Missing royalty monies


#1

I just discovered that my recently deceased aunt owned a 1/8 interest in a property that has been in production since 1966. She has never received a dime in royalties. Production has passed through several different operators with the last one having claimed bankruptcy but has continued to operate under another name. This is a big mess & I haven’t been able to get much information. Calls go unanswered. I am thinking there is a pile of money out there, but I don’t know how to proceed. Any suggestions? Nothing shows up on search for missing money held by NM


#2

What is the source of your information regarding her minerals?


#3

Did a title search. Confirmed that she did, in fact, owned a 1/8 interest in the developed section.


#4

If you didn’t find anything at NM Taxation & Revenue Dept I would then search the National Association of Unclaimed Property Administrators. Its site is unclaimed.org


#5

Also consider the laws of the state that held the funds. States vary as to length of time before unclaimed funds are transferred to the state’s general revenue. If you are successful in finding the funds be aware that certain “super creditors” may prevent release to you. Not suggesting you fall into that category. But many people do.


#6

You also may have to hunt in the state where the operator is domiciled. Look in Delaware for sure.


#7

might be in receivership?


#8

May be worth hiring a landman or using a lawyer to reach out to the operator(s)… I believe in NM the operators are obligated for something like 10-15 years back royalties when an interest owner is identified so any money owed for that time period is in the operators suspense funds. What Section, Township & Range is the interest in?


#9

That is exactly what I am doing right now. Have hired a landman. Last operator has filed for bankruptcy recently, but is operating now under a different name (how does that work?). Parcel is in Section 23, T-19S, R-35E. No success checking NM records for money being held. Did find the original 5 yr. lease with my aunt back in 1959. There were options for annual renewal. Well apparently completed in 1966 and is still active


#10

Why would I need to look in Delaware records?


#11

Delaware is a tax haven for corporations - especially Oily ones…

In some cases operators will hold royalty proceeds “in suspense” for a number of reasons. they’ve never received a division order, there a cloud in title, etc… Once you determine you are due back royalties consider you could be due interest on these funds… In Oklahoma statutory interest on these funds is 12% annually!!!


#12

Looks like there are 3 active oil wells with Breitburn and 1 active gas well with Mewbourne in the section. Also in the section are a large number of abandoned/plugged wells. I assume your interest is with Breitburn and the Northeast Pearl Unit wells as the gas well spud date was not until 08.

You may already have this information but here is a link to the NM OCD for one of the Breitburn wells that is currently active. It shows production going back to the early 90’s (as far as their logs go back) and lists contacts at the company. It also shows the past few operators for further background research: OCD Permitting - Well Details

Good luck!


#13

Wow! Great info. Thanks so much. Will pass this on to the landman who is dealing with this.


#14

My aunt’s minerals are in the NE/4 of S-23. I only see one well (active) in the NENE sector (30-025-21114) operated by Breitburn-NE Pearl Queen Unit #009. Not aware of any other activity in the NW/4.


#15

I now see a second active Breitburn well in the NWNE Sector of the NE/4. This has been a steep learning curve for me!


#16

You should know that it is unlikely you will recover for anything other than the last few years. The statute of limitations will have run for all but the last few years. While it’s great to have a landman track it down, you’re going to need a lawyer before all is said and done.

One possible thing might defeat the SOL: if fraud was committed in depriving your aunt of her interests, there will probably be a “discovery rule” applied to the statute of limitations. Good luck.


#17

That is about what I expected, unfortunately. We have an attorney on standby. The current company is in Chapter 11 and is denying that my aunt owned any minerals in the area (which we have factual evidence to the contrary). Thank you for your comments.


#18

You need to make sure you are represented in the bankruptcy. I once represented my father in a bankruptcy proceeding where the debtor was trying to wipe out my father’s royalty interests. If you don’t show up and object, the bankruptcy court can convert your aunt’s interest into an asset of the debtor’s estate. Although you might have a claim against the debtor for unpaid royalties up until that point, you would lose all royalties going forward. You need to get into bankruptcy court NOW!


#19

Running this through the lawyers now for their response. Thanks!