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Oil/Gas/Payment of oil royalties


QUESTION: I recently received a fairly large payment on oil royalties that I inherited from my uncle. Supposedly this money was held in suspence for approximatly 4 years before they located me.  Now after payment and a mountain of paperwork someone has come forward claiming the royalties as theirs and are asking me to refund the money.  Is there no time limit on things of this sort,  evidently the paper work they have was signed 63 years ago and never recorded.   Thanks for your input.

ANSWER: I work for a purchaser and there is, alas, no time limit for adjustments or changes in my experience. After a time a party's funds may be turned over to the state as unclaimed but they are never lost. But that's something else. The thing that strikes me from what you are saying is that the documentation the third party had is not recorded. I am not an attorney but it is my understanding that most companies only honor record title. If you have recorded probate, an affidavit of Heirship or deed and this other party has similar documentation that isn't recorded then yours should trump theirs. If the money is very substantial you may wish to get a second opinion and speak to an oil and gas attorney to see that they can confirm what I've told you. I assume / hope there is an ongoing mineral interest. Be sure to check on that and with the state for unclaimed property as I alluded to before. In short, I think you should be good. I'm wondering how anyone else found out you claimed the interest / funds.

---------- FOLLOW-UP ----------

QUESTION: I was mistaken,,,the other party did record their documents after we received payment...again 63 years after the fact...will this change your opinion?  Thank you so much for your input...

If you had clear title up to the point where the third party recorded their title; I would think that you are still in the clear. If it had turned out their documents were recorded prior to your uncle getting the interest or your getting the payment that is another matter. I would think if anyone were to contact an oil and gas / title attorney they would tell the other party they should have recorded their documents when they were first prepared. In that case they might have some standing. The sequence of recording matters. You prepared your documents first.


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Jason J. Alexander


I can answer oil and gas division order questions. I am most knowledgeable about as the purchaser side of the oil and condensate production. I can offer suggestions regarding probate and basic transfers of working, override, and royalty interests. DISCLAIMER: I am not a lawyer. I have seem and know what my company for instance accepts pertaining to these matters. Being from the purchasing end (and not the operator side) I do not have much experience with calculations or valuing property or minerals. I do not deal with acquisitions, exploration, or development of leases either.


I am a Division Order Analyst with a crude oil purchaser. I have worked in the division order and customer relations departments for the past 9 with a first purchaser. My company purchases and transports oil for operators and we make revenue distributions on their behalf. I analyze division order title opinions, prior purchaser pay sheets, probate, and other conveyances related to the set up and modification of pay decks (divisions of interest) in leases (wells) of oil around the county. I have been involved in the set-up of our contract pay leases in conjunction with our marketing and regulatory departments.

HADOA: Member, 2013-2014

HADOA: March, 2014 Seminar The Land Department: Division Order Analyst Training Course, 2011 & 2007 NADOA 2010 Conference Land Focus: Fundamentals of Leases & Title Ownership, 2006 Northwestern University, BS Communications

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