Transfer of Ownership Delays

Our minerals are in Sections 15 & 22 of 3N 3W and these properties have been producing for a long time. There are a total of 8 companies pumping oil and gas. Not surprisingly, they’ve stayed in the family and my late mother left her share to me and my brother through a well drafted trust. I don’t think there are any legal issues. Title is clear and 5 of the companies have transferred ownership after receiving the request from our lawyer in late April, 2019. (This is all from California except the deed was drafted by a OkCity attorney) The problem now is that I can’t seem to get it done. Two of the companies Newfield (nka Encana) and Sunoco have said they have all the documents and it will happen; however, XTO is not responding to phone messages, fax or email. I can’t even confirm they have the documents. Complicating matters further, my lawyer suddenly passed away in May. Q: Is there a way to get leverage on these companies and XTO in particular to get a response and work this out? We are making final tax filings and I want to be in a position to claim OK tax refund.

Mail the documents to them along with W-9 forms via certified mail so you know they are received. Sometimes it will take 60-90 days for the changes to take place.

On the above recommendation, I did as suggested above sending all relevant documents including death certificate, mineral deed and affidavit to XTO and received green receipt card dated September 30, 2019. The others, Encana and Sunoco have completed the transfer. XTO still has not. I have followed up by email and phone several times to numbers on their website. It’s a nice website with detailed information, but they don’t answer the phone or return messages. I am wondering if it would be worthwhile to pay a local attorney send a letter, but I have no idea if we would have sufficient recourse in pursuing a claim and could it include attorney fees to make me whole? I see no actual damages to recover since they continue to pay my mother’s trust, which is their owner of record, but this will be a nuisance for tax reporting and possibly endless trust administration. XTO is a subsidiary Exxon Mobile for goodness sake! What could be the problem?

Sorry to hear about your issues. Many companies are slow about making changes. Occasionally a letter will grease the wheels of progress. It is not likely that you would recover damages. The company might also escape interest if the checks to the old trust are being cashed.

Thanks for the quick answer. I also do not see any damages, which makes it hard to find a handle. FYI, XTO actually responded within a couple of hours to a Better Business complaint. They said they were moving it to the top of the list, but who knows? At least it’s an answer. I never have tried them before. They at least got an answer so it’s some comfort.

We own wells with over 100 different operators and XTO is one of the slowest to transfer ownership. The default response from their ownership inquiry email (which I’m sure you’ve seen) is 90 business days for processing of these ownership requests. In reality, if your docs are recorded, organized, and you have prior owner numbers to forward, it takes literally minutes for an analyst to make the switch but it’s usually at the bottom of a stack of emails and priorities.

OK law requires that once production starts royalty payments must go out no later than 6 months after the date of first sales and 2 - 3 mos thereafter (depends) unless royalty totals less than $25, for example (see OK Statute 52-570.10). If you have “unmarketable” title, the clock doesn’t start…but that typically doesn’t happen when the prior owner was in pay and there are conveyance docs of record.

With all of that, it may not hurt to reference the OK statute, but even then the only penalty is the statutory interest (if they’re over the deadline) which doesn’t sting much at all for the operators…and then getting them to pay it would probably be another fight not worthy of your time/efforts.

It’s definitely frustrating and I hope their response time improves in the future and that they get your interests switched over soon.

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Statutory interest in OK is 12% which is painful. Many companies will not voluntarily send the interest payment, so you need to request in writing by certified mail return receipt. Sometimes, that moves you up in the queue.