I understand that in Texas operators may be able to hold proceeds until the amount due reaches $100. Is there any requirement that they must pay annually even if the amount is less than $100. Is there any recourse in TX for getting paid on smaller amounts?
The TX Natural Resources Code states there is a statutory requirement that accumulated oil and gas royalty payments that do not reach $100 be paid at least once within a 12-month period, IF the amount due has reached a minimum of $10.
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You can also change the Division Order minimum from $100 to $25 by filling out a new one.
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Do you make your own DO and if so, how? Or do you ask the company to send a new one and change the amount once you get it? These are inherited minerals so I don’t have the original DO.
You can use the NADOA template and fill in the correct information. Or you can ask the operator to send a new one and check it against the NADOA form. You do not want them to change any terms on the lease. I use the NADOA form if the operator form is trying to make it longer than a page and change anything that they should not change.
You have to double check the decimal amount to make sure that it is correct and matches your net mineral acres, royalty, etc.
0_NADOA_Division Order Model Blank Form 2017v 2.pdf (78.2 KB)
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Oklahoma has such minimum amount also. Haven’t received a check in many many months
OK has a minimum of $25 if you request it in writing.
Does Oklahoma have a minimum amount in royalty payments per year before you have to file a state income tax return?
Check the OK code, but in 2025 any non-resident must file if over $1000 in income.
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However, it appears there is no minimum amount of income for an LLC established in Texas and treated as a partnership, and the LLC must file Form 514 if there is any income whatsoever from Oklahoma sources. Do you agree?
I am not a CPA. Our TX LLC files for any amount of income in OK.
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Thanks, and I understand. Sometimes I think I need to be a CPA to understand some of these rules!
I know I rely on our CPA to know the rules!
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TX Nat Resources Code Sec 91.402 likely has the information you are looking for. 91.402(f) states, “Payment may be remitted to a payee annually for the aggregate of up to 12 months’ accumulation of proceeds if the payor owes the payee a total amount of $100 or less for production from all oil or gas wells for which the payor must pay the payee. However, the payor may hold accumulated proceeds of less than $10 until production ceases or the payor’s responsibility for making payment for production ceases, whichever occurs first. On the written request of the payee, the payor shall remit payment of accumulated proceeds to the payee annually if the payor owes the payee less than $10. On the written request of the payee, the payor shall remit payment of proceeds to the payee monthly if the payor owes the payee more than $25 but less than $100.”
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Thank you. I did get a check for $10.85 a few days ago.