NC, http://en.allexperts.com/q/Energy-Industry-Oil-2441/2008/9/Top-Leas…
Thank you Martha - as always you are a wonderful source of knowledge. There are about 5 months left on my lease. It seems from county records that most of the leases in the immediate area are to Crown at 3/18’s. Off the top of your head, do you know other companies active in the area?
Finally got a response from AEP thru OCC. I need to ask a question or two. The Lady at OCC (Donna Darnell) forwarded an email from AEP to her that said my check had been sent. This check was supposed to have been sent in August 2014. It is for the first four months,Feb thru May. My Brother and his son-in-law both received theirs at that time. My interest decimal was wrong, 3/16 on the DO and should have been 1/4. They sent a second DO and I signed and sent it back on Sept.2nd 2014. My understanding is if payment is late they owe 12% interest. Can some one tell me if this is correct? If so how do I figure the amount they would owe me? Thanks greatly, JC
JC,
B. 1. Proceeds from the sale of oil or gas production from an oil or gas well shall be paid to persons legally entitled thereto:
a. commencing not later than six (6) months after the date of first sale, and
b. thereafter not later than the last day of the second succeeding month after the end of the month within which such production is sold.
D. 1. Except as otherwise provided in paragraph 2 of this subsection, where proceeds from the sale of oil or gas production or some portion of such proceeds are not paid prior to the end of the applicable time periods provided in this section, that portion not timely paid shall earn interest at the rate of twelve percent (12%) per annum to be compounded annually, calculated from the end of the month in which such production is sold until the day paid.
- a. Where such proceeds are not paid because the title thereto is not marketable, such proceeds shall earn interest at the rate of six percent (6%) per annum to be compounded annually, calculated from the end of the month in which such production was sold until such time as the title to such interest becomes marketable. Marketability of title shall be determined in accordance with the then current title examination standards of the Oklahoma Bar Association.
Martha, Thank you immensely ! I am supposed to talk with Mr. Gilkes this week and I will “nicely demand” the interest and a copy of the calculations. If he tries to stall me, I’ll send by certified mail a copy of the statute and my corrected DO. Does that sound correct? JC
Martha, I decided to email Mr. Gilkes the information in advance of our conversation this week. I’m sure he is already aware of the statute. Again, Thank you very much. JC
Important news. Tronox (a spin off from Kerr McGee) Announces Agreement to Acquire Alkali Chemicals from FMC Corporation. AEP owner Aubrey McClendon is the great nephew of Robert S Kerr.
FMC’s Alkali Chemicals specializes in Lithium and had proposed to spin off it’s Lithium production company, but is selling it to Tronox instead. The top 2014 priority of FMC Minerals was to boost lithium.** **
Lithium occurs in a number of pegmatitic minerals, but due to its solubility as an ion, is present in ocean water and is commonly obtained from brines and clays. Brine is oil and gas production waste water.
http://www.reuters.com/article/2015/02/04/fmc-divestiture-tronox-ltd-idUSL1N0VE03020150204
Background info:
My family and I are in the (what we thought were) the final negotiations on a mineral lease for one of our properties. We are individuals negotiating as a group. We are in agreement with oil company on all terms except one. In the “standard” lease they require "Lessee shall have the right to use, free of cost, gas, oil and water produced from said land for its operations thereon, except water from wells of Lessor. I have been told by the Landman that it is “impossible” to produce the well without these temrs. Is this correct? We have no problem with Oil Co. using some product on site we just want to be paid for the product taken from our property. We have also been told there is no way to measure these items (gas, oil and water) before it is used. ?? Found all kinds of flow meters using Google search. Can’t Oil Co. put flow meter in line before they syphon product off? Finally, If we go to forced pooling there is only one other contract (other than my family) They did not negotiate at all. They just open envelope grabbed pen and signed lease. marginal terms compared to what we have been able to get. Final question. If we go to forced pooling (and there has been no mineral lease activity in 9 sections around ours for more than 1 yr.) Are we forced to take the best of what has been leased or what we have partially agreed on? hammering out the rest? Thanks!!!
US oil production at 9.3 million barrels/day from EIA’s 2/20/2015 weekly crude oil production data. 2016 EIA estimates $71/barrel WTI and $75/barrel Brent.
Received my check today from AEP for Feb thru May 2014. Martha, I took your advise and stated in an email to a person at AEP, what I’m sure he already knew, about the Oklahoma statute 52-570.10. He said he’d check on it internally and get back to me. Again, Thank you JC
Folks, Back in the 90’s Chesapeake (same owner as AEP) owed me a large late payment interest amount and finally paid after I told them I was coming to their OKC office every day with my attorney and a Channel 4 News team until they paid. Honestly, you have to use whatever legal means you have to MAKE them pay. They make millions by using your royalty revenue free of interest.
Martha, you are so right about AEP. Yesterday we received the first royalties for another well - the first four months (Sept-December) on time. But: for Sept, Oct and Nov, AEP paid the royalties on the basis of 25% of our decimal interest in the well (as shown on the division order that accompanied the check). The December amount was paid at the correct rate. A note from AEP mumbles something about an updated division order title opinion, and that that they plan to review the first well in light of this opinion. That well being the one on which they owe us interest. Maybe time to go to war. Sam
Sam, Hit hard and never give up.
Grant, An attorney in Houston suggested putting minerals in an LLC then turning around and leasing your LLC minerals to yourself. As far as the water goes, get an attorney to help you design a lease clause for water according to your wishes.
Martha, JC, Sam - I’m still pursuing a claim for interest from AEP. Probably not as far along in the process as you are. Still trying.
“If your royalty payment is due under an oil and gas lease you signed, you also have a claim against the lessee for breach of the oil and gas lease, entitling you to collect the amount due plus interest and maybe attorneys’ fees. Before bringing such a claim, you must give 30 days’ written notice by mail of the Payor’s failure to pay you. If the Payor does not respond within 30 days with a reasonable cause for nonpayment, you may sue the Payor in the county where the well is located (apply The Oil and Gas Owner’s Lien Act of 2010). (Also, you can group together and file a class action lawsuit.) If the operator is the party responsible for payment, you may also wish to notify the company or companies purchasing the well’s production of the operator’s failure to pay and demand that the purchaser pay your share of production proceeds to you directly. This is not likely to get you paid, but it may cause the purchaser to withhold payment to the operator of your share of proceeds, thus “trapping” the money with the purchaser. Finally, if the facts show that your operator/lessee is simply pocketing your royalties, you may be able to obtain assistance from your local district attorney. The operator’s failure to pay you may be a crime for which the operator could be prosecuted. The prosecutor would have to show that the operator has taken and used the royalty funds as his own and intentionally deprived you of your royalties with no legitimate excuse.”
http://www.tlma.org/pdf/news_payment.pdf
http://www.propublica.org/article/unfair-share-how-oil-and-gas-dril…
http://www.law.ou.edu/sites/default/files/files/FACULTY/04%20joosha…
February 27, 2015 price for NGL ($/Bbl) 23.41
Martha, JC: I’ve been there, done that with AEP regarding the 12% interest - telephone, email and registered letter. Each contact person has been very helpful in promising to check on the status of my request. And each person has been very careful to explain that AEP is still working on the problems involved with the Calyx acquisitions, etc. etc. etc. We did finally get the royalties from April and May 2014 - in December. Not holding my breath about the interest. Smonsey.
Don’t believe what they say and watch what they do. Saudi Arabia claims it can endure low oil prices for 4 more years, but the Princes have started selling real estate. http://www.wsj.com/articles/a-saudi-princes-new-york-nest-is-listin…
China announces it is cutting it’s coal usage and increasing it’s oil reserves in 2015. This should relieve some of the oil supply glut and help stabilize oil prices. Also, China gets to fill it’s 90 days strategic reserves with inexpensive oil. http://www.wsj.com/articles/china-plans-to-build-its-commodity-hoar…