Monitoring Your Royalties & Lease Compliance

  • By:Sweat Law Offices

Do you fully understand your oil and gas lease and what you are owed? With oil prices dropping, some oil and gas companies have fallen short on paying royalties that are owed. The ripple effect has caused class action suits to emerge.

How can you protect yourself?

At Sweat Law Offices, we recommend a few strategies related to monitoring your lease compliance. Land and mineral owners face a constant battle to ensure lessees are complying with their oil and gas leases.oil and gas law, oil and gas lease, royalties

  • Understand what you are owed. Are the royalties being calculated accurately? Your check stub should include certain information such as codes that indicate the product, type, etc. Get familiar with these terms so you know how to read your checks.
  • Know the terms of your lease. It sounds simple, right? But many landowners do not understand how their royalties are calculated and paid especially based on term, production, and compliance.
  • Monitor production activities. In some cases, a lessee is contractually bound to notify you of their actions. Not always. You will need to know when a well is completed and production has ended.
  • Is a royalty audit necessary? Audits are expensive, depending on the terms of the lease, how many wells, and the complexity of the lessee’s internal operations. But they do identify large underpayment issues.
  • Has production stopped? Is the lease still in effect? How does a gap in production affect the terms of your lease?
  • Has there been a spill or leak? Have these spills or leaks been reported, remedied, and cleaned up? How does this affect your lease
  • Consider consolidating funds to pay for an audit on property that is affected by multiple parties.

Not sure where to begin?

Reach out to Sweat Law Offices today to find out how we can help you monitor you royalties and lease compliance. It’s a complicated process for sure, but we have the proven ability to help landowners protect their mineral, oil, and gas rights.

Posted in: Legal Consultation, Professional Lawyers