In Texas, when a well initially goes to sales after production begins, the operator has up to 120 days after the end of the first month’s sale to pay royalties. That’s why it sometimes takes several months to receive a check on a well that has just begun producing.
Many mineral owners can become anxious or concerned when they don’t receive a check after the first month’s production, but there is no need to worry within the 120-day time frame. All proceeds from production are included in the initial check.
After the first check is cut, payments are made based on the terms agreed upon in the oil and gas lease between the operator and the mineral owner. If there isn’t any language specified for a payment time frame in the lease, the state of Texas mandates proceeds from oil wells be paid in no less than 60 days, and 90 days for gas wells.
Operators can sometimes lose oil and gas leases due to their failure to meet the terms of payment specified in a lease agreement. In this scenario, the operator may be forced to re-negotiate the lease with the mineral owner, particularly if it is a valuable asset to the company. At minimum, the state of Texas requires that the operator pay interest on late payments.
Hi Kirk,
I’m wondering about the laws in Montana? Im having trouble getting the oil company that is producing to get my royalty check to me period! Wrong addresses and lack of communication on their part. They won’t even return my phone calls so I can correct my address with them. Any advice? How long after production does the operator have to pay before interest is due? What recourse do I have for late payment?
Marie, you have to deal with them in writing, if there is not a paper trail, it never happened. Sometimes you need to have a lawyer send the letter on the law firms letterhead.
Thank you r w …I was anticipating having to see a lawyer about this. I will do that. I have a paper trail of sorts…envelopes with wrong addresses on it…etc, etc…so, I will let the attorney deal with it.
I am currently having a problem with the operator of my oil well. The company underwent a name change from Nestex to Temprano last October. Since that time I have not received any gas royalty checks and my research shows that Temprano has failed to file production reports with the Texas Railroad Commission since November, 2014. Wondering if I have any recourse in getting Temprano severed from my lease agreement and what steps I must take. I sent the president a certified letter advising him of all lease shortfalls but not sure how to proceed from there. Wondering if anyone else has experience with this in Texas.
The president of Temprano is trying to tell me there is evidence of overpayment to me on gas royalties. The well has been producing since summer 2009 and I have complete records of all oil and gas production reports and payments to me. I see no evidence of any overpayments and don't believe that is a valid excuse for Temprano to cease sending production reports and payments.