Royalty ownership

I have a question regarding royalties. I have been receiving royalties from an oil field in california. This land was purchased by three families in the 1930's and has basically been paying royalties ever since. I have been receiving royalties for about seven years and my father who passed them to me received them for approx. 22 years prior to his passing. After the land purchase a partnership was formed with three general partners who were elected by the other royalty owners. The three general partners would deal directly with the oil companies, handle all the business associated with the land as well as pay royalties out according to percentages owned. The partnership was always intended to secure the families financial needs. As the years went on through marriage and such, some of the ownership and royalties have not been kept in the family. That's where I come in. I am not a member by blood but by marriage. Last Mont with my royalty check was a letter stating this year the partnership was seeking to figure out how much each share was worth for the purpose of a buyout due to keeping the partnership family owned. My question is can the legally force a buy out if I do not want that? Any help in this matter would be greatly appreciated. Sorry this is so long, I'm more than a little worried.


There are many variable that may come into play, please do not take this as advice of what you should do, but simply insight.

First suggestion would be to get a copy of the partnership managing agreement or by-laws. Every State is different, but generally speaking by-laws are required to be maintained and accessible to every member. I suggest you visit the California Secretary of State to insure the partnership is properly registered with the State.

Depending on how the by-laws are written, there may be a clause to force a sale, but I doubt it would stand up in court. It may cost you $1,000.00 - $2,500.00 to have an attorney give you an opinion, but if you do not wish to sell, the fee may be well worth the money put forth.

Good Luck

Good advice, WV. I was going to suggest that the Partnership Agreement may have a buyout clause in it, too.

Good luck, Jeff!

Thank you for your response. I will check with the Secretary of State to see if they have a copy of the partnership agreement. You'v made me feel a little better and I thank you for that sir.

Yes, it sounds like good advice and I will follow it up. I understand their position, the oil company is seeking permits for over 50 new wells on the land so there's a lot of money on the line. I am so greatful for what I have already received and do feel a little undeserving. A small part of me thinks if it happens i should just accept the buyout, but it's such a big opportunity for my family u don't think i can. Thanks

I read somewhere within the past few weeks where some company has identified something over 700 locations that they plan on drilling. I'll see if I can find the article for you.

Sorry, it was a Google Alert article on EOG in the Monterey Shale that I received about 3 weeks ago. It was 775 locations to drill, but the article was from 2011. Hadn't noticed that before.


In my experience, the Secretary of State does not obtain a copy of the partnership agreement. I presume that you are a partner, although perhaps a minority one, because your interest is in the partnership. Either way, however, you are entitled to a copy of the partnership agreement and can directly ask one of the managing partners for a copy.

Hope this helps.