Your Texas mineral rights may bring in steady income through royalties, or payments based on oil or gas production. However, disputes with energy companies can affect your earnings and property rights. Questionable royalty deductions, unclear lease boundaries and broken lease terms can lead to financial losses. Knowing what causes these disputes can help you spot problems and understand your legal options.
Common mineral rights and royalty disputes
Not every royalty deduction violates your lease. Post-production costs include expenses for processing and moving oil or gas after extraction. Whether operators can deduct these costs depends on where and how your lease values royalties.
However, several issues can lead to mineral rights and royalty disputes:
- Improper deductions: Operators charge gathering or transportation costs that your lease does not permit.
- Boundary conflicts: Disagreements over property lines or lease coverage can affect drilling rights or royalty ownership. For example, two parties may disagree about which mineral tract a lease covers.
- Failure to meet operator duties: Companies break lease terms or fail to act as a reasonable operator would when developing the land, preventing drainage or selling oil and gas.
Your lease, royalty check stubs and division orders can help reveal payment errors or ownership disputes. Division orders show who receives royalties and each owner’s share.
How litigation can enforce mineral lease agreements
If an operator breaks your lease terms, a lawsuit may help enforce your rights. Depending on the case, available remedies may include unpaid royalties, compensation for losses or a court ruling that clarifies ownership or lease terms.
Under the Texas Natural Resources Code, you must send written notice by mail before suing for certain unpaid royalties. The company then has 30 days after receiving notice to pay or provide a written explanation for the nonpayment.
Litigation may also resolve boundary conflicts or enforce operator duties. In Texas, you generally have four years to sue for breach of contract. Each missed royalty payment may have its own deadline.
Understanding your options for resolving disputes
The right approach to a mineral rights dispute depends on your lease terms, the nature of the violation and the losses involved. A Texas mineral rights attorney can help clarify your rights, assess filing deadlines and explain whether negotiation or litigation may offer a suitable way to resolve the issue.