Oil and gas royalty payments

Understanding Oil & Gas Royalty Payments: What You Should Know

oil and gas royalty payments

Every month mineral owners across the country obtain gas and oil payments – as with many legal documents, these tend to be a little confusing.

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D id you know that many people have unclaimed oil and gas royalties of which they are not aware? And you may be one of them. Each state government is responsible to maintain and administer an account containing unclaimed funds whose owners cannot be found, or to which there is questionable ownership. State statutes allow suspended royalty funds to be handed over to the state government after a prolonged period. In effect, the law allows oil companies to off load the responsibility of administration over these oil and gas royalties after a period of years, depending on the state.

This royalty calculator is useful for estimation and gut-check scenarios on your royalty income. Keep in mind there are a variety of factors that influence your royalty payment, such as your lease terms and provisions. Like any finite resource, commodity prices for oil and gas change with market demands. Newly drilled or horizontal wells, will produce massive amounts of oil and gas in their first few months and taper off over time. Some wells produce for decades, others for a few years.

But, what does all that fine print mean? A mineral lease can come in a variety of formats and include a multitude of provisions and clauses. There is no standard form for an Oil, Gas and Mineral Lease. The form shown here is commonly referred to as the Producers 88—Paid Up lease. This lease form, produced by the Pound Printing Company, is one of the most commonly used oil and gas lease forms. However, it has been revised many times over which it is why it is imperative you carefully read the lease you received. Even in the case where the lease you have in hand was prepared by an attorney or other entity, you owe it to yourself to understand the provisions contained in it.

Landowners located in top-producing U. Oil and gas companies are more than eager to join forces with landowners and reap the benefits of these important resources. However, unscrupulous companies can quickly turn big expectations into time-consuming, financial nightmares. Intentional acts to skim money off the top of lease agreements and mistakes caused by oil and gas company negligence can lead to hundreds of thousands of dollars in financial losses and property damage for landowners. Improper drilling techniques can destroy property value in seconds, property that has been nurtured and cultivated for generations. Blowouts can spoil acres of land, rendering it unusable for decades.

Unclaimed Oil And Gas Royalty

Whenever oil or gas production begins, the landowner is entitled to part of the total production. A royalty is agreed upon as a percentage of the lease, minus what was reasonably used in the Lessee's production costs. The royalty is paid by the Lessee to the owner of the mineral rights, the Lessor in the Lease.

How to Collect Unpaid Oil & Gas Royalties or Sue for Land Damage



Understanding an Oil and Gas Lease






  1. Brie G. says:

    How to Collect Unpaid Oil & Gas Royalties or Sue For Land Damage

  2. Madeleine Y. says:

    Net Revenue Interest

  3. Pergstundevra says:

    Every month mineral owners across the country obtain gas and oil payments — as with many legal documents, these tend to be a little confusing.

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