As the word “legislation” suggest, legislation is passed by the legislature and signed into law by the governor. The OCC issues “rules” and “orders” so be careful not to confuse them.
Vern,
I’m not 100% sure where your comment was directed. The “statutes” I was referring to were all based on legislation and have nothing to do with the Oklahoma Corporation Commission (OCC). They were from Senate Bills enacted in or just before 1985 and again in 1993.
I’m not aware of any authority the OCC has to ensure the mineral owners get paid. They do set the bonus rates on a forced pooling. But if the company does not pay the bonus to you, they will refer you to your attorney or the judicial system to rectify it. They also have no authority to referee your lease between the lessor and the lessee.
The OCC is a governmental regulatory agency responsible for exercising authority over oil and gas and is subject to its own laws only. Once a mineral owner signs a lease or makes a pooling election contract law comes into play, because a contract is a promise between two or more persons involving the exchange of some good or service. Therefore, it is the responsibility of the mineral owner to demand payment.
That is a bit out of my budget but I’m curious if the 1964 publishing date is correct or if there has been revisions or supplements.
Here is one you might be interested in. OilGasLaw_Snell.pdf The info in the two volumes are the same, but they are sorted differently. There are some very good case law references as well.
Martha,
The USC angle is something I had not thought about. I have to wonder about jurisdiction issues though. Interesting. I’ll have to look into that a bit more.
I hope it helps, Opal.
Ronald,
There is no “previous 6 month “rule” by OCC”. The OCC has no authority over the matter, see my statement below addressed to Vern.
There may be recent legislation. However, I am not aware of it. If true, my ignorance on it would surprise me as I have attended 3 NARO conferences in the 13 months. This includes the Oklahoma conference in April where there was a legislative update presentation by an attorney who is the Chair of the Oklahoma NARO Royalty Owner Advocacy Committee. I’m not excluding the possibility that I may have been distracted (or sleeping) through that part!
Martha,
I mostly agree with your statement. However, Vern is correct in that the correct term would be rules instead of laws.
Also statutory law also still plays a part on the lease.
For those following the discussion
OCC Rules - Link
http://www.occeweb.com/rules/rulestxt.htm
Most Oklahoma statutes are located in Title 52 - Link
http://webserver1.lsb.state.ok.us/OK_Statutes/CompleteTitles/os52.rtf
“North Dakota is one of two states that have a specific statute allowing the mineral owner to cancel the lease for nonpayment of royalties”. ( I can’t find the other state)
Scroll down to: Cancellation of Lease for Nonpayment of Royalties
http://www.ag.ndsu.edu/NDOilandGasLaw/mineralowners/royaltyclause
This is true, Vern. What I am referring to is actual legislation passed by the Oklahoma house and signed into law by the governor herself, and as I recall, but have not looked for again because of its low priority with me, it took effect in July of this year 2013, and it changed everything about the previous 6 month “rule” by OCC, but ended up changing not much of anything. Camel droppings happen, even in Oklahoma.
Rick, the book was published by in 1964, but it cites Federal Laws pertaining to oil/gas and state agencies. For example: Federal Civil Codes ‘lends’ law to the US State regulatory commissions. 30 USC § 1719 - Civil penalties US code (b) Failure to make royalty payment; failure to permit lawful entry, inspection, or audit; failure to notify Secretary of well production.
That is USC (United States Code) and OCC neither of which have anything to do with what I am talking about. I am still looking, but I cut and pasted it into one of these mineral rights folders a few months ago. It was not USC nor was it OCC rules.
Here’s a book that is considered the “Bible” of Oil and Gas Law, but it’s very expensive. Kuntz, A Treatise on the Law of Oil and Gas http://www.lexisnexis.com/store/catalog/booktemplate/productdetail…
I called the OCC and was told that there are no new or old laws allowing the OCC to enforce timely royalty payments. OCC stated SB 168 sets the penalty percentages at 12% on 6 months after 1st sale and 6% on title curative. However, OCC did state that O/G companies did have the right to finish bring horizontal wells in a section to completion and production status before SB 168 can be used by the mineral owner to demand payment and courts can enforce payment penalties.
Rick, The United States Codes (USC) is permanent US laws and does not include laws enacted by state governments. Federal courts can review USC laws and strike them down if they do not agree with the U.S. Constitution, so US States often enact similar laws as in SB 168.
Good website.
Also interesting that ND requires 18% interest after 150 days.
Ronald Von Wilson, I have not located recent Oklahoma case law addressing timely royalty payments, but I’m working on it. However, “Recent (Texas) case law underscores the need for the royalty owner to be vigilant in the protection of its rights vis a vis the lessee, including e.g. the timely payment of royalties. In Shell Oil Co. v. Ross, 356 S.W.3d 924 (Tex. 2011), the Supreme Court analyzed both the discovery rule and the doctrine of fraudulent concealment in holding that limitations barred a royalty owner’s claim based on underpayment of royalties.” Scroll down to: Royalty Owner v. Lessee http://www.lexology.com/library/detail.aspx?g=1526c439-75f5-4f64-89…
Rick, You got me to thinking about using Federal Laws instead of State Laws. Leases can be worded using a ‘federal floor’ for royalty payments, so maybe the ‘federal floor’ concept needs to be closely examined and used creatively. This is from North Dakota State University. Scroll down to The Royalty Clause: http://www.ag.ndsu.edu/NDOilandGasLaw/mineralowners/royaltyclause
Having said as much, I have to say that Lobbyists do have a bad reputation, but in reality they have very strict and effective rules and law they MUST go by, and every now and again some are prossecuted, quite effectively, for such violation Also, inreality, even in the Minerals procedures in little ole Logan County, OK, most lobbyists are very honest, hard working individuals that most people really know little about. We are in good hands.
Thanks for those Martha. Like Rick, my eyes were opened with the 150 day/18% law. What also struck me is that ND followed the Texas, and not Oklahoma/Kansas law in terms of deductions. I wonder how much oil companies had to lobby/bribe State Legislatures to include the “Shaft the mineral owner” clause? Or as I like to call it, the Chesapeake 50 State Rule.