Why Operators Stop Paying and What You Can Do
Missing royalty payments? There are many reasons operators stop paying—and most can be resolved. Here's what to do.
Don't panic—there are usually fixable reasons why payments stop.
When royalty checks suddenly stop arriving, it's natural to worry. But in most cases, the cause is administrative, not fraudulent. Your money is often sitting in a "suspense account" waiting for an issue to be resolved.
Understanding the common causes helps you take action to get your payments flowing again.
Royalties held in suspense still belong to you. Once the issue is resolved, you typically receive all back payments with interest (in states that require it).
Cause: You moved and didn't notify the operator. Checks are returned as undeliverable.
Fix: Contact the operator's owner relations department with your updated address. Request reissue of returned checks.
Cause: You didn't return a signed division order, so they can't legally pay you.
Fix: Contact the operator and request a new division order. Review it carefully and return it signed.
Cause: The operator found problems in your ownership chain—missing probate, unclear deeds, competing claims.
Fix: Ask specifically what title issue exists. You may need to provide death certificates, probate documents, or affidavits of heirship.
Cause: A death occurred, ownership transferred, or the operator needs updated records.
Fix: Provide documentation of the ownership change—deed, probate order, or transfer documents.
Cause: The well's production dropped below the minimum payment threshold (often $25-$100).
Fix: Contact operator to confirm. Payments may accumulate until they reach the threshold, then you'll receive a larger check.
Cause: The well was temporarily shut in due to low prices, maintenance, or mechanical issues.
Fix: Ask the operator about the well's status. If shut-in, ask when they expect to resume production.
Cause: The well was sold to a new operator. There's often a transition period with no payments.
Fix: Find out who the new operator is. You'll likely need to sign a new division order with them.
Cause: The well reached end of life and was permanently plugged and abandoned.
Fix: Unfortunately, no more royalties from that well. Check if you have other wells on your minerals or potential for new drilling.
When operators can't pay you for some reason, your royalties go into a "suspense account." This is a holding account where your money accumulates until the issue is resolved.
The money is still yours—it's not lost or forfeited
Interest may accrue—Texas and some other states require interest on suspended royalties
You can resolve most issues—operators want to pay you and close suspense accounts
Time limits exist—after years of suspense, money may escheat to the state
If royalties sit in suspense too long (usually 3-7 years depending on state), they may be turned over to the state as unclaimed property. Act promptly.
Find your most recent royalty check stub or statement. It should show the operator's name and contact information. If you don't have this, search the state oil and gas commission's database by your property location.
Call or email the operator's owner relations or revenue department. Have ready: your owner number (if known), property description, and SSN for verification. Ask specifically why payments stopped.
Request written explanation of the issue. Ask what documentation they need to resolve it. Get names of people you speak with and follow up in writing to create a paper trail.
Submit whatever documentation they request: updated address forms, signed division orders, death certificates, probate documents, or affidavits of heirship. Keep copies of everything you send.
If you don't receive resolution within 30-60 days, follow up. Large operators process many requests, and yours may need a nudge. Be persistent but professional.
If you can't resolve issues directly with the operator, these state agencies can help:
If you're dealing with ongoing payment issues, selling your minerals eliminates the hassle entirely. Consider selling if:
Title issues are complex and expensive to resolve
Multiple heirs make administration difficult
Royalty amounts are too small to justify the effort
You're tired of dealing with operators
You'd prefer a lump sum over ongoing payments
Production is declining anyway
Benefit of selling: The buyer takes on all the administrative burden. They handle title issues, operator relationships, and payment collection. You receive a clean lump sum and move on.
There's no set limit, but after several years (typically 3-7 depending on state), unclaimed royalties must be turned over to the state as unclaimed property. Once that happens, you have to claim from the state instead of the operator—a more complicated process.
It depends on your lease language and state law. Some leases allow deduction of post-production costs (gathering, transportation, processing). Others don't. Review your lease's royalty clause. If you believe improper deductions are being taken, consult an oil and gas attorney.
Royalties owed to you may be considered trust funds that can't be used to pay other creditors—this varies by state. The wells will likely be sold to a new operator who will assume royalty obligations going forward. Past royalties in suspense may be harder to collect. Consult an attorney if significant amounts are involved.
For routine issues (address change, missing division order), you can usually resolve it yourself. For complex title issues, significant amounts in suspense, or disputes about underpayment, an oil and gas attorney may be worthwhile. Many offer free consultations, and some work on contingency for royalty recovery.
Selling eliminates the hassle of dealing with operators
If ongoing payment issues are frustrating you, consider selling your minerals for a lump sum. Buckhead Energy handles all the administrative complexity—you just receive your check.
Disclaimer: This information is provided for educational purposes only and does not constitute legal advice. If you have significant royalties in suspense or disputes with operators, consult with an oil and gas attorney in your state.