Video · 4 minutes · captions on
Royalty checks stopped
Transcript
Look at the months first
Your royalty checks stopped. There is a short list of reasons. Most of them leave a mark in a record you can read. First, look at the months. Here is a real Midland County lease, with a sample owner. Checks arrive for October, November and December. Then the operator changes, from Endeavor to Diamondback, and January is never paid. February is paid, but not until July. A payment can fall between two companies, each waiting for the other.
Seven common reasons
Seven reasons cover most stopped checks. One: a new company took over as operator. Two: the lease was sold, and a new division order arrived. Three: the lease shut in, so there is nothing to pay on. Four: an owner died, or the interest changed hands. Five: the payor has an old address. Six: the payor is holding your share in suspense. And seven: the money went to the Comptroller as unclaimed property.
May a payor hold your money?
May a payor hold your money? Only for certain reasons. A dispute about title that would change who gets paid. Reasonable doubt that you have clear title, or authorized the sale of your share. A title-opinion requirement about your title, identity or whereabouts, that you have not met after a reasonable request. Or a child support lien, or an order or writ of withholding.
When the money is due
Meanwhile, the clock is running. Oil is due sixty days after the end of the month it sold. Gas, ninety days. The first payment from a new well gets one hundred twenty days. A lease or written agreement can set the time. After the deadline, only a reason on that list stops interest.
Suspense, and interest
Suspense means the payor keeps your share and does not pay it. If one of those reasons applies, it may do that without interest. If none applies, interest runs from the end of the payment period, at two points above the New York Federal Reserve rate on loans to depository institutions, unless a written agreement sets another rate.
Put it in writing
If the money is not paid, do not wait. Send the payor written notice, by mail. That has to come before any suit for nonpayment. The payor then has thirty days after it receives your notice to pay, or to answer in writing with a reasonable cause. If it still does not pay, a suit can be filed in the county where the well is, and a winning judgment includes reasonable attorney's fees.
Ask one question
Write one letter to owner relations, with one question. Which subsection of Natural Resources Code section 91.402(b) is the reason my proceeds are in suspense, and what do you need from me to release them? Send it by certified mail, then send the paper it asks for, and keep proof of delivery.
Or it went to the state
Or the money may have gone to the Comptroller. Royalties unclaimed for more than three years are presumed abandoned, and go to the state. For amounts over two hundred fifty dollars, the holder must send written notice at least sixty days before it delivers the money, if it has an address for you. Search your name on ClaimItTexas. If a finder offers to file for a fee, the cap is ten percent, plus reasonable attorney's fees, and never a share of the minerals. See whether your lease is still producing with our free lease status check. The sources for this video are on screen.
The month strip is a real Midland County lease with a sample owner.