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Do Not Take Oil and Gas Companies at Their Word

Do Not Take Oil and Gas Companies at Their Word

This is the second occasion I’ve had to write about a payment dispute with an oil and gas operator – a dispute that uncovered a massive mistake.

I’ve had the opportunity to talk to a lot of landowners who have had payment disputes over their royalties. Some have been legitimate disputes, but others have simply been large mistakes that would never have been corrected had they not reached out for help.

One such individual recently stopped receiving royalty payments. While questioning their royalty operator, they were told there had been a mistake in payment and the individual had been overpaid over the prior months. They were told they would not receive their monthly royalty checks until the overpaid amount was paid back.

The company, however, refused to explain the reason for the amount of the overpayment. They refused to send monthly statements reflecting the amounts being paid down on the overpayment.

We sent requests to the company and finally received two separate excuses for the overpayment.  Each excuse proved false. We were even told to track down and speak to one of the company’s operating partners to seek reimbursement. It was that operating partner that had to direct me back to the original company for the real answer.

Ultimately, after the facts and explanations failed to make sense, the operator finally admitted there had been a mistake. There had not been any overpayment at all. Our client should have been receiving money the entire time.

Unfortunately, this is not the first time this situation has happened. And I can imagine many royalty owners are currently facing the same situation.

If you’ve been told by the gas company you will not be paid because of an error in your prior payments, please question the claim. Ask the company to explain their position. Reach out to attorneys or mineral auditors who might be able to understand the situation and ask the right questions.

You can always talk to us here at Bordas & Bordas, PLLC, or the friendly people at Bordas Mineral Management. We are here to help you find the answers to your situation and to get you your correct payments.

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