Oil and Gas Lessors Should Promptly Review Royalty Payments | The Law Offices of Gregory D. Jordan

Oil and Gas Lessors Should Promptly Review Royalty Payments

Texas oil and gas lessors have rights and remedies when their interests are being compromised. In particular, lessors have a right to receive the royalty they contracted to be paid. Owners should carefully monitor their royalty payments. Managing oil and gas royalties is essential whether you own an interest in one well or in hundreds.

Sometimes, errors in royalty payments happen due to oversights, valid mistakes, or misinterpretations of royalty clauses that can be easily and quickly remedied. But if a company deliberately tries to deceive a royalty owner, more aggressive negotiations and litigation may need to be pursued to obtain the monies that rightfully belong to the lessor. If you have a question, it usually pays to first ask the oil company. If you don’t get a good answer, public records are readily available. The company that operates your oil and gas wells has to report production levels on wells or leases every month. First purchasers also have to submit reports to compare volumes. If you still sense a problem after doing some digging, it might be wise to call a lawyer.

Having a skilled Texas oil and gas attorney may be your greatest asset if you believe you have been underpaid. The attorney can carefully review the lease agreement, royalty payments, and relevant laws. Do not let a land man or an oil and gas company sway your decision to contact an attorney if your gut tells you something is wrong.

In the recent Texas Supreme Court decision of Shell Oil v. Ralph Ross, the royalty owner lost out on underpaid royalties because he did not exercise due diligence to determine whether he was being shortchanged on royalty payments under a pooling and unitization agreement. Please don’t let this happen to you. To learn more, contact Austin oil and gas attorney Gregory D. Jordan at (512) 419-0684.

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