I have been cleaning up my husband’s oil and gas interests after several years of neglect. I’ve had pretty decent success so far, but this one has me stumped.
I found the purchaser that distributes revenue for one royalty interest in Burleson county, TX, acquired back in 2006, and emailed them to update some title information and to change the address. They also mentioned he had revenue in suspense for a working interest he acquired in 2013-ish in Lea county, NM, run by a completely different operator, and said they would be sending out division orders for both of them. Perfect, one less property to hunt down. When it arrived in the mail, all decimals looked correct, etc., but both properties are on the same division order and the effective date is the date the DO was recently mailed out to us.
I’m still learning, but am I correct in sensing some red flags with the effective date if we potentially have a few years of revenue in suspense? I’d like to put the interests on separate DOs using the NODOA form to simplify, but am unsure of what to do about the effective dates for them since I don’t know when this purchaser began distributing revenue for either one or if they are holding revenue in suspense from the previous purchaser(s). Thoughts?
Just to make sure of what you are saying…someone is trying to merge division orders into one DO for different interests coming from wells producing for two different operators in two unrelated states? That does seem to send red flags or questions if I understand that correctly
100% correct. I’ve never seen anyone do that before, but it seems like something that might present some major problems down the road. We will definitely be transferring them to separate DOs before sending anything back, I’m just not sure what to have for the effective date for either one to ensure we scoop up the revenue in suspense.
the Texas royalties, if there has been suspense for longer than a couple years, it escheats to state of Texas Comptroller’s office as a stagnant account.
You can search their database at claimittexas/gov
Yes, the RI was turned over to the state through 2019 and I’m currently waiting out the claims process on that one. The rest must be in suspense with his account. We received revenue checks for the WI until 2021, so I think anything we have for that one is also going to be in suspense because it’s not on the comptroller’s site. Thanks!
Purchasers work on different transfer processes today. Make sure to review your documentation for separate property/lease numbers. If this is the case, then your are looking at an aggregate Transfer Order but it may be titled Division Order. The important issue is the decimal interest associated with with the specific property number. Some purchasers will date the DO as to the date issued and make a note as to the first settlement date. The important part in recovering funds from the State will be the Deed/Assignment, DO, and a copy of the check from the purchaser releasing the suspended funds.