EOG suddenly decided to let me know today that I wouldn’t be getting my $130 royalty deposit for December, because, according to them, they miscalculated my family’s interest since 2012 on some units and, in doing so, they’ve determined that they’ve accidentally overpaid me over $8,000 in royalties that I have to pay back.
So, if I were to assume that I’d get about $130 a month in royalties (like I do now) then it’s safe to say that I won’t see any more royalty revenue for the next 4-5 years in my bank account until I pay this negative balance off.
So since I don’t have the money to pay taxes on something that I’m not getting a dime in revenue from, I guess I will have no choice but to forfeit my inheritance & my children’s children’s inheritance to the state & explain to my family how I somehow lost it even though EOG admits it was due to their miscalculation in interest. I sure didn’t expect this when I entered into a business relationship with them when they started coming around in 2008 and 2009.
Do not get rattled here. First, make sure that you get a very detailed explanation of the determination of the royalty decimal and how the overpayment has been calculated. Second, you do not need to send EOG a check, but instead let EOG recoup any overpayment from your future royalties. If new wells are drilled, prices rise, etc., then any overpayment may be recouped faster than expected. Third, you have already paid income taxes on the $8,000, except for 2016 royalties which will be included on your 2016 return. You should not owe any income taxes on the royalties applied against the overpayment as this is not income to you. Are you talking about the property taxes? You will have to pay the property taxes each year.
Yes, I’m speaking of the property taxes. Although it may seem like nothing, I do not have the money to have an extra annual tax bill in my budget on revenues that I don’t get a dime from especially for the next four to five years.
You are not alone. I have not received a check since Aug. 2012.
When this happens I always think that what I did get is more than I ever thought I would get. It doesn't make it any easier though. The difficult thing is getting enough paper work from them to determine if they are telling you the truth.
You have received the $8,000 as income and so income tax would be due and already paid. This is another reason not to pay the funds back to EOG as you would have to either amend prior returns to take out the income or deduct it against the current year. You will not owe taxes for future year(s) until you get any more income.
Actually, I think mine has a lot to do with the fact that I wrote the following email to an EOG executive earlier this year:
Subject: Montague Co Taxes
-------- Original message --------
Date: 04/29/2016 6:11 AM (GMT-06:00)
To: [email protected]
Subject: Montague Co Taxes
Good morning
I am currently a small royalty owner with EOG Resources who receives royalty payments.
Recently, I have stumbled upon tax records in Montague County that have several of my dead relatives as living interest owners that are sharing my interests (and many others) - Is this legal? My grandmother, Lucille Luna Shaw (last four of Montague tax GEOID: 7418), for instance, died July 12, 1997, yet EOG began paying her royalty payments - along with the rest of us heirs (and unbeknownest to us) - beginning in 2012 for Lue A, 1h & 2h & Lue B 3h (property tax ids: N63701, N64319, N59940; Lue A1h - Texas Railroad Commission # 270737-API# 42-337-34535; Lue A2h - TxRRC #270738-API#42-337-34538; Lue B3h - TxRRC #31976-API#42-337-34542) & Salona B, 3h & 4h (Property tax id N63874, N64062; Salona B3h - TxRRC # 270747-API #42-337-34549; Salona B4h - TxRRC #270748-API#42-337-34548) units. All three of her sisters (Ola Mae Luna Womack Yerby - d. Circa 1975; Martha Odell Luna Wells-d. Circa 1986 [last four digits of Montague property tax GEOID: 7431]; and Mary Elizabeth (“Mollie”) Luna Harper [last four digits of Montague property tax GEOID: 7419] who died in 2002) - as well as many of their first cousins - all of whom are of the same 3rd generation in our family and all who all died before any of these wells that are producing now ever existed (and no, as far as my grandmother and her three sisters go, there’s no trusts or life estates that exist nor anything like it) started receiving in 2012 a share of royalties in similar accounts, per tax records.
When I brought this to the attention of Lisa Cook at EOG she sent me an e-mail in May 2015 diismissing tax records information as inaccurate and dated and should not be considered a reliable source of information (after giving us my grandmothers’ share of her Lue & Salona units and closing her “suspense” account.)
Because of all this, my family and I now have the additional hassle of paying the taxes on this account or being threatened with liens.
My grandmother’s sisters, though, as well as many other deceased relatives are still receiving .0002320 interest in Lue A2h, [so]
It looks like EOG holds all of my dead relatives’ interest payments in “suspense” accounts (keeping the money this way instead of turning it into unclaimed property - because the Comptroller never had any of my grandmother’s payments, by the way) and by entering “%unknown%” in the street number or in the street’s name of the address field as their ‘addresses’ [therefore making it an undeliverable tax bill for the mailman] EOG continues to pay the taxes under the guise of holding it until the heirs retrieve it (and since the heirs never know to retrieve it unless they go searching for dead relatives in tax records - which is possible however unlikely) - EOG can continue to pad the revenue.
Also, the names of these decedants are not listed in ANY of the pooling declarations filed in the Montague Co. Clerk’s office, either.
Additionally, on one of the wells, Lue A 1h (34535), tax records show that for EOG’s values - as a royalty owner - in this well went from $727,210 in 2013 to $807,640 in 2014 but the rest of us “fellow” small royalty owners and our values in the same exact well- all 316 of us - show that our values decreased in 2014. (Please see complete list at:
http://iswdataclient.azurewebsites.net/websearchlegal.aspx?dbkey=mo…"
In 2013, I discovered that EOG neglected to have me sign a 1.0 acre lease before they started drilling what is now Spillman B & since no one would answer me, I began to find things out on my own.
So as you can see, they were happy to admit they had miscalculated my family’s interests by suddenly realizing their error where they’ve overpaid me $8,000 in royalties that I owe them now, but all these other “errors” that I’ve discovered that does not benefit them financially to address, I guess everyone else - not just me - is supposed to ignore.
In Texas the appraisal districts can correct your decimal interest (and appraised value) going back 5 prior years on minerals / royalties. If your property is in Texas, I would find out which mineral appraisal firm handles the county where your minerals are and contact them about making a correction. You might get a refund on taxes you overpaid.
$130 a month, are you kidding, for Well Products worth a fortune.
Don't do anything, O&G companies have never overpaid a landowner. The truth is they have never paid a landowner a fair royalty in the US.
Chesapeake pulled this scam in 2015 in Ohio, they said they over paid everyone when in fact we were getting less than 2% as a Royalty which dropped to zero for most. I got 50 cents an acre one month.
Bruce Buck, the dairy farmer where the Buck Wells are located called Chesapeake's revenue department and they told him the company that sold the well products reported that they overpaid everyone.
Bruce asked them: "Isn't that Chesapeake Energy Marketing, your company?" The associate said yes.
Here is my Revenue Department calculation of my royalties, I have a no deduction lease, yet you will find 3 columns of deductions, and no one in Ohio has made a dime off of Natural Gas Liquids (product code 4). You'll notice under the Percent (Deductions) column that the deductions are always greater than 100% each month.
You are another victim of US Domestic O&G theft. Don't worry about what you were told, the truth is you have been stolen from all of these years.
Telling you the Tax Records are wrong is a tip off that EOG is hiding something.
Call the Auditors Office (I don't know what Texas calls the tax folks department. In Ohio it's the Auditors Office) and ask them how accurate their records are. I think you'll find they are in order.
You have stumbled onto a major issue but may need some lawyer help to figure out what the game being played is.
In Ohio we can write a letter to the Ohio Attorney General when we find an issue that the state might be interested in. The letter can be attached to an electronic Complaint form that State Attorney General Websites have to allow Citizens to file a complaint which can be investigated by the AG's office. Sometimes the AGs have taken money from the people you complain about, so they will tell you to seek help from an attorney. That's Funny, the AG is an Attorney!
Unfortunately, I obviously am not the only one. EOG knows that when they come around with bonus checks & contracts they’ve written, most of us end up trusting them (or we wouldn’t sign). The reality of it is, their deceit costs you and your family from the moment they first knock on your door. In my case, I agreed to their contract in 2008 where they were already getting the majority of my interests and now, less than 5 years after oil production started, they’ve fixed it where I’m giving them 100% of my interests’ for the next 4-5 years so since I trusted them & I didn’t have the money to spend on an attorney to check out their contract at a moment’s notice when they dropped by back in 2008, I am paying for it now. It looks like they figured out how to manipulate the rest of my money out of my contract and into their bank account. This is how I learned that EOG uses the trust you have in them against you.
Yeah, I found it interesting, too, that information in, of all places like tax records, aren’t considered accurate by the very people at EOG who - I would think - are responsible for making sure the information is accurate (the May 2015 email was from someone in the land administration department at EOG.)
Maybe Ohio has something like we have here in Texas that could help you.
Section 91.504 of the Texas Natural Resources Code gives an owner of a royalty interest in oil or gas produced in Texas the right to request from a payor information about itemized deductions, the heating value of gas, etc. The oil co must respond to a request sent certified mail within 60 days.
A few weeks ago, EOG sent out a mass mailing to their interest owners to remind us that we all have this perogative in Texas (which was the first year they’ve ever done it) but as I read it, I wondered, why should I believe that there’s any integrity in this information from EOG if, for every year since 2012, they either can’t (or won’t) for some reason make the information in tax records accurate? I mean, what’s the point of bothering to get this information from them at all? It’s kind of disheartening when you have an email from EOG’s land administration department reiterating that fact, you know?
Eversince I began doing my own due diligence, I’ve also often wondered just how many interest accounts, in how many counties (and states, for that matter) has EOG been hiding & keeping dead relatives’ payments & making money off them & for how many years?
