Texas late royalty payment interest (§91.402 and §91.403)

The deadlines

Chapter 91 of the Texas Natural Resources Code says when an operator, called the payor, must pay each royalty owner, called the payee. Section 91.402 sets three deadlines, all counted from the end of the calendar month in which the product was sold:

These are the defaults. A lease or a written agreement can set a different time, so read yours. The month on your stub is the sale month, which is why the clock starts before the money moves. Our stub guide shows where to find it.

Counting the days

Count from the last day of the sale month, not the first. Add 60 days for oil or 90 for gas. If the payment reaches you after that date, it was late, and interest runs from the day after the deadline until the day it is paid.

A quick test on any stub: find the sale month, look up its deadline in this table, and compare it with the check date. If the check is dated after the deadline for that product, it was late.

The interest rate

Section 91.403 sets the rate at two percentage points above the rate the Federal Reserve Bank of New York charges depository institutions, the primary credit rate, unless a written agreement between you and the operator sets a different rate. The statute does not say to compound the interest, and our calculator uses simple interest:

interest = amount paid × (Fed rate + 2%) × days late ÷ 365

The rate moves when the Federal Reserve moves it. We use the rate in effect on the due date:

A worked example

On the sample lease, February 2025 oil and gas were paid on July 25, 2025. The rate in effect on both due dates was 6.50 percent.

That is small for one month. It adds up when the same operator pays late often, and it is real money owed to you. The calculator takes the sale month, the amount and the pay date, and does this for oil and gas.

When interest is not owed

The operator may hold money past the deadline without interest in a few cases that the statute names. In section 91.402 they are:

• a title dispute that would affect who is paid;
• reasonable doubt that you own what you claim, or have sold your share;
• a title opinion requirement that is unmet, after the operator has reasonably asked you for the information to cure it;
• a child support lien or withholding order.

Interest also stops when the operator delivers the proceeds and interest to the Texas Comptroller as unclaimed property. If you were paid late and no interest came with it, the useful question is which of these applies.

How to ask for it

Start with a letter to the operator’s owner relations department. It should give the sale month, the amount, the date you were paid, and the interest you calculate.

The statute says pay it. Ask for it in writing.

Section 91.404 requires written notice by mail before a payee may go to court. After the operator receives it, the operator has 30 days to pay what is due or to answer in writing with a reasonable cause for not paying. Keep a copy of the letter and proof of mailing. This is the order of events.

The audit on this site looks for late months on every statement it reads. It does not yet check the 120-day rule for a well’s first payment, so check that one yourself if your well is new.