RRC Holding Checks to recover the losses on an ongoing accounting error (Sec. 30, Lincoln Parish)


We own royalty interest in several sections/plots in North Louisiana, with 3 different lease contracts covering a dozen or so wells spread over the 3 with varying division orders.

This month, we didn’t get a check from RRC, so we logged on to the owner relations website and found that we didn’t even have a statement. We left a message and when the RRC representative called us back we were told that they hadn’t been collecting post production expenses for the past 8 years. They said they are holding our checks until they recover their money- which if current prices hold, means we’ll go 7-9 months without checks. (I still can’t believe they just stopped them- no phone call, no email, nothing. When we asked about that, we were told by the representative that they have too many owners to try to keep up with all that… :angry: )

If I recall correctly, 2 out of 3 of our leases have provisions which prevent them from charging us those expenses. The one that they are talking about did not have that provision. That contract was signed with Wild Horse (who sold to MRD who sold to RRC), and nobody caught their error in all this time. We didn’t even know we were supposed to be charged that, and had we known about it would have certainly told them.

My questions are these:

  1. If the other wells are under different division orders and different parcels and different contracts- how can THEY be encumbered by a mistake that these companies made on the other well charges?

  2. Is there any precedent for requesting that they extend the recouperation time? We have some disabled family members who depend on these checks for day to day living expenses, rent, groceries, etc. They can’t go 8 -10 months without money.

  3. Is it worth asking a lawyer to go at them hard on Monday? I’m inclined to go over to their offices myself (they are headquartered in Ft. Worth and I live in DFW.) and see if I can negotiate for a longer pay back or something…

I don’t want to stiff them (although I do think they bear some responsibility and they deserve to be held accountable for this heavy handed approach). I don’t mind them getting their money back, but to come in and just stop all checks - which is several of our family’s only form of income, because of a mistake that was missed by 3 different gas production companies, is unconscionable.

Any advice?

Sounds like it might be time for an attorney. Just a note, many accounting software packages are set to take the post production charges and unless you call them out on it and show your lease, they will ignore you. Good idea to follow up. If this lease did not have the protection, then maybe you can work out a longer payout. Going in person might help before calling an attorney.