This particular company seems to be in chapter 11 bankruptcy proceedings. As a royalty owner, must I make any claims through all this paperwork I am receiving in order to continue receiving my royalty checks?
Read the paperwork that comes to you. In most cases, I have not had to turn in anything for any company that was domiciled in Oklahoma. Other states may have different rules. In OK, the royalty owners are a preferred class and are paid first. Depends upon state law.
Kenny, Have they missed any royalty payments? Most of what I have seen indicates they were going to continue to pay royalty owners during the bankruptcy.
Wade, my royalty check from Legacy is small and only comes about every three months. Takes that long for the lease to sell a load of oil. Last check was July 15th. Looks like a lot of work to file a claim. Is it something I should do, or just sit back and wait for Legacy to come out of bankruptcy? The wells are in Upton Co., TX. Petition date: June 18, 2019 Order date: September 9, 2019 General Bar date: October 14, 2019
Vedbutler. welcome to the forum and sorry for the delay in responding. Since Legacy said they were going to continue to pay, I would wait until you know you are missing checks, i.e. they continue to report production but you are not getting checks one every three months.
The deadline passed this week for Legacy to file motions to reject any leases they did not want to keep, and we do not see they filed anything.
Thank you very much for your reply.
Once Legacy gets out of bankruptcy or gets bought by someone else and the dust clears… Go back and look at your Division Order minimum amount. Many of them are preset at $100. You can change that to $25 for many companies and get more regular checks when amounts get smaller. Easier to see if a check is “missing” or just not enough for the minimum payment.
Good advice. Thank you.
Due to the COVID-19 shutdown, many wells have been choked back or actually shut in. Don’t be surprised if your royalties are WAY DOWN for a while.