is it legal for an oil and gas revenue distributor to charge a owner for not having a ACH service setup?
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It depends upon your state. They may not do so in OK. If you need a template letter, let me know.
Adding to this topic – do you know what New Mexico’s laws dictate? We have a “check processing fee” of $15.00 on our Petroleum Exploration Company Ltd. check because we refuse to do direct deposit. We are a large OK partnership, but the production is in Lea, NM.
I do not know the law in NM. Maybe someone on the forum can comment. Go to the NM statutes regarding oil and gas and see what it says.
this is 2024. Why not an ACH?
Always read terms of the oil company’s ACH form carefully. Some operators include the right to reach into your bank account and remove funds it claims were overpaid. Others state that they will never do this. Also make sure it does not state that it alters or amends your lease terms to be in conformity with the ACH form.
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Interesting. normally just sign up for ACH but there is no “agreement”; I’ll make sure to review in the future
Curious as to how you can sign up without filling in a form with your bank information. Are you going through a 3rd party?
No, over the years signed up several vendors ACH but there is usually no agreement. just enter routing/account number. e.g. recently set up ACH with water company and no agreement. perhaps different with O&G?
Yes different because you would be receiving royalties which is reportable income. Gas company is removing funds for bills.
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not sure why reportable income makes a difference - recently filed for SSA and have my monthly amount direct deposited ( i think its the same as ACH) - I just furnished bank info - no ACH agreement.thx for your help
Working with oil companies to set up direct deposit is completely different than signing up for social security. Here is link to Exxon’s form as an example. Note the paragraphs governing the contractual agreement. Exxon will not remove money from your account. But you have to indemnify Exxon in care your bank screws up and the form modifies your lease. https://corporate.exxonmobil.com/-/media/global/files/interest-owner-relations/exxonmobil_direct_deposit_form0621.pdf
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I am in Texas and can’t find anything in oil and gas law or Texas Natural resource codes that would allow for the operator or gathering outfit the right to take money out of my check for that reason
This is not a statutory charge. You can send an email or a certified letter pointing out that this is not a valid charge under the terms of your oil and gas lease or Texas statutes and demand a refund of previous charges. Be sure to review the division order to make sure that the fee was not inserted there by the operator. If it was, you can revoke the division order and send a new division order limited to the Texas statutory form. However, if you are a working interest, rather than a mineral owners, then this might be a valid fee under the terms of the Joint Operating Agreement.
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Because the oil companies and marketers are using the ACH forms as an amendment to the original agreements, allowing for clawbacks etc.