What can be asked for in a demand letter to an operator? Can anyone recommend a good attorney for the Young County area?
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If you have a valid claim to payments that you aren’t receiving, then you can and should send a demand letter to the operator and purchaser requesting payment and providing notice of your claim of nonpayment under Section 91.404 of the Texas Natural Resources Code. If a valid claim goes unanswered, the operator or purchaser could become liable for any attorney’s fees you incur to pursue your claim further. You can also ask the operator for detailed information about your payments (property descriptions, dates and volumes of production, prices, your decimal interest, deductions, etc) although most operators automatically include this information with payments. You can also request interest on late payments under certain circumstances. The terms of a particular oil & gas lease could impose additional obligations on an operator beyond those created by the Texas Natural Resources Code.
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Be sure that you send your letter by certified return mail receipt requested.
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You don’t need an attorney in the county where the minerals are located. Most attorneys work statewide, even in Texas.
Hi. New to this board. I have a very small royalty interest (small in amount I am paid) that I inherited from my Dad when he passed away in 1996. Over the years I have generally received at least one check a year and the avg yearly income is at least $100. (Like I said, it is small) Ownership changed, I just found out, in July 2019. I just received a “flush” check for $52. The last check I had received before this was in July, 2019.
So, 18 months went by without a check which is highly unusual. Plus I didn’t receive notice that ownership had changed. I didn’t receive a report with the check, just a check. I have contacted the company twice by email and they say they are getting the lease set up at EnergyLink so I can go there for production reports and other information, but it isn’t set up yet. They were fairly prompt in replying to my emails. But, I would think that since owning the lease since July of 2019 that it should have been set up some time ago.
It could be that production has slowed due to the age of the wells and also the low prices for oil over the time in question. I am just in the dark as to what is going on without monthly reports to view. I used to manage a production department of a small public oil and gas drilling company about 44 years ago. I know that periodic reports were required to be filed with the Texas Railroad Commission. Anyone know of any way to access production reports from the RRC?
It seems unlawful to me to not notify me of the change in ownership, plus not being able to access the activity of the lease for such a long period of time.
Welcome to the forum! This has been a difficult year in the oil patch with folks working from home, Operators in bankruptcy, etc. Many wells were shut in or choked back.
Check your original DO and see if it had the minimum at $100. If so, then with the new operator, make sure you set it at $25. With normal decline in volumes of wells and the lower prices in 2020, you may not have reached the $100 limit (hence the $52 check).
I have also run into trouble with operators getting set up in Energy Link. Ask your operator again for a production report by email while you are waiting for ELINK and ask when ELINK will be set up. Also ask for a new DO so that you can change the minimum payment.
Thanks for the reply. The new owner of the working interest seems alot different from past operators. I’ve never had difficulty accessing or knowing about the production activity of the leases before until now. I’ll give them more time to get setup, but my lord you’d think a year and a half would be ample time. It’s not as much about the money as the transparency of being able to know the production activity since they took ownership of the leases. Four years is all the time a person has to file a lawsuit. After that the statute of limitations runs out. So, the clock is ticking.
This is of sentimental value to me since the leases are on the property where my Dad grew up as a child. I still go to Farmer each year for an annual get together with other families who had relatives that grew up in that area. The leases are about 6 or so miles outside of what used to be Farmer, Texas. It’s just keeping something alive that belonged to my Dad.
Thanks again for the reply.
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You can also find information on the Texas Railroad commission site regarding production.
This is looking more suspect the more I dig. If I am reading the production reports correctly, and I may not be, it looks to me like the lease I am likely receiving a royalty from is producing an avg of 225 barrels a month and has been since the new operator took it over. There are 3 leases in that acreage but I only receive revenue from one of them. The other leases look to be averaging about 300 barrels a month together.
In 2019 I received $63 from Conoco Phillips for half a year’s worth of production/sales. A that point the new operator took ownership over from Conoco. In 2018 I received $148 from Conoco. So I’m guestimating I should have received at least $40 to $50 for 5 months worth of production for the latter half of 2019 from the new operator. Then there’s 2020 production, also. So, I’m guestimating I should have received at a minimum $150 for 18 months under the new operator, instead of the $52 that I just received.
I hope I’m all wrong about this. I need access to actual production from the operator to audit their reporting. In the day of computers you’d think it would be an easy matter of uploading the file or files they have on computer to the website.
I contacted the operator again and asked when I could expect to be able to access EnergyLink and that I don’t even have a lease number to be able to identify the lease from which I receive a royalty and it’s been 3 days since and so far nothing. I never received a notice from the operator that lease ownership had changed hands. The Division Order I have is from Conoco way back in 1999. Sorry to keep rambling but this just isn’t looking good at this point. I have a bad feeling I’ll have to file with a lawyer to get any answers.
You can access the volumes and sales on the Texas Comptroller CONG website. This is public information and the sales are reported monthly for severance tax purposes. Access data under Lease Drop-Crude Oil and Lease Drop-Natural Gas. Enter the RRC lease number (if oil lease with 5 digits, add a leading zero) and time range and the county (same RRC lease number may be assigned in multiple districts and you only want your lease).
Thanks, TennisDaze, but I don’t know how to access the information you are speaking of. I have found the production for the leases, but that’s all. And nothing new from the operator, crickets. So, it isn’t looking good at this point. I am a retired accountant. My first job was with Moran Bros. Drilling Co. back in 1976. I had numerous job responsibilities as well as being in charge of all their production, both oil and gas, reporting to the RRC, as well as doing joint interest billings. But that was a long time ago. My gut tells me these folks have withheld over $100 in revenue that is due me. I am going to send one more email to them soon requesting specific production and sales information from the time they bought the lease. If I’m not satisfied at that point I don’t know what to do except notify the Attorney General of Texas.
As I said, I have received nothing from this new operator except a so called “flush” payment in late January. Nothing accompanied that check, no statement of production/sales, total revenue collected, tax paid or anything. Thanks for the reply but I don’t know how to access the information you have referenced.
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