I recently purchased a property in Ohio that is included in an oil and gas lease and has a current operating well behind the property. ( to be clear, the original lease covered 110 acres and states that if the property is ever to be divided royalties are to be split amongst the different property owners/ mineral right holders). We currently own 10 of those acres and have determined that we own half of the mineral rights of those 10 acres. When the 110 acres were split, the well ended up on another parcel and the storage tanks on ours. The previous owner never received any royalties and never looked into it despite being told by the original owner who executed the original oil and gas lease, that they would received royalties. My question is, who is responsible for distributing the royalties to the correct people? Why would the previous owner and ourselves not have received them? I have an attorney working on this but was hoping for some additional opinions. The attorney said we may be able to go back up to 4 years on royalty payments if the previous owners will sign over their interests. I’m just curious how complex this will get considering he was excluded from all royalty payments. Will the oil company be responsible and have to pay it out? The previous owners owned this property from 1993-Jan 2021.
It is the mineral owners responsibility to notify operators of wells that there has been a change in ownership.
So if they haven’t been notified of any change in ownership, where does that share of money go?
Quite possibly to the party that sold the minerals. If that party didn’t notify the Operator of a change in ownership then they are probably still collecting the checks.
As Todd indicated, at least in Texas, it is the new mineral owner’s responsibility to notify the relevant oil company of their ownership. If the prior owner did not get royalties, it’s likely that either: 1) he or she did not own the minerals; or 2) he or she did not notify the oil company of their ownership. The oil company distributes royalties according to their original title opinion that they did when they drilled the original well, as modified by any change of ownership notices they received since then. Generally, the oil company is not liable for past royalties if they did not receive proper notice of new ownership.
Aimee- thanks for further clarification. Although the question has to do with Ohio minerals, it probably is close to the same.
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