We have been getting a revenue check for this one section that we just found out that we don't have a lease for. We have two mineral rights in two different range & townships, but they are both section 17s. That must have been where the leasing company got confused. What would you suggest we do now?
You already know the right thing to do or you would not have asked. Give the money back with a letter explaining what happened…sleep good tonight.
Yes, you should do the right thing but I don’t think that is the issue here. If there is production in both section 17s and you own mineral rights in both section 17s, then you are entitled to payment for both section 17s. For the section 17 for which you have no lease, I would contact the operator, find out on what basis they are calculating your royalty, and go from there. If the operator knew you had no lease, you may have been force-pooled. If they have used an incorrect basis, you will need to return any overpayment or they will need to catch up with interest any underpayments.
Thomas Mullins said:
You already know the right thing to do or you would not have asked. Give the money back with a letter explaining what happened…sleep good tonight.
Dorothy, I appreciate your answer. As for the answer from Mr Mullins, I have never asked a question that I already knew the answer to… what would be the point in that??? I am still learning about the leasing of mineral rights and have learned a lot from the nice and informative people on this forum. I just always thought that the oil company had to have a lease with the mineral rights owner before they did anything. Some how, they have the division order figure right for this section. We just don’t have a lease with them. Thanks for your answer.
Yes, you should do the right thing but I don't think that is the issue here. If there is production in both section 17s and you own mineral rights in both section 17s, then you are entitled to payment for both section 17s. For the section 17 for which you have no lease, I would contact the operator, find out on what basis they are calculating your royalty, and go from there. If the operator knew you had no lease, you may have been force-pooled. If they have used an incorrect basis, you will need to return any overpayment or they will need to catch up with interest any underpayments.
Thomas Mullins said:You already know the right thing to do or you would not have asked. Give the money back with a letter explaining what happened.....sleep good tonight.
You are welcome. The oil company does not need to have a lease with each and every mineral owner in order to drill. As I understand it, someone correct me if I am wrong, each owner has a right to “develop their minerals” so, in theory, all they need is the permission of one owner. In practice, though, an operator will generally want a lease with a majority percentage of the owners. Anyone not leased can be force-pooled by taking it to the state oil and gas commission.
It sounds like you have a division order. How long have you owned the rights? Do you own all of the minerals? When did the well(s) start producing? Do you know for sure that you don’t have a lease? Could it be producing under a prior owner’s lease? We would need a little more information in order to be helpful. Is the operator not able to answer your questions?
Bonnie Simons said:
Dorothy, I appreciate your answer. As for the answer from Mr Mullins, I have never asked a question that I already knew the answer to… what would be the point in that??? I am still learning about the leasing of mineral rights and have learned a lot from the nice and informative people on this forum.
I just always thought that the oil company had to have a lease with the mineral rights owner before they did anything. Some how, they have the division order figure right for this section. We just don’t have a lease with them.
Thanks for your answer.
Sorry…I didn’t carefully read your original question. I apologize…
Thanks to both of you Thomas and Dorothy. Sounds like I should call the oil company. They aren’t always easy to get a hold of to talk to. I will let you know what I find out.
Thanks again.
Thomas Mullins said:
Sorry…I didn’t carefully read your original question. I apologize…
owned land for 3 years part of a dvision of original 150 acres as i searched leases found out im a big part of a unit with producing well. i think that the other owner of balance of property may have been pocketing the checks
put the call in to the well company heard nothing back yet,i would expect any royalties to be returned to me.
in lease may be a stipulation that you must contact company before you could expect royalty payment
thats only if land has been transfered to a new owner.my lease says it and it look to me pretty generic