One couple from Karnes County exemplify how hard mineral owners have to fight to make sure their royalty payments are correct.
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John and Kelly Foster filed suit on Wednesday in order to obtain records from Marathon Oil that details the activity from their 613 acres in production. The family’s attorney said the couple is currently not seeking damages, but that a lawsuit was the only way to obtain information about how their royalty payments were calculated.
Texas has laid a heavy burden on mineral owners to make sure energy companies pay what is owed. In 2012, the Texas Supreme Court issued a decision in Shell v Ross that requires owners to do their own exhaustive audits to find out if payments are correct. If an owner suspects a problem, they have a four year time limit to request an audit. While this seems like it should be plenty of time, it isn’t always clear what operators are doing and sometimes a problem may not be obvious until it is too late.
“Not all companies are willing to share information, and not all leases have an audit provision that allows royalty owners to see the books that show how their royalties were calculated.”
Karnes county is the most prolific space in the Eagle Ford and across Texas, currently running eight rigs in their county . The Texas Railroad Commission records show that wells on the Fosters’ land have produced nearly 600,000 barrels of oil condensate and more than 4.2 billion cubic feet of natural gas over the past five years.