Oil/Gas/Statutory Interest in Oklahoma
I sure hope you can help me in this, no luck from another forum regarding this very specific question. I was paid some interest at 12% per annum from an operator recently. But the operator only paid me for the duration of the time they became the operator of this well in McClain Co, Ok. But the funds that I was paid the interest on were for production from Sept. 2004-2012 which was the end of production from this well. Detailed report read like this: Sept. 2004 @ 3.73 years=$$. They came on board as the new operator in October 2009 & I found these funds in 2013 which is when they paid me my back royalties. Asked for the interest late last year which like I said I've received now. How do I receive or go about trying to get that interest for the other years? The operator before handed over those funds to the now operator. They didn't escheat the funds to the state so could I ask the old operator to pay me interest for other years. Hope this makes sense.
Thank You for any advice on this.
I don't have any "case law" handy, but the STATUTE requiring interest on late royalties can be found within the Oklahoma's Production Revenue Standards Act, which consists of Sections 1-15 of Title 52 of the Oklahoma Statutes (see below).
I don't see the harm in contacting the old operator either, though they may have turned any money they had for you over to the state years ago, in which case you'd need to contact the Secretary of State to claim it, and no interest would be paid on money the State holds.
§52-570.10 Sections B and D from the Act "Payment of proceeds from sale of oil and gas production" include info related to your question. I've included some of it below. In most cases you are due interest on late payments (late is also defined in the Act) at the rate of either 6% or 12% depending on your situation (see below.)
§52-570.10. Payment of proceeds from sale of oil and gas production.
B. Except as otherwise provided in this section:
1. Proceeds from the sale of oil or gas production from an oil or gas well shall be paid to persons legally entitled thereto:
a. commencing not later than six (6) months after the date of first sale, and
b. thereafter not later than the last day of the second succeeding month after the end of the month within which such production is sold.
D. 1. Except as otherwise provided in paragraph 2 of this subsection, where proceeds from the sale of oil or gas production or some portion of such proceeds are not paid prior to the end of the applicable time periods provided in this section, that portion not timely paid shall earn interest at the rate of twelve percent (12%) per annum to be compounded annually, calculated from the end of the month in which such production is sold until the day paid.
2. a. Where such proceeds are not paid because the title thereto is not marketable, such proceeds shall earn interest at the rate of six percent (6%) per annum to be compounded annually, calculated from the end of the month in which such production was sold until such time as the title to such interest becomes marketable. Marketability of title shall be determined in accordance with the then current title examination standards of the Oklahoma Bar Association.
b. Where marketability has remained uncured for a period of one hundred twenty (120) days from the date payment is due under this section, any person claiming to own the right to receive proceeds which have not been paid because of unmarketable title may require the holder of such proceeds to interplead the proceeds and all accrued interest into court for a determination of the persons legally entitled thereto. Upon payment into court the holder of such proceeds shall be relieved of any further liability for the proper payment of such proceeds and interest thereon.
You could get an attorney to help you with this if the old company is not responsive, or makes a "statute of limitations" claim. I'm not an attorney and there are other things in the "Production Revenue Standards Act" (part of which I've been quoting from above) that may lead the company to believe you are not due interest. The entire Act can be found online if you want to read the whole thing.
Hope this helps you out.
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub