We have recently discovered that we have not been paid our owner royalties for over 5 years. They just quit paying. We live elsewhere and just assumed there was no more production because checks were getting smaller. Are we owned interest?
In California you would need to concern yourself with a claim of adverse possession (basically that the oil company can make a claim to title) since they have been possessing the property for at least five years. I suggest you contact a lawyer in Colorado to protect your interests.
On the interest, if you make a claim you are likely owed interest at the legal rate, whatever that is in Colorado.
I wish you well in your endeavor.
Jean M. Pledger
Thanks for reply.
We also own the surface and it's farmed for us by a cousin.
They are admitting they owe us...and offering to pay now that we complained. A relative who lives nearby told us there was still production.
But seems like they should have to pay interest for the use of our money. I just wanted to know if that was even possible. Seemed likely, since if there was no penalty for non-payment, every producer would just fail to pay till someone forced the issue. Why not? Free loans!
We didn't move or change payment address. I have no clue as to why the stopped paying us.
There are old wells from 1970's and are strippers at this point. The lease was sold to a small operator in 2003. They paid for 5 years but checks just stopped in 2008. They were only sending once a year. And not huge $$.
Landowners are at a huge disadvantage. We have no visibility into who holds the production rights, what the production is or is not. Or if they are fudging numbers!
How does the lease read. I would contact an attorney and see if it is considered shut in without payment? Their lease may be void?
I definitely am not an attorney.
I would definately seek interest at whatever the legal rate is in Colorado (it's 10% here in CA). With regard to the accounting, you have the right to an accounting and to ask for one. Your lease should let you know what the oil company is required to provide, but at a minimum an accounting of the production and the price they received should be required.