We didn’t receive our royalty check for November. After several phone calls that no one answered, lots of voicemail messages and a couple emails and a 24 hour wait, we finally received this email from the operator.
My question, has anyone else dealt with this? These royalty checks are our only income. I’m hoping to speak with an attorney tomorrow.
Based on this limited information, Robert Carman assigned some minerals to Om V Minerals LLC, perhaps around Nov 1, 2017. The associated royalties continued to be paid to Carman instead of to the new owner, resulting in an overpayment to Carman. The oil company is now paying the new owner all the back royalties. Generally, the oil company would be entitled to recoup the overpayment from Carman and most do this by deducting out of current royalties. Most royalty owners would not send a check back to the oil company. Your rights will depend on state law and possibly the issue of the signed division orders. You can ask the company for an accounting which shows the detail of the overpayment on a monthly basis to date.
I’m okay with them needing to recoup the funds, I’m just unclear on how it’s legal to take all revenue until it’s paid in full. It’s puts the hardship on us, where the error was theirs. We didn’t get the money in lump sums, they shouldn’t be able to either.
What Tim said is 100% correct. If you claim that the transfer to to OM V did not actually happen, then you have a legitimate complaint.
However, if the transfer did actually occur, you received payments you were not entitled to and the Company has every right to get that money back, even if it was their mistake that caused you to be paid.
I totally get that they need that $15k back, but they overpaid us over 2 years of monthly payments. How are they allowed to just take ALL of our revenue checks to fix their error? That’s literally our only source of income.
What would you have done without that 15k? Do that now.
Our checks are $8000 a month. The extra $650 or so they’d mistakenly been adding in wasn’t even noticed. The $8000 being kept entirely from us IS noticeable. We have house payments, car payments, insurance, etc as well as we just started a new business.
That’s unfortunate. Sounds like too many eggs in one basket. Good luck.
Not really all in one basket. We have two businesses but unfortunately we’d just put money into both because we always get paid. 
Have you contacted them to explain your financial situation and talk about a slower process for them to recoup the funds? Perhaps a lawyer could negotiate with them since it was their error.
Yep. Asked about doing payments instead and was told that while someone “could” make an exception, they likely won’t as this is “how they handle these situations”. An attorney would be helpful but without any money, I can’t afford the retainer. I’ve called 15-20 lawfirms and every legal aid society between here and Texas, but no one will help us.
You could always cash in and just sell the minerals. Effectively getting money now for future production payments. If your getting $8k a month in royalty those minerals are probably worth a large lump sum.
I suggest you be persistent and contact them again and ask for the name of the “someone” who could make an exception and contact that person to make your request.
We’ve called repeatedly but no one answers and they’ve yet to return a phone call.
Can anyone recommend a good oil and gas attorney? I just need someone that can review our Division Order, looking for info on how royalty overpayments are to be handled. What’s the rule of law in this situation? After threatening to go to the press, their attorney finally started returning calls and wants us to sign documents to get half of our checks. Just want to ensure we’re doing what’s right.
See out Mineral Services page for attorneys practicing in oil and gas. You’ll want one practicing in the state where your minerals are located.
This email raises several serious questions for me.
First, as a division order analyst with more than 40 years of experience, it has been decades since I worked with any database system that will print transfer orders (division order issued when ownership goes from one owner to a new owner) unless the account losing part of its interest is reduced to what they were supposed to receive all along. That prevents continuing to pay the removed portion to the wrong owner. Is the company involved here still using antiquated Microsoft Excel to manage ownership records, instead of a modern database system? I doubt it.
Second, even if the 25% portion remained in the name of Robert Carman, why was the 25% at the very least not suspended using the code for “transfer pending”, leaving only the remaining 75% in pay status to receive payments? This, too, would have prevented overpaying you anything.
Third, the company record shows that the transfer of the 25% was effective 11/1/2017. Was that the effective date in the deed (or other conveyance), or is that the date that is the “first of the month following 30 days after receipt of proper documentation”? If it’s the 30-days-after date, it’s a correct date, but if it’s the effective date stated in the deed the company went too far back in their recoupment–you don’t owe that much back to the oil company. The analyst is not properly trained, and thinks they must recoup from you when they are not supposed to automatically recoup from the effective date in the deed forward. The recoupment should be from the production months beginning from the 30-days-after date, forward.
Fourth, the question about the correct effective date aside, the email says the remaining balance to be recouped is $15,583.51. That means the overpayment amount maybe started out higher than that. The original amount should be only 25% of what was originally paid to you for months of production from 11/1/2017 forward (at the most). Do your records show you were paid more than $62,334.04 (remaining $15,583.51 divided by 25%) for all of those months of production combined?
If this were my situation, I would question whether the analyst even worked the ownership transfer correctly from the beginning. This email indicates to me, as an experienced division order analyst, that there is a possibility that it was worked incorrectly. That means you may, or may not, owe as much as $15,583.51 remaining, if you ever owed anything at all. Do you have a copy of the deed (or other conveyance) that takes 25% away from your interest and gives it to OM V Minerals LLC? Or was this an automatic reversion of interest provided for in a previous deed, a reversion that occurred in September or October 2017 and effective 11/1/2017 (either by date or by production revenues volume)?
Like I said, I have lots of questions about this transaction.
I have very little information about what exactly they did except that the analyst apparently failed to do anything with those division orders so nothing changed for 2 years and no one noticed. I’d love to chat more about this. We’re still confused by the whole ideal.
I have had similar experience. I get monthy small royalty checks and with these checks are 200 -300 hundred, there are like 20 pages of well listings. 5 cents here, 3 cents there, negative 2 cents here etc.
One month no check. Called. “Revenue please”
Gatekeeper vetos (u can only talk to gate keeper). She theorises that maybe check was less than $100
(Why can’t i speak to revenue since she doesn’t know the answer and now she’s playing telephone).
She emails me back and I couldn’t parse her sentences.
I emailed back that I was not sure what she was saying but IN ANY EVENT, where’s check detail?
No response
