Hello there. I received a letter with a Division Order but I don’t understand this first line. ""Please note that the above referenced property reached 100% After Payout effective September 1, 2020. Also, since I haven’t received any royalty payments and this well has been producing since 2018 wouldn’t they have to pay interest on unpaid royalties? IF so, does anyone know how that is calculated?
Can someone explain this?
Thank you so much!
This language means that you did not sign a lease and are an unleased mineral owner. 100% of the revenues associated with your share of minerals in the well were applied to the drilling, operating and other costs until all those costs were recouped (Payout). After payout, you receive all the revenues associated with the minerals, less operating and other expenses. You are essentially treated as a non-operating working interest. The question is why your were not contacted in 2020 about the payout and there was a 2-year delay. There will be accumulated net revenues over the two years which are due to you.
The rights were in dispute and it seems that this would be the notice that it has been settled. Will there be interest paid as well as the mineral interest payment? Is that how it works with arrears (so to speak…not sure what other term to use…) In suspense?
By dispute, do you mean that someone else claimed the same mineral ownership that you claim? Or that there was a dispute as to the percentages of minerals owned among certain people or family members? In that case, you should have had legal counsel and you would have to be involved in any legal settlement aas to title ownership. Or did you sign a lease with Company X which was not the operator and your lessee did not participate in the well? If that is the case, then your lease may have expired before payout. You should consult with an oil and gas attorney as to your legal position and to make sure that you only sign a good document. If you do not have an attorney, there are some listed on this website.
When you said their was a dispute on your rights, was it because their was reasonable doubt as to you having clear title or a dispute concerning title that would affect payments? The operator generally does not need to be pay interest in Texas if they had reasonable doubt to you having clear title (Tex.Nat.Res.Code 91.402).
As a disclaimer, I’m not an attorney.
This topic was automatically closed after 90 days. New replies are no longer allowed.