Some one please help! On feb 14, 2013, I purchased property in parker county, Texas. I purchased the mineral rights with it. On feb. 20, 2013, Devon Energy cut a check to the previous owner. $4222.00, march$731.00, april $578.00. Does all this belong to me? Devon knows now that I own the rights and have sent Mays payment to me. Property that I have sold with mineral rights in the past, my interest stopped at closing. I'm waiting to here from Devon.
Depends on when you notified Devon of the change in ownership. If it was after those first 3 months, then the seller owes you the money, not Devon. Devon is responsible to you for all royalties that accrued after you notified them that you were the new owner.
Hi Mr. Lyons, It looks to me that the checks are cut for the owner at the time the production happened. It takes awhile for the checks to arrive and it is usually a couple or three months.or quarterly. I would think this explains the timing.
Hope this helps.
Regards,
Ralpr
I defer to Andrew on this - I did not know it was dependent on the new owner notification.
I’m assuming that the oil and gas lease Devon has on the property contains the standard clause from virtually every lease that would be similar to this: “No change or division in the ownership of the land, or royalties shall be binding upon Lessee for any purpose until such person acquiring any interest has furnished Lessee, at its principal place of business, with a certified copy of the instrument or instruments, constituting his chain of title from the original Lessor.”
Ralpr also makes a valid point that royalties on production occurring before the date of sale would belong to the previous owner, and because the first royalty check may not come for up to nine months from the date of first production (3 month delay afterward), it is quite conceivable that these post-sale payments were for pre-sale production.
a family member of ours sold for a lot of money just recently. The buyer had it in the sales contract that ALL royalties paid from start of production (happened at about the same time as the sale was completed) was to be paid to new owner. Then new owner told producer of the change and sent transferred title. What I am saying here is that it should be in the contract between buyer and seller, NO?
Cookie, I think the buyer would only be entitled to royalty from the sale date on, if the language was not present that the buyer was buying effective to first production. If the buyer did specify from first production and the seller had been receiving royalty, then the seller would owe the buyer the royalty they had collected.
Cookie Gartner said:
a family member of ours sold for a lot of money just recently. The buyer had it in the sales contract that ALL royalties paid from start of production (happened at about the same time as the sale was completed) was to be paid to new owner. Then new owner told producer of the change and sent transferred title. What I am saying here is that it should be in the contract between buyer and seller, NO?
Exactly. I think that should answer the buyer's question above. It depends on what the contract between him and the seller says. if that matter was omitted, he will have a hard time collecting.
r w kennedy said:
Cookie, I think the buyer would only be entitled to royalty from the sale date on, if the language was not present that the buyer was buying effective to first production. If the buyer did specify from first production and the seller had been receiving royalty, then the seller would owe the buyer the royalty they had collected.
Cookie Gartner said:a family member of ours sold for a lot of money just recently. The buyer had it in the sales contract that ALL royalties paid from start of production (happened at about the same time as the sale was completed) was to be paid to new owner. Then new owner told producer of the change and sent transferred title. What I am saying here is that it should be in the contract between buyer and seller, NO?
This is a scenario that many people engaging in the sale or purchase of property must consider and make a part of their contact. I am increasingly hearing about situations like this where serious matters regarding minerals are not addressed before closing.