Expert: James H. McConnell, CPL - 6/15/2009

Question
My family has an existing lease for a gas well with Goodrich Petroleum.  Since August of 2008, the company has withheld royalties from the gas well on our property, and claims that we were "Paid" royalties in error for another well in the pooled leases.  The check remittances that we have received, indicate that we have never received payment from this other lease.  We have met with the land man, who admitted the company had made a mistake in paying royalties on this other well, but we have never been provided any accounting or notice from the company.  The land man agreed that we should "probably" be paid the royalties due rather than them being withheld (we have this in a taped conversation) but claims he cant persuade the "financial people".  Is there a regulatory authority who oversees this type of thing?  We have received nothing in writing for almost a year, but believe the well on our property is still producing.  Rather than launch a civil suit, at our expense, is there some other avenue available to us?

The wells are both located in Rusk County Texas, and are the Hall, Smith and Hall HT wells.

Answer
Send the company a certified letter, demanding payment within thirty days for all royalties due and owing to you. State that there are no title problems of which you are aware and if there are to send you that portion of the title opinion that sets out the defects and makes the requirements to correct them.  State that any monies due and owing you for ninety days or more after the expiration of the 30 days will be subject to payment of interest by the operator.

Once you have done this and 30 days has passed and still no payment, take the copy of the letter and the return receipt to your lawyer.  You have fulfilled the statute requirements for notice and the lawyer can file suit immediately.  At this point, they could be liable for treble damages.  More than likely you will be paid within 30 days.