A practical guide to working with the companies that drill and produce your wells.
Get Your Free Mineral ValuationIf you own producing mineral rights, you have a business relationship with an operator. The operator is the oil and gas company responsible for drilling and producing the wells on your minerals. They manage day-to-day operations, maintain equipment, sell production, and distribute royalty payments to mineral owners.
Understanding how to communicate with your operator and what to expect from them can help you manage your mineral ownership more effectively. This guide covers the most common interactions mineral owners have with operators and how to handle them.
As a mineral owner, you'll receive various documents and notices from operators throughout your ownership:
Before drilling, operators or their landmen will offer to lease your minerals. This gives them the right to drill in exchange for a bonus payment and ongoing royalties.
After a well is drilled, you'll receive a division order confirming your ownership decimal and payment information. Learn more about division orders.
Monthly or quarterly statements showing production volumes, prices, deductions, and your royalty payment. Learn how to read your royalty statement.
If a well is temporarily shut in (not producing), operators typically notify mineral owners. Shut-in provisions in your lease determine whether the lease remains in effect during non-production.
Notices about combining your minerals with adjacent tracts into a drilling unit. Learn about pooling and unitization.
While most operator relationships run smoothly, mineral owners sometimes encounter challenges:
Late or missing payments: Royalty checks arriving late or not at all
Confusing statements: Royalty statements that are difficult to understand
Unresponsive departments: Difficulty reaching owner relations or revenue staff
Unexpected deductions: Costs subtracted from royalty checks
Operator changes: Confusion during acquisitions and transitions
Paperwork issues: Lost division orders or incorrect ownership records
Keep in mind: Operators manage thousands of mineral owner accounts. Most issues are administrative, not intentional. Patience and clear communication usually resolve problems.
When you need to reach your operator, here are the most effective approaches:
Check your royalty statement: Most statements include an owner relations phone number, mailing address, and sometimes an email address.
Search state records: Your state's oil and gas regulatory agency maintains operator contact information. Search by well name, API number, or operator name.
Use owner relations: Larger operators have dedicated owner relations departments for mineral owner inquiries. These are typically more responsive than general company lines.
Document everything: Keep records of all communications including dates, names of contacts, and outcomes. Written correspondence creates a paper trail.
Tip: When calling, have your owner number, decimal interest, and well name ready. This helps the representative locate your account quickly.
Many mineral owners are surprised to see deductions on their royalty checks. Here's what you need to know:
Transportation: Moving oil or gas from the wellhead to market
Gathering: Collecting production from multiple wells into pipelines
Processing: Removing impurities and separating natural gas liquids
Compression: Pressurizing gas for pipeline transport
Whether operators can take deductions depends on your lease language:
Cost-free royalty: Some leases specify royalties are calculated before deductions
At the well language: Royalties calculated at the wellhead typically allow proportionate deductions
Market value clauses: May affect how and where value is determined
Note: If you believe deductions are improper under your lease, consult with an oil and gas attorney who can review your specific lease language.
The oil and gas industry sees frequent acquisitions, mergers, and asset sales. If your operator changes, here's what to expect:
Your lease transfers: Lease obligations pass to the new operator automatically. Your terms remain the same.
New division orders may arrive: The new operator will likely send updated division orders to confirm payment information under their system.
Payment delays are common: Expect 1-3 months of delayed payments during transitions as accounts are transferred between companies.
Update your records: Keep notes on the new operator's name and contact information for future reference.
Watch for: Letters announcing operator changes should come from the selling company. Be cautious of unexpected communications claiming to be from new operators without prior notice.
If dealing with your operator has become a persistent hassle, you have options:
Document all communications
Escalate issues to supervisors
File complaints with state agencies if needed
Consult an oil and gas attorney
Receive lump sum payment
No more operator communications
Buyer inherits the relationship
Eliminate ongoing management
Some mineral owners find that the time and effort required to manage operator relationships isn't worth the monthly royalty income, especially for smaller interests. Selling converts future royalties into immediate cash and transfers all operator dealings to the new owner.
Get a free, no-obligation valuation of your mineral rights from our experienced team.
Request Your Free ValuationThe easiest way to find your operator's contact information is on your royalty statement. Look for the owner relations or revenue department phone number. You can also search your state's oil and gas regulatory agency database using the well name or API number to find operator contact details.
Operators may deduct post-production costs such as transportation, gathering, processing, and compression fees from your royalty payments. Whether these deductions are allowed depends on your lease language. Review your lease for provisions about cost-free royalties or deduction allowances. If you believe deductions are improper, contact the operator's revenue department with specific questions.
When an operator is acquired by another company, your lease transfers with the sale. The new operator assumes all obligations under your existing lease. You may receive a new division order to update payment information. Payment delays during the transition are common but should resolve within a few months.
Common reasons for missing royalty payments include: address changes the operator is unaware of, unsigned division orders, title issues being researched, minimum payment thresholds not being met, or funds held in suspense pending ownership verification. Contact your operator's revenue department to inquire about your specific situation.
Mineral owners cannot choose their operators. The operator is the company that holds the lease rights and operates the wells. However, operators frequently change through acquisitions, mergers, and asset sales. When you sell your mineral rights, the buyer inherits the existing operator relationship and lease terms.
Disclaimer: This information is for educational purposes only and should not be considered legal or financial advice. Operator relationships and lease terms vary. Consult with a qualified attorney for specific questions about your rights and obligations as a mineral owner.