Unclaimed Oil and Gas Royalties – Why Does This Happen?
October 23, 2018
Does the state of Texas owe you money for selling oil and gas royalties?
You may be entitled to some of the millions of dollars annually deposited into the state’s suspense fund every year and not even know it.
That money really adds up after a while, especially considering less than half of the money is claimed annually by its rightful owners.
If you’ve owned land, offered your gas and oil royalty for sale in the past, or you’re related to someone who has, read on.
Millions in Yearly Unclaimed Oil and Gas Royalties in Texas
The oil and gas industry in Texas generates huge amounts of money for energy companies, their customers, and private individuals selling oil and gas royalties.
What is interesting to note is that of all these earnings reported to the state, energy companies are ending up with upwards of $40 million annually that goes unclaimed.
The money belongs to someone, but they don’t know who or where that person is.
How can this happen, you might ask?
There are quite a number of reasons why companies producing oil and natural gas end up with unclaimed funds that belong to unknown parties.
Some of the most common reasons why include:
- An unknown inheritance of mineral rights.
- Individuals who sell their oil and gas royalties, move, and leave no forwarding address.
- Incorrect name or address information that prevents checks from going through.
- Property and mineral rights title issues.
- Unknown or unlocatable land or mineral owners.
- Unclaimed funds/uncashed checks.
What Happens When Energy Companies Don’t Know Who to Pay?
Because many of these issues concern very small rights and royalty payments, production companies can easily continue production whether the money is being claimed or not.
In cases where ownership is unknown, the company can simply apply for receivership through the court so they can proceed with production.
In doing so, a specific share of the proceeds is negotiated for the absentee owner in the same way they would negotiate their gas and oil royalty for sale if they were present.
Regardless of the reason why royalties go unpaid, production companies must put all of these funds into what is called a suspense account.
This is handed over to the state along with all records every three years.
At that point, the responsibility of returning funds to the rightful owners now lies with the state, although they will not look for these individuals.
Those who think they may be owed some of this money have to actively seek it out.
How Can You Find Out if Some of This Money is Yours?
Although it can take a little bit of effort, those who think they could be owed funds for selling oil and gas royalties should begin by contacting the land department of any oil production companies producing from the land/rights in question and explain the reason for calling.
They can usually determine whether someone is owed money and whether those funds are now in the hands of the state.
If the funds have already been turned over, it is then necessary to apply to the state with records and/or proof of ownership to free any held funds.
The other thing people can do is work with a royalties company that can help them determine if they are owed money and how to access it.
If you’ve recently inherited land in Texas, had a relative in Texas pass away, moved, or feel there’s any way you might have some money sitting somewhere from gas and oil royalties for sale, it might be worth looking into.
There are millions upon millions of dollars sitting idle in a state fund and it all belongs to someone who has been selling oil and gas royalties. Maybe some of it belongs to you!
Questions About Selling Oil And Gas Royalties In Texas?
Let Permico Royalties Help You With Gas And Oil Royalty For Sale!
Call (432) 242-7335!
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