I’ve just reviewed my relative’s recent royalty statement from Oxy that reflected a much lower (~1000% lower) total royalty payment versus last month’s statement. What I found is that several wells that have been major sources for royalty payments for over a year suddenly are shown with negative revenue values. I’m curious, how does such a thing occur?
Thank you in advance for any help and wisdom that may be available on the matter.
It is possible. Occasionally, companies will do an audit that will show errors in payment to the mineral owners. There can be a variety of reasons for the audit. New owners were found, errors in math, back calculations of oil to gas ratios, pricing errors, etc.
NARO did a very good webinar on that topic a few months ago. It was from OK NARO, but the concepts are the same and it was quite informative. Non-members of NARO can listen for a fee. NARO members can listen for free. You can find it on their website. www.naro-us.org.
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