Oil and Gas Royalty Audits
Oil and Gas Royalty Audits and Litigation
Signing an Oil and Gas Lease is only the first step of your relationship with an oil and gas drilling operator. The next step is to receive royalties. Consider the legal advice of Sweat Law Offices to ensure you are receiving the correct amount of royalty payments. You have certain audit rights, let Sweat Law protect your rights.
Let’s break it down.
As a mineral rights owner, how do you know if you are about to receive royalties?
Drilling Companies file what is called a Designation of Unit “DPU” Pooling Notice) at the courthouse. This DPU lets the public know that a new unit is being planned with certain landowners included. In the DPU you will find your name, amount of gross acres, amount of net acres in the unit, and original lease date. Once the unit is complete, an operator will send you a decimal interest acknowledgement. The decimal interest is computed by the following formula – your net acres / total acres in the unit X your royalty rate (anywhere from 12.5% – 18%). These decimal interest computations are used to pay your proportionate share of the unit’s total royalties. If your decimal interest is wrong, your royalty payments will be wrong. Most DPU’s are amended several times before the unit is finalized. If an operator does not update your net acres in the unit to reflect the revisions, your decimal interest will be wrong, thus affecting your royalty payments.
Consider legal advice to ensure your royalty payments are correct and accurate. At Sweat Law Offices, we’ve helped thousands of mineral rights owners protect their royalty payments.
We help ensure your royalties are correct through oil and gas royalty audits
How do you know if the production and sales are being measured accurately? Here is where an audit is helpful. Most leases included an audit provisions.
As part of an oil and gas audit, we’ll ensure production and sales are:
§ Measured correctly
§ Accounted for on paper
§ Allocated to you, as the mineral rights owner
Royalty Disputes – Post Production Costs
Are you upset about post-production costs? Post production costs can greatly diminish your royalty payments. Is the operator deducting costs that they are not allowed to deduct? Let Sweat Law Offices make sure your post-production costs are correct.
Reach out to Sweat Law Offices
Don’t let oil and gas companies take advantage of your rights. Contact us to help you ensure your royalties are being computed accurately.