can re-lease for better terms.

Permalink Reply by Sherry Mobley on October 12, 2011 at 10:59

Okay, Ben I have a question again. The Gentry/Holt heirs. Two Heinschel Wells since 2007 and the Huskies DU1H . XTO put some monies in the Rec Acct. On the 2 older wells acquired from Hunt. XTOs landman said the same as above in these discussions. We are trying to clear title. But the landman himself told me they pulled him off of these several months ago. I know these are 2 pooled units. Some of us went to Center Tex and filed our Aff of Heirship last week. We were told we have to have attorney file motion for proof of heirship and amount of royalties due each. Okay I understand that. The Huskies well has been producing since Oct 2010..... they were trying to clear title??????? But the Rec attorney quit, too many heirs and XTO pulled off their landman. Do we send the letter to XTO about demand? No one will tell us where the new money is on the new well. How does that work ? The District Court does not show a new cause set up for this. But if they quit working on this what can we do to find the new money? Shouldnt they have kept on trying to clear. Dist court says we are on our own. We only own the min rights and cannot get a dime yet. Is there a claim we can file? Do we send XTo certified demand letters being they have not paid us. Are we due interest on those past accts.