Who paid the taxes and received royalties if I'm a newly found Mineral Owner

So if it turns out that I am the owner of the mineral where has all the royalties gone to over the last few years and who paid the taxes? Does anyone know how this works?

If you owned mineral interests which were not leased or drilled, there would have been no income, and therefore no taxes. (I own in Texas and NM where there are no property taxes on the underlying minerals, and am assuming this is the case in all states.) I am assuming you own no surface, just the underlying mineral interest.

If there had been production and nobody could locate you, I assume state law would have attributed a certain royalty interest to your share of the minerals. The oil or gas company is not allowed to keep your share. It has to be turned over to the state under a process called escheatment. Each state has an unclaimed property division. The party which escheats or turns over money to the unclaimed property division or unit provides a list of names and dollar amount being turned over attributable to each person. This is usually done annually. (The same process is used, for example, by banks if an account sits idle for many years and the owner can't be located. That is why it is always a good idea to generate some activity every couple years or so in your various bank accounts, by the way.) If the individual discovers that the state is holding money for him, there is a paperwork procedure by which the individual claims the money is his, and the state will pay it over to him. I seem to recall some states do pay interest as well. You can google "unclaimed property Texas", for example, to locate the website of the state department.

I do not know anything about how a royalty percent is set for a mineral owner who cannot be located. It may be a "statutory" percent, on the low side, or possibly it is an average of what the other owners were given. And I assume the unlocated mineral owner loses out on getting any bonus. If your mineral interests were inherited, it's possible your royalties were being paid under a lease made long ago by your deceased benefactor or ancestor, in which case your royalty percent would be in accordance with that lease, which would be on record with the County Clerk or Register of Deeds.

It can be beneficial to occasionally check for unclaimed property in states where your payors and accounts are located, just to see if anything has been turned over to the state in your name. You should initiate bank accounts activity of the type that requires identification, such as a withdrawal at the teller window; a deposit alone may not be sufficient to stave off escheatment. Banks have differing time lines for escheating various types of products. Inactive savings and checking accounts, and other unclaimed products such as money orders, CD's, etc., are all turned over to the state eventually but after varying number of years of inactivity.

Lori,

Some states do not tax severed mineral rights so there may have been no tax. Unless there were productive wells drilled involving your minerals, there may have been no royalties paid and no severance tax due. Find out from State regulators if your land has been in any drilling units. At least that is a place to start.

My property has been under lease with chesapeake for the last 3-4 years that was signed and leased by the previous owner who passed away shortly after the lease was signed, and they have been drilling they are six wells producing.

Gary L. Hutchinson said:

Lori,

Some states do not tax severed mineral rights so there may have been no tax. Unless there were productive wells drilled involving your minerals, there may have been no royalties paid and no severance tax due. Find out from State regulators if your land has been in any drilling units. At least that is a place to start.

Gary L Hutchinson

Minerals Management