In Texas, would an oil company be required to pay late and penalty fees if they misinterpreted our oil royalty deed (and several others) and failed to pay us anything for over 3 years?
I accepted their explanation that we only had executive rights when I asked why we weren’t receiving royalty after the wells were drilled. They said our deed was the last of several mineral assignments from the same person, and that 100% of its revenue was burdened by n.p.r.i.'s in 2 other assignments. I downloaded the deeds recently and discovered that the 2 deeds had ‘royalty acres’ of 20/640s of 1/8 lease royalty, but they had been assigned mineral interest as if it had been 20/640 straight mineral interest. Since it wasn’t straight mineral interest, it should have been figured differently and there should have been mineral interest remaining to credit to us.
Texas does have an interest penalty statute. I am not sure if it applies in your case, but you can always try to claim it and see if they will pay. Make the request by certified mail return receipt. Texas Natural Resources Code § 52.131 | FindLaw
I sent a certified letter this year and the company has agreed to pay interest but the data that they provide is inaccurate. There are 4 wells. They have the #3 well showing production before it is even spud. They came up with some figures but no detail. The company says the code that you quoted only applied to state lands and they will pay 2% + the NY federal discount rate (Section 91.403). To check their figures, would the days late/365 give a daily rate to multiply by the penalty rate? There are several years of interest owed. I would like some way to double check since their figures are so obviously incorrect in areas. Any advice will be appreciated. Thank you, Mollye Morris
Contact them again and ask why they have production for a well before it spud. The interest will vary by year since the discount rate changes. Not sure how they calculate is, annual average or what.