National Association of Royalty Owners

The estimated million private owners of oil and gas mineral rights in the United States are an integral part of the domestic oil and gas industry. As the “landlords” of that industry, royalty owners play a critical first-step role in the development of their vital assets, through an oil and gas lease that assigns the right to drill and produce to an oil and gas operator. In return, they become stakeholders in a drilling venture which may, or may not, become profitable for all parties.

The rights and responsibilities of both parties are defined in the lease contract and by statute and by case law. Frequently, however, those rights are misunderstood by inexperienced owners or ignored and/or overlooked or disregarded by their industry partners.

As owners of a producing mineral interest entitled to a royalty share of revenue, we royalty owners claim the following rights to the principles of equity and fair play and in accordance with lease contracts and law; to-wit:

1. Good faith by all is fundamental to the lease negotiations and contract performance and payment process.

2. Royalty owners have the right to be paid according to all terms contained in their lease contract and by law.

3. Royalty owners have the right to access information possessed by the operator or payor in order to verify correct payment according to their contract or by law.

4. Royalty owners have the right to seek redress if good faith negotiations to correct violations of lease terms fail.

5. Royalty owners have the right to be heard in matters regarding oil and gas energy policy, proposed legislation or regulatory issues which would positively or adversely affect their interests.