In Texas, does a royalty owner have any recourse if they were paid approximately 1/3 of the royalties that are due? After over a year, and quite a bit of money out of pocket, the oil company agrees that we were underpaid. Is there a precedent for recouping our expenses or receiving interest on money that was delayed for over a year? We never signed the division order, which I have discovered is worth “nothing” for the royalty owner.
In Texas, you usually need to sign the division order if it is correct in order to get paid. You need to contact the operator and demand interest and correct payment using a certified return receipt letter.
Thank you for your response. My husband and I each individually have ownership in a well. We utilize direct deposit and we each had a new well on our respective properties around the same time. When we went online to print and review the revenue statement, we found that the increase in the deposited amount was due to a new well. We live out of state, therefore, we were not aware of any drilling activity on the adjoining property. We did not receive division orders until months later. I am preparing the demand letter, but was not sure if they are legally liable for our expenses or interest. If they are required to pay interest, do you know what percent is realistic?
The interest is defined by statute. In Texas it is very, very low and is from the Texas Natural Resources Code Section 91.402 if I remember correctly. Someone more familiar with Texas probably has the exact link. Tied to federal rates I think so super low right now.
You only get paid on the perforations that are in your section. Contact the operator if they have the acreage “wrong” and ask for clarification.
Here is an old link to a blog. There may be newer information.
Here is the link to statute on interest - copy and paste into your browser. I do not think that costs are covered by the statute. No reason not to ask for reimbursement. If these were legal costs, then you can ask your attorney for advice. In the future, you can look at the permits and completions on the RRC website and open the plats and other information to see if your land is included. Once a well is spud, a window opens at the top of the permit page with the spud date. GIS viewer is also useful.
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