Underpayment of
Royalties

Lawyer for Underpayment of Royalties in Dallas

Unfair Compensation for Oil & Gas Royalties

Royalty interest owners are at constant risk of risk for underpayment of royalties. While underpayment can be inadvertent, other times the underpayment is deliberate. In either situation, the royalty interest owner is often entitled to be compensated for the underpayment, along with other available damages.

Withholding Royalty Payments

Oil & gas companies may fraudulently withhold payments in a number of different ways, including:

  • Calculation of payments using an incorrect market price
  • Calculation of payments using incorrect volumes
  • Deduction of post-production costs, marketing fees, unsold fuel, and processing fees
  • Failure to pay royalties on gas that was used to power the company's equipment for gas extraction or other activities

Even if these items are not specified in a contract, the oil and gas company may still be held responsible for engaging in these practices.

Past Lawsuits for Underpayment of Royalties

There are many examples of large corporations who fail to pay proper royalties for oil & gas extraction:

  • Shell: In 2010, Shell was required to pay $66 million dollars for hiding the discovering of a large well.
  • QEP Energy Co.: In 2013, QEP Energy had to pay $115 million dollars to over 1,000 individuals for deducting production costs from royalty payments.

Currently, Chesapeake Energy Corp. is undergoing scrutiny from many Pennsylvania landowners, who claim that the company is underpaying royalty interest owners.

Contact Dunn Sheehan LLP!

If you believe that you are being underpaid your rightful royalties, contact our firm for a free case evaluation.

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