My mother has not been receiving RI payments for Gas Production (from both Oil & Gas Wells) during the past 2 years (or possibly longer) and I noticed on the Texas RRC Website it shows Gas Production Volume and Disposition Volume with Disposition Code 3 (means Processing Plant = Royalty Payment). Therefore, I called the O&G Company and spoke with the Production Dept. who stated that even though it shows a Disposition Code 3 they are burning off about 1/2 the Gas (as of April 2013) due to a break in the line that runs from their Plant to 1st Gas Purchaser then to 2nd Gas Purchaser (about 15 miles long) and it's too expensive to repair (the remaining Gas is being used in the Field). However, there is not a break in the line between the Well's and their Plant. I noticed that during Aug. & Sept. 2013 the Disposition Code was a 4 (means Vented or Flared = No RI Payment).
The O&G Lease is from 1940 and states that they are suppose to pay at the Well Head (Gauge Meter).
Therefore, should I report them to the Texas RRC regarding Gas Production/Disposition with Code 3 and non-payment to Mineral/Royalty Interest Owner's?
Otherwise, can I amend the O&G Lease since they refuse to pay for past and present Gas Production/Disposition with Code 3?
We really need to see a copy of the 1940's lease. If it provides for gas produced and saved or used, then they need to pay up. If it provides for a royalty on gas produced and sold, then they are not liable under the lease. However you may have a tort action against the operator.
The RRC commission is a regulatory and enforcement agency. They do not get into lease squabbles.
Buddy Cotten
Buddy,
Thanks for the info.
The O&G Lease does state royalty on gas produced and sold. Also, states non-producing gas (including casinghead) off O&G Well's royalty payment of $100 per Well per Year but she never received an annual royalty payment.
Therefore, should she call the O&G Company to inform them about the Lease statement regarding royalty payment for non-producing gas (including casinghead)?
Also, can you please explain Tort Action against the O&G Operator?
FYI: She has an undivided mineral/royalty interest in Willacy County (Willamar Field) under Survey Name "San Juan De Carricitos Grant" Share 13 Abstract 8 in the following Unit's: Willamar East, Willamar West, Willamar West Miocene & Willamar Community E.
Buddy Cotten said:
We really need to see a copy of the 1940's lease. If it provides for gas produced and saved or used, then they need to pay up. If it provides for a royalty on gas produced and sold, then they are not liable under the lease. However you may have a tort action against the operator.
The RRC commission is a regulatory and enforcement agency. They do not get into lease squabbles.
Buddy Cotten
Mineral Manager
Dear Robin,
I spent a year in Willacy County. This is the only county in Texas where the entire county is one survey. As another aside, Willacy was formed in about 1911or so our of parts of, I think, Cameron and Hidalgo County.
The Operator may have an implied duty to market the product. The Operator may be off of the hook by the $100 per year language. Certainly inform the operator of the back payments that need to be made. Civil suites can one of two: of contract and of tort. A guy getting run over by a bus -- his family would have a tort action for damages.
It is a very long shot, but if the payment of royalties were a condition of lease, then there may be an action to terminate the lease.
That's about all that I can do. Anything deeper would require a lawyer.
Buddy Cotten
Buddy Cotten said:
We really need to see a copy of the 1940's lease. If it provides for gas produced and saved or used, then they need to pay up. If it provides for a royalty on gas produced and sold, then they are not liable under the lease. However you may have a tort action against the operator.
The RRC commission is a regulatory and enforcement agency. They do not get into lease squabbles.
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