I own minerals in Shelby County Texas. In May 2020, I was contacted by a landman who was hired by and represented a Texas based O&G operator. Additionally, my ~30++ cousins + relatives who inherited from original ancestor were also contacted at the same time. Shortly after first contact, a lease offer was mailed to me + cousins. We all signed our leases and returned within a few days of each other. Lease bonuses were paid shortly thereafter.
In December 2021 an unexpected check appeared in the mailboxes of most of my cousins. They were never offered nor asked to sign a Division Order. I did not receive a check (nor a DO) so I contacted operator to find out the status of my royalties. I was told I was unleased. After re-supplying all the documentation I had supplied to landman in May, they put me into pay status. I was never contacted by operator and told of any issue with my title. I was not offered a DO as a condition to receive my check.
I found out then there was a producing well, first sale April 2019. Yes, a full year prior to being contacted by landman. We were never told there was a producing gas well in May 2020 nor after.
Cousins checks included payments going back to the April 2019 sale. My check came 2 months later but only included royalties starting Jul 2020 thru most current month (my lease was signed June 2020).
Inquiring as to unpaid past months, I was told they don’t pay until the lease is signed. All other cousins were April 2019 forward and signed lease as same time as me. I was never offered a lease prior to May 2020.
Under what rule, law or case study can they withhold my royalties? Would I be due any back penalties or interest? What are my next steps or options. The amount due me is a “drop in the barrel of oil” so I am sure the operator knows they have deeper pockets to draw this out.
I asked about unknown heirs, escrow of royalties or if receiver had been appointed & informed there was no escrow, no receiver and sales proceeds were used for the cost of the well.
I would see if the cousins leases are all filed in the courthouse the same day or within a few days of yours. If so, and they are getting back to first sales, then get copies of the book and page and fuss again.
Thanks @M_Barnes Before posting, I confirmed positively that all the cousins are filed at the same time as me, all our names are listed and filed in Oct 2020 in a First Amend of Pooling for the unit. So my name is on a list, filed and recorded in court records. But me (and two other cousins (sister) who were also on same list) never received a pmt in Nov as the rest of the family cousins.
I also was told by DO Analyst at initial call, that I was not leased. And in a follow up conversation after my short royalty pmt, she informed me that I wasn’t really* leased but had (her words) a “Provisional Lease”. At that time I asked to see the Title Opinion and was emailed something that in no way looks like what I asked for.
I have never been asked by the operator or landman to cure in defect or question of title.
When I told the DO Analyst we all signed and returned leases all within a few days of each other she kind of ‘shrugged’ with a “Oh Well, I probably paid them too much. Would you like me to put them all in suspense?” Frankly I was a bit taken aback with what I thought was kind of a threat that if I pushed my missing payments, she might do that.
I was initially told they didn’t make payments til a lease was signed. Then it was Oct 2020 w 1st Amend and she said the same thing…that she probably paid me too much too (ie pmts should start Oct 2020, not the July 2020 as I was paid on). The reasons kept changing and didn’t make sense.
If you search in this forum, I have another related-unrelated topic in this same mineral interest that throws another wrench in the works about differences in acreage. I thought it best to divide those topics into two conversations. Between this payment topic the acres re-surveyed, this could very well be a O&G Law lecture…ha!
I am not an expert in TX law, but the oil and gas code will give the rules for payment. In OK, the rule is from first sales. Maybe a TX person can quote the statute.
so I am sure the operator knows they have deeper pockets to draw this out.