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Post-Production Costs and Your Royalty Check

After you have sold the rights to your mineral or oil well, you should start receiving royalty checks. While this is generally an exciting occurrence, many royalty recipients become disappointed by the amount of money they receive from their checks. Upon further inspection, these unhappy lessors realize that a number of expenses have been taken out of their royalty total, rendering the checks much smaller than originally anticipated. Quite frequently, lessees try to hold on to the money in their pockets by taking what they call “post-production costs” out of the royalties they owe to the property owner. The exact parameters of your specific agreement depend on the contract you signed upon selling your mineral or oil rights; however, under most oil and gas leases, the lessee is responsible for expenses related to exploration and production. In other words, you may be entitled to more money than you are getting.

At the offices of Gagnon, Peacock & Vereeke, P.C., our attorneys have dealt extensively with real estate litigation, and we possess a plethora of knowledge when it comes to oil and gas disputes. If you are currently engaged in a dispute over your oil and gas royalties, call us today to find out how we can help.

Common Exploration and Production Expenses

Individuals who are weighing the pros and cons of entering into a mineral rights agreement with a lessee would benefit greatly from seeking the counsel of an experienced attorney. Costs that lessees should not typically be held responsible for include the following:

  • Geophysical Surveying
  • Drilling Wells
  • Testing Wells
  • Reworking Wells

There are a number of post-production costs that may be assigned to either the lessor or the lessee, such as gross production and severance taxes. When considering these costs, a property owner should certainly consult an attorney before entering into an agreement. Lessors who are engaged in a conflict over such costs should also contact a qualified attorney to assist them in their dispute.

Contact a Dallas/Fort Worth Oil and Gas Royalty Dispute Attorney

Navigating the complex world of oil and gas disputes can be incredibly tricky for individuals without extensive training and experience in the area. That’s why the qualified real estate litigation attorneys at the Dallas offices of Gagnon, Peacock & Vereeke, P.C., are here to help you through. Call a member of our legal team today at (214) 824-1414 for more information.

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