How does an oil company handle royalty monies? Do they put them in an escrow account as such? Or are they commingled with operational funds? Just curious. Since the economy is going south I just wondered if our payments will be held back.
Are you being held in suspense for some reason? You should continue to receive royalties, they will just be smaller checks. If they stop unexpectedly, it is usually a sign the operator is in financial trouble and bankruptcy could be next.
I am simply inquiring “how do oil companies handle royalty monies while they have it before it’s paid to the owners”. Does it all get commingled with their big pot of money? Is it separated as in an escrow account? Do they take a fiduciary stance and insure it’s still intact?
Generally they get paid for production and then pay royalties out of an operating account.
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