Mineral Royalty Mispayments: A Discussion of Common Mispayment Scenarios and Applicable Law

Recording of a 90-minute CLE webinar with Q&A

Conducted on Thursday, November 21, 2013

Recorded event now available

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Program Materials

This CLE webinar will provide counsel with a review of the common pitfalls involved in oil and gas royalty mispayment cases, including a discussion of various mispayment examples and applicable statutory and case law.

Description

Billions of dollars in oil and gas royalties are paid out each year, involving a number of different parties and entities. Over- and under- payment disputes frequently arise and often result in litigation between payors and payees.

Oil and gas royalty payments—and disputes—will continue to increase in coming years. Counsel must understand the many challenges involved in royalty payments and be prepared to resolve disputes and understand the law that governs such cases.

Listen as our authoritative panel examines common oil and gas royalty mispayment scenarios and how those scenarios are often resolved in light of applicable law. The panel will offer best practices for resolving and, if needed, litigating royalty disputes. This presentation will touch on law from various jurisdictions, but will primarily discuss authority pertinent to Texas and Oklahoma. (Note: any opinions expressed in this program's materials are those of the authors only)

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Outline

  1. Introduction
    1. Common mispayment scenarios
      1. Case study #1: Overpayment and underpayment following unit formation
  2. Resolving royalty underpayments
    1. Effect of signed division orders
    2. Review of pertinent authority
      1. Case study #2: The Gavenda case
    3. The underpaid payee’s options
      1. Case study #3: XTO v. Pennebaker
      2. Case study #4: Shell Oil Co. v. Ross
    4. TX and OK statutory highlights
  3. Recoupment of mineral royalty overpayments
    1. Common overpayment scenarios
      1. Case study #5: Unique contractual provision leads to overpayment
    2. The typical affirmative recoupment action: Money had and received
    3. Case study #6: The Castle case—underpayment due to mistake in title opinion
    4. Case study #7: Overpayments due to a “mistake of fact”
  4. A payor’s right to exercise recoupment
    1. Case study #8: The Waechter case—withholding future royalties to recoup
    2. Case study #9: The Bright case—self-help recoupment goes wrong
    3. Case study #10: Nelson v. Linn Mid. Expl.—recoupment in Oklahoma
  5. Conclusion/key takeaways

Benefits

The panel will review these and other key questions:

  • What are the payor’s options if an overpayment has occurred?
  • What are the benefits of having signed division orders?
  • What is the pertinent law governing these matters?

Following the speaker presentations, you'll have an opportunity to get answers to your specific questions during the interactive Q&A.

Faculty

Douglas Hafer
Douglas Hafer
Partner
Curnutt & Hafer

Mr. Hafer’s practice focuses on litigation, including oil and gas, business, insurance, and franchise. He has...  |  Read More

Daniel B. Mathis
Daniel B. Mathis
Senior Attorney
Devon Energy

Mr. Mathis provides operational, transactional and pre-litigation counsel to Devon’s Onshore Exploration and...  |  Read More

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