You've been receiving royalty checks from the same operator for years. Then one month, the check doesn't come. Or it comes from a company you've never heard of, with a different owner number, and maybe a different amount. Nobody sent you a letter explaining what happened.

This is more common than it should be, and it's usually an operator change.

Why Operators Change

Oil and gas properties are bought and sold regularly. An operator might sell a group of wells to another company as part of a business strategy, a bankruptcy, or a portfolio adjustment. When that happens, the new operator takes over responsibility for production, compliance, and royalty payments.

In theory, the new operator should notify all royalty owners of the change, issue new division orders, and continue payments without interruption. In Texas, the Railroad Commission requires that when a company making royalty payments changes, the new payor must notify owners in writing with the property name, effective date, and their contact information. In practice, the transition is sometimes messy, especially for small-interest owners who may not be a priority.

Signs of an Operator Change

What to Do

Check the state oil and gas commission. Search for your wells by API number, well name, or legal description. The commission's records will show the current operator of record. If the operator changed, it will be reflected there.

Contact the new operator. Once you identify who took over, call their owner relations department. Provide your old owner number and the property or well information. Ask them to confirm your decimal interest and update your mailing address.

Sign the new division order (after reviewing it). The new operator will likely send a division order. Review it carefully to make sure your decimal interest is correct. Don't just sign it and assume the numbers carried over correctly from the old operator.

Check for held payments. If there was a gap between operators, payments from the transition period may be held in suspense. Ask the new operator whether there are any suspended funds in your name. Verify that the first operator paid you through the transition date and that the new operator started paying you for the following month.

Contact the old operator if needed. If you're owed payments from before the transfer, the old operator may still be responsible for those. Some purchase agreements require the new operator to assume all payment obligations, but not always. If payments are late, you can notify the operator in writing and they must respond within 30 days with payment or a written explanation.

Check for Unclaimed Property

If an operator changed hands and couldn't find you, your royalty payments may have been sent to the state's unclaimed property fund. Search by your name and by the names of any deceased family members who may have been the original payee. See our post on unclaimed royalty payments for links to every state's search tool.

Prevent This From Happening Again

The mineral world is full of acquisitions, mergers, and asset transfers. Properties change hands. Companies rename themselves. The best defense is keeping your records current and paying attention to your mail.

MinRight stores the operator name and contact information for each well. When an operator changes, update the record and note the date. If payments go missing during the transition, you'll know exactly when the gap started. If payments end up unclaimed because the new operator couldn't find you, having your records in order makes the recovery process faster.

When the new operator sends a division order, compare the decimal interest to what you had on file with the previous operator. If something looks off, ask before you sign.