Division Orders & Post Lease Requirements – Once production of oil & gas has commenced, the division order specifies the proportion of the proceeds that the royalty owner is entitled to receive. In most cases, the operator will make this determination based on the title work that he has done. The royalty owner will be able to verify that he is receiving the correct royalty payment based on the terms specified in the lease by learning exactly how royalty interests are calculated. Both division orders and transfer orders will be reviewed.
Payment Review & Production Verification – Payor statements, production data reports, and other information will be reviewed to ensure that mineral owners are receiving correct royalty payments. We will examine several alternatives to gather and collect information from production payments to examine readily available reports on various wells and mineral properties.
Eminent Domain & Pipelines – Every oil and gas well must have a distribution outlet to get the product from the wellhead to the marketplace, including pipelines, rail, and truck routes. The locations of these distribution systems can be controversial and disruptive to the royalty owner unless they are planned for in advance. We will discuss who decides on the locations of pipelines and truck routes, eminent domain and condemnation proceedings, pooling agreements, and how best to avoid disputes and legal proceedings.
Accounting & Taxation – Royalty owners must be aware of the importance of having a personal accounting system that provides the records necessary for preparing tax returns and paying taxes that are due on royalty income. These record-keeping systems will make your CPA’s life easier, save you time and money, and prepare you to deal with the taxes that are due on royalty income, including federal income taxes, and property taxes. What should be reviewed when you receive your Ad Valorem tax statement regarding your minerals. You will learn what to do to insure that you are receiving the production payments you should receive.
Estate Planning – Most large royalty owners should engage in estate planning to make sure that their mineral interests are protected and passed on to their heirs in accordance with their wishes. Inheritance taxes can take a significant portion of the value of an estate if proper planning is not done in advance. These laws and regulations are complex and confusing to the typical royalty owner. We will consider wills, trusts, LLC’s, LP’s, gifting, and conveyance to heirs in advance of death.