Frequently Asked Questions

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What are oil and gas royalties?
Oil & gas royalties are the mineral owner’s share of income from producing wells.

What is a Division Order?
A Division Order is a document issued by the operator drilling your minerals that with the legal description of the oil and gas property, and the mineral owner’s address, tax ID, and decimal interest in the property. The mineral owner is asked to sign and return the Division Order. The operator uses this information to pay oil & gas royalty income to the mineral owner.

What is the purpose of my Owner Number?
Your owner number is specific to you and is tied to every well connected to you by the operator. Always use your owner number when corresponding with your oil and gas lease operator.

What happens if I change my address or marital status?
Most operators have a change of address form on their website for you to fill out and email back. Include your owner number, old address and new address with zip code, and be sure to include your signature or the signature of your appointed agent. For your protection, address changes are not accepted by telephone. Send a copy of your marriage certificate to update your name as a result of marriage.

What happens when the interest owner of an oil & gas property dies?
Once notified, the deceased owner’s revenue will be held in suspense until the proper heirs can be determined. Upon notifying your operator’s oil and gas landman department, they will send you information describing what must be provided to transfer the interest to the proper heirs.

Can I set up Direct Deposit?
Yes, most oil & gas operators provide an electronic funds transfer (EFT) option. EFT payments are only available for accounts drawn within the United States. If you elect to receive electronic payments, you will no longer receive your payment detail by mail. To set up direct deposit, return the enrollment form provided by your operator with a voided check to the address provided on the form. If you have enrollment questions, please email or call the land department of your operator.

When are royalties paid?
Once clear title of oil and gas minerals are established, most royalty owners will be issued a monthly check, unless the amount due is less than $100. Smaller amounts are accumulated and paid when $100 has accumulated. Most operators generate and mail revenue checks on the last week of each month. If your account is in a pay status and if the account has reached your minimum pay status, a check should be issued. If you have not received your check by the 15th of the following month, call or email your operator’s land department.

What is the difference between a royalty owner and a working interest owner?
A royalty owner shares in production revenues, while a working interest owner shares in both production revenues and expenses.

What type of annual statements will I receive?
Royalty interest owners receiving more than $10 and working interest owners receiving more than $600 annually receive IRS Form 1099. This summarizes your total payments and tax withholdings for the previous year.

What do I do if my check is lost, stolen or becomes outdated?
Contact your operator’s accounting department to stop payment if your check is lost or stolen. Please have the following information ready when you call: your name, owner number and check date. Your operator will stop payment on your check and usually issue a replacement within 10-days. If your check is outdated, void the check, and send it back with a written request for a new check.

Why does my monthly payment sometimes vary?
Many factors contribute to your payment, including: market conditions, oil and gas minerals development, fluctuating commodity prices, regulatory or contractual changes, production volumes, seasonal conditions and well downtime.

Why does my payment differ from others in my family?
This occurs because ownership between family members may not be not equal, or because one party has not provided their operator with a Taxpayer Identification Number (TIN), or because some family members may own interest in other properties in addition to those commonly owned.

Why are the decimals on my Division Order and check detail different?
This occurs due to special marketing arrangements or other contractual agreements. The value is still proportionally correct.

How do I clear the title to my mineral rights? How long does it take?
To properly manage and develop your mineral assets, it’s imperative you define your mineral ownership and legal standings subject to previous conveyances and oil and gas leases. Researching your two chain of titles—ownership and leases—is done by researching through the county abstract company and courthouse where the minerals reside. Before an oil company will lease you or drill your minerals, they will need to complete your chain of title (if you cannot provide it to them) so they know their legal rights and your legal rights to enter into an oil and gas lease and drill your minerals. Finally, your lessee’s attorney will examine title to all mineral rights and submit a Title Opinion reflecting current ownership. This process can take several months to complete.

Taxpayer Identification Number
Federal law requires that individuals and partnerships provide a certified Taxpayer Identification Number (TIN) for the owner account. For individual owners, your TIN is your Social Security Number. Other entities should provide Employer Identification Numbers. If the appropriate TIN is not received, your operator is required to withhold 28 percent from your payment for federal income taxes.

When are oil and gas royalty payments suspended?
For your protection, payments are suspended upon a title dispute, the assignment of interest, notice of death, transfer of property, or in the event of no known address. Keeping your contact information current in your county records and with your operators can prevent this inconvenience.