Oil & Gas Royalty Underpayment
Are you entitled to royalties for owning Oil & Gas interests?
Oil companies have the knowledge and funding to explore for oil and gas, as well as to produce it. When oil or gas is discovered, companies negotiate with landowners to access those resources in exchange for payment.
Generally, landowners and others are entitled to a part of the profit whenever oil or gas production begins. Landowners with oil or gas production on their land, as well as others with an interest in a piece of property, are often entitled to a cash royalty for any oil or gas production from their land.
The Oil & Gas industry is experiencing a time of huge profits, but royalty owners are being unfairly shorted their full due for their interests at an alarming rate. Those who own an interest in Oil & Gas are entitled to full payment for those interests under the law.
Operators and producers in the Oil & Gas industry are reportedly withholding up to 90 percent of royalty payments—sometimes it is an honest mistake because of the complexity of the laws and regulations surrounding mineral rights, but Oil & Gas companies also knowingly cheat owners out of royalty payments just because they think they can get away with it.
Whatever the reason for the underpayment, those with an interest in Oil & Gas Royalties have a legal right to fair payments.
REASONABLY PRUDENT OPERATOR
Operators and Producers in the Oil & Gas Industry have an obligation to make fair payments to royalty owners in all circumstances.
The “Reasonably Prudent Operator” standard takes economic motivation into account, but also requires Oil & Gas producers to act in good faith with regard to Oil & Gas royalties. Unfortunately, there are a number of ways Oil & Gas Producers and Operators fail to act in good faith leading to underpayment, including:
- Failing to obey express and implied covenants in Oil & Gas leases, operating, and/or unit agreements
- Using a lower than the current market price of gas price to calculate royalty payments
- Deducting excess fees from royalty payments
- Entering into incestuous arrangements where a producer gives itself a cheap deal on a mineral estate’s valuable production
- Failing to pay royalties for gas used in manufacturing
- Damaging or polluting surface estates beyond repair
- By depleting, wasting, or destroying mineral estates
- By simply refusing to pay royalties worth thousands or even millions of dollars
Underpayment or refusal to pay Oil & Gas royalties by the industry can have disastrous consequences for those entitled to payment. Oil & Gas royalties are owned by many different entities, including landowners, trustees who oversee mineral rights for beneficiaries, and charitable organizations.
By failing to make payments, those entitled to an Oil & Gas royalty are left with complex agreements they must try to enforce against large businesses with seemingly endless legal resources and expertise to fight the claims.
It is sometimes difficult for those with an Oil & Gas royalty to be taken seriously by Producers and Operators. Those with a claim are often ignored by big business or bullied into taking smaller payments than they are entitled to. An experienced Oil & Gas attorney can help ensure royalty owners get their fair share.
Oil & Gas Royalty Underpayment Lawsuits
Oil & Gas royalties can be enforced through legal action by an attorney on behalf of an individual royalty owner. An experienced Oil & Gas attorney can help navigate the complex web of laws, regulations, and agreements to ensure those entitled to Oil & Gas royalties get their fair share. Royalty owners are often surprised by how much the Oil & Gas industry owes them.
Those with Oil & Gas royalties due should not stand for being cheated by the industry. An attorney can ensure that those with a claim for Oil & Gas royalties are taken seriously by the industry.
Unfortunately, many people are being pushed around by the Oil & Gas industry and not being paid their fair share for their interests. An attorney can help determine whether you are receiving your fair share for your Oil & Gas interest and make Operators and Producers in the industry pay attention to your claim.
HOW DO I GET MY OIL & GAS ROYALTY?
If you are due a royalty or have a working interest claim for being deprived of your share of the deal for your Oil & Gas royalty, the first step is to get an attorney to evaluate your case. Using the secure online form on this page, you can share the details of your situation with an experienced Oil & Gas attorney for free.
After figuring out the details of your claim, your attorney can determine the next best step. Our attorneys at McDonald Worley have worked with countless clients throughout the country and can ensure your case is taken seriously and that you get a swift response.
Don’t stand for getting less than what you deserve from the Oil & Gas industry. Whether the path is negotiation or litigation of your case, we can help make sure your interests are protected, and that your needs are being taken seriously by those who want to cut you out of the deal. Learn your legal options today. You don’t pay anything unless you win.