I thought I read someplace that once a oil well is drilled and producing, in Texas, the company has up to 90 days to hold the funds before they are required to pay. Is this a state law? Thanks for anyone's help.
120 days to start then 60 on oil and 90 on gas
Thank you for your help.
no problem and that is within 120 days from the end of the first month anything is sold to start.
These comments are correct, unless your lease provides for a shorter time period.
Thank you both, for the clarification. So if I am to understand correctly, that if my 2 wells were drilled and started producing oil in September, 2012. I should recieve a royalty check by the end of this month, December?
End of January.
Wade. Thank you for your help. This really gets confusing sometimes about the laws and all. thanks again.
Wade Caldwell said:
End of January.
To add to this question. If the company that is writing my checks, are waiting sometimes up to 210 days for me to recieve the proceeds (the checks have all those months of production listed on one check ) what, if anything, can be done about this? Thanks for your help.
Craig, it depends, if they are holding your checks until a certain monetary amount is reached. You may have to check your lease to see. Because of how gas is marketed you may be paid at 90 day intervals and then only if the check is over a certain amount, that is my understanding anyway. I think there is a statutory amount of $25 or$50 at which point the state thinks you should be paid, which could be modified by your lease agreement to $100 or more.
Craig D said:
To add to this question. If the company that is writing my checks, are waiting sometimes up to 210 days for me to recieve the proceeds (the checks have all those months of production listed on one check ) what, if anything, can be done about this? Thanks for your help.
I understand, but they are holding for both oil and gas and the amount of money is in the thousands and in some cases, tens of thousands, which is a lot of money to be holding past the 120 day mark for new wells.
r w kennedy said:
Craig, it depends, if they are holding your checks until a certain monetary amount is reached. You may have to check your lease to see. Because of how gas is marketed you may be paid at 90 day intervals and then only if the check is over a certain amount, that is my understanding anyway. I think there is a statutory amount of $25 or$50 at which point the state thinks you should be paid, which could be modified by your lease agreement to $100 or more.
Craig D said:To add to this question. If the company that is writing my checks, are waiting sometimes up to 210 days for me to recieve the proceeds (the checks have all those months of production listed on one check ) what, if anything, can be done about this? Thanks for your help.
Craig, I agree, once payment has begun, the stream of checks over the minum value should continue until royalty from production falls to below the minimum. One thing to keep in mind is that royalty is based on sales, if they delay selling, it would delay your royalty. I always hope my operator is doing all he can to get the best price. It sounds like they are doing something unusual, the bad thing is there probably isn't any help short of a court case which you could win and they go right back to doing what they did before. I would say there is nothing to be done as long as they catch up or nearly so in less than six month intervals. In my opinion oil companies don't conduct their business with the competence you would expect of other businesses because nobody requires it of them.
I do appreciate all your help in answering my questions. It seems the oil companies have our government's attitude, We'll pay you when we think it's right, otherwise just sit back and don't worry. This is all new to me and trying to figure all of this out, is probabaly in vain. Again thank you for your help.
Send a demand letter certified mail, or better yet, have an attorney do so. Also, depending on how your lease is worded, you can always threaten lease termination. That usually gets their attention.
Craig D said:
To add to this question. If the company that is writing my checks, are waiting sometimes up to 210 days for me to recieve the proceeds (the checks have all those months of production listed on one check ) what, if anything, can be done about this? Thanks for your help.
Ask the company for their accounting books. Then take them to the U.S. attorney's office and ask to appear before a grand jury, because if they were meant to be as confusing as mine, with money paid, then taken back, then exactly the same amount paid the next day, then taken back by the end of that day, and so on and on and on, then seek a Criminal warrant for violation of the RICO act for violation of the criminal provisions of the Deceptive Trade Practices Act.
HAHAHA. Lease 217601 has been producing 302 mcf of gas (I only went back as far as 1/2005) and by the unit,lease and well math we should have been getting .0425% since then and we have not seen anything except a really fudge up accounting report where we are getting a large figure, then six months later they have done some magical accounting and reduced our payout by tens of thousands of dollars. Their answer we have more money than you and will fight you all the way to the SCOTUS.