We received our first royalty check 12 months after the first oil was sold with no interest money included. we understand that they owe us interest money but we don't know how much or on how much money. This is our first dealings in the oil royalty business since the 70's and everything has seemed to have changed. Any information would be appreciated, thank you.
Cathy,
I looked back through some of your posts for some additional information. The property is in Oklahoma. They will owe you interest on the full amount from the first day of sale to the day they paid you. The first sales date is not on the completion report. I would use the June 16 first production date. Here is the completion report.
http://imaging.occeweb.com/OG/Well%20Records/1DD1CE2D.pdf
The amount of interest will be 12% if you had marketable title. 6% if you did not. Again from looking through your posts there seems to be some conflict on the status of your title. It really will be their determination and if they determine there were title issues, they will pay 6%. If so, I doubt you find it worth a lawsuit to fight for the extra 6% on that well. (Unless you owned the entire 640 acres under that well)
Oklahoma ยง52-570.10 covers it. Here are the key parts, but you can pull the entire Title 52 here: http://www.oklegislature.gov/osstatuestitle.html
B. 1. Proceeds from the sale of oil or gas production from an oil or gas well shall be paid to persons legally entitled thereto:
a. commencing not later than six (6) months after the date of first sale, and
b. thereafter not later than the last day of the second succeeding month after the end of the month within which such production is sold.
D. 1. Except as otherwise provided in paragraph 2 of this subsection, where proceeds from the sale of oil or gas production or some portion of such proceeds are not paid prior to the end of the applicable time periods provided in this section, that portion not timely paid shall earn interest at the rate of twelve percent (12%) per annum to be compounded annually, calculated from the end of the month in which such production is sold until the day paid.
2. a. Where such proceeds are not paid because the title thereto is not marketable, such proceeds shall earn interest at the rate of six percent (6%) per annum to be compounded annually, calculated from the end of the month in which such production was sold until such time as the title to such interest becomes marketable. Marketability of title shall be determined in accordance with the then current title examination standards of the Oklahoma Bar Association.
Rick Howell----Thank you, this was just what we were looking for. Now we have something to back up a telephone call to Slawson with. Yes, there were title problems. It got frustrating to send them affidavids and find out they already had the same information. Hope it does't take another six months for them to pay the little bit of interest. Thank you again for taking the time to reply.