Colorado Royalty Payment Law: Deadlines, Interest and Owner Remedies

Colorado royalty payment rules at a glance

Main statute: C.R.S. § 34-60-118.5 (payment of proceeds).

First payment deadline

Unless a valid lease or other agreement provides otherwise, the payer must begin paying proceeds no later than six months after the end of the month in which production is first sold.

A 'payee' under the section does not include interests owned by the State of Colorado. (C.R.S. § 34-60-118.5(1)(a))

Statute text “"Payee" means any person or persons legally entitled to payment from proceeds derived from the sale of oil, gas, or associated products from a well in Colorado, but shall not include those interests owned by the state of Colorado.”

Payments of proceeds must commence no later than six months after the end of the month in which production is first sold. (C.R.S. § 34-60-118.5(2)(a))

Statute text “payments of proceeds derived from the sale of oil, gas, or associated products shall be paid by a payer to a payee commencing not later than six months after the end of the month in which production is first sold.”

The payer and payee may agree, in a valid lease or other agreement, to payment terms that differ from the statutory schedule. (C.R.S. § 34-60-118.5(2)(b))

Statute text “The payer and payee may provide, in a valid lease or other agreement, for terms or arrangements for payment that differ from those set forth in paragraph (a) of this subsection (2).”

The payer is the first purchaser, unless the first purchaser has an agreement under which the well operator accepted responsibility for paying payees, in which case the operator is the payer. (C.R.S. § 34-60-118.5(1)(b))

Statute text “"Payer" means the first purchaser of oil, gas, or associated products from a well in Colorado unless the first purchaser has entered into an agreement under which the operator of a well has accepted responsibility for making payments to payees, in which case such operator shall be the payer.”

Later payments

Unless a valid lease or other agreement provides otherwise (C.R.S. § 34-60-118.5(2)(b)), after the first payment, payments are monthly: no later than 60 days for oil and 90 days for gas and associated products after the end of the calendar month in which the production is sold.

Later payments are made monthly, no later than 60 days (oil) or 90 days (gas and associated products) after the end of the calendar month of sale. (C.R.S. § 34-60-118.5(2)(a))

Statute text “Thereafter, such payments shall be made on a monthly basis not later than sixty days for oil and ninety days for gas and associated products following the end of the calendar month in which subsequent production is sold.”

Minimum payment and aggregation

Unless a valid lease or other agreement provides otherwise (C.R.S. § 34-60-118.5(2)(b)), payments may be made annually when the total due a payee for twelve consecutive months is $100 or less.

Annual payment is permitted if the aggregate due a payee for twelve consecutive months is $100 or less. (C.R.S. § 34-60-118.5(2)(a))

Statute text “Payments may be made annually if the aggregate sum due a payee for twelve consecutive months is one hundred dollars or less.”

Interest on late payments

If payment is late and the delay was not caused by a statutory suspense reason, the payer owes simple interest from the date of each sale at twice the Federal Reserve Bank of Kansas City discount rate in effect on the first day of each calendar year in which proceeds were withheld.

Late payment not excused by a subsection (3) reason bears simple interest calculated from the date of each sale, at two times the Federal Reserve Bank of Kansas City discount rate as of the first day of the calendar year(s) in which proceeds were withheld. (C.R.S. § 34-60-118.5(4))

Statute text “the payer shall pay such payee simple interest on the amount of the proceeds withheld, which interest shall be calculated from the date of each sale at a rate equal to two times the discount rate at the federal reserve bank of Kansas City as such rate existed on the first day of the calendar year or years in which proceeds were withheld.”

Suspense and withheld payments

The payment deadlines are suspended while payment is withheld because the payee has not confirmed its fractional interest in writing after a reasonable written request, because of reasonable doubt about the payee's identity, whereabouts or clear title, or because of litigation affecting distribution. Statutory interest applies only to delays not caused by those reasons. A dispute about one payee does not delay payments to others.

Deadlines are suspended when payment is withheld for failure or delay by the payee to confirm its fractional interest in writing after a reasonable written request. (C.R.S. § 34-60-118.5(3)(a)(I))

Statute text “A failure or delay by the payee to confirm in writing the payee's fractional interest in the proceeds after a reasonable request in writing by the payer for such confirmation”

Deadlines are also suspended for reasonable doubt about the payee's identity, whereabouts, or clear title, or for litigation affecting distribution. (C.R.S. § 34-60-118.5(3)(a)(II)-(III))

Statute text “A reasonable doubt by the payer as to the payee's identity, whereabouts, or clear title to an interest in proceeds; or (III) Litigation that would affect the distribution of payments to a payee.”

A delay in deciding one payee's entitlement does not affect payments to other payees. (C.R.S. § 34-60-118.5(3)(b))

Statute text “Any delay in determining whether or not a payee is entitled to an interest in proceeds shall not affect payments to all other payees so entitled.”

The statutory interest applies only where the delay was not caused by one of the subsection (3) reasons; the section does not provide interest on proceeds withheld for those reasons. (C.R.S. § 34-60-118.5(4))

Statute text “If a payer does not make payment within the time frames specified in subsection (2) of this section and such delay in payment was not caused by any of the reasons specified in subsection (3) of this section”

Division orders

No general division-order statute was found: nothing on when a payor may require one, what it may contain or the effect of signing. The only provision found is in the unitization section, C.R.S. § 34-60-118(11): an order providing for unit operations does not terminate an existing division order, which stays in force for production allocated to the tract until terminated under its own terms. The payment statute lets the payer request written confirmation of the payee's fractional interest; that is covered under suspense.

A unit-operations order does not terminate a division order for a separately owned tract; the division order remains in force for oil and gas allocated to the tract until terminated under its own provisions. (C.R.S. § 34-60-118(11))

Statute text “(11) No division order or other contract relating to the sale or purchase of production from a separately owned tract shall be terminated by the order providing for unit operations, but shall remain in force and apply to oil and gas allocated to such tract until terminated in accordance with the provisions thereof.”

Owner remedies, notice and attorney fees

Before seeking relief under C.R.S. § 34-60-118.5 for late payment, the payee must send the payer written notice by certified mail (the section states that it does not alter existing substantive rights or obligations); the payer then has 20 days to pay with interest or explain the nonpayment in writing. Absent a bona fide dispute over contract interpretation, the Energy and Carbon Management Commission can determine the due date, whether a delay was justified, and the amount owed with interest; if such a dispute exists the commission declines jurisdiction and the parties may go to district court. The commission may assign costs and award reasonable attorney fees and costs to the prevailing party.

A payee must give the payer written notice by certified mail of the failure to pay; the payer then has 20 days after receipt to pay proceeds plus interest or respond in writing explaining the nonpayment. (C.R.S. § 34-60-118.5(7))

Statute text “As a prerequisite to seeking relief under this section for the failure of a payer to make timely payment, a payee shall give the payer written notice by certified mail of such failure and the payer shall have twenty days after receipt of the required notice in which to pay the proceeds, plus any interest due thereon”

Absent a bona fide contract-interpretation dispute, the commission has jurisdiction to determine the due date, whether a justified delay occurred, and the amount of proceeds plus interest due. (C.R.S. § 34-60-118.5(5))

Statute text “Absent a bona fide dispute over the interpretation of a contract for payment, the commission has jurisdiction to determine the following:”

If the commission finds a bona fide dispute over interpretation of the contract, it declines jurisdiction and the parties may seek resolution in district court. (C.R.S. § 34-60-118.5(5.5))

Statute text “If the commission finds that such a dispute exists, the commission shall decline jurisdiction over the dispute and the parties may seek resolution of the matter in district court.”

The commission may assign administrative costs among the parties and may award reasonable attorney fees and costs to the prevailing party. (C.R.S. § 34-60-118.5(6))

Statute text “The commission may assign to the parties the costs of any administrative proceeding pursuant to this section in such proportions as it deems appropriate and may award reasonable attorney fees and costs to the prevailing party.”

The section does not alter existing substantive rights or obligations or require the commission to interpret the underlying contract. (C.R.S. § 34-60-118.5(8)(a))

Statute text “Nothing in this section shall be construed to alter existing substantive rights or obligations nor to impose upon the commission any duty to interpret a contract from which the obligation to pay proceeds arises.”

Check-stub disclosures

Every payment must be accompanied by information identifying the lease, property, unit or well; the month and year of sale; total quantity sold with units; price per unit; severance and other production taxes; the payee's decimal interest to at least six places; the payee's share before and after deductions or adjustments; and an address and telephone number for questions. On a certified-mail request the payer must explain, within 60 days, deductions or adjustments within its control. A payer that fails to provide this information is subject to commission penalties.

Every payment must be accompanied by minimum information, regardless of other agreed terms. (C.R.S. § 34-60-118.5(2.3))

Statute text “Notwithstanding any other applicable terms or arrangements, every payment of proceeds derived from the sale of oil, gas, or associated products shall be accompanied by information that includes, at a minimum:”

Required items include identification of the lease, property, unit or well(s), and the month and year of the sale. (C.R.S. § 34-60-118.5(2.3)(a)-(b))

Statute text “(a) A name, number, or combination of name and number that identifies the lease, property, unit, or well or wells for which payment is being made; (b) The month and year during which the sale occurred for which payment is being made;”

Required items include total quantity sold with units of measurement, and the price received per unit (per barrel for oil; per MCF or MMBTU for gas). (C.R.S. § 34-60-118.5(2.3)(c)-(d))

Statute text “(c) The total quantity of product sold attributable to such payment, including the units of measurement for the sale of such product; (d) The price received per unit of measurement, which shall be the price per barrel in the case of oil”

Required items include total severance and other production taxes, and the payee's interest as a decimal to at least six places. (C.R.S. § 34-60-118.5(2.3)(e)-(f))

Statute text “(e) The total amount of severance taxes and any other production taxes or levies applied to the sale; (f) The payee's interest in the sale, expressed as a decimal and calculated to at least the sixth decimal place;”

Required items include the payee's share before and after deductions or adjustments, and an address and telephone number for questions. (C.R.S. § 34-60-118.5(2.3)(g)-(i))

Statute text “(g) The payee's share of the sale before any deductions or adjustments made by the payer or identified with the payment; (h) The payee's share of the sale after any deductions or adjustments made by the payer or identified with the payment; (i) An address and telephone number from which additional information may be obtained and questions answered.”

On a written request sent by certified mail, the payer must provide within 60 days a written explanation of deductions or adjustments within its control and, if requested, meter calibration testing and production reporting records it must keep. (C.R.S. § 34-60-118.5(2.5))

Statute text “Upon written request by the payee, submitted to the payer by certified mail, the payer shall provide to the payee within sixty days a written explanation of those deductions or adjustments over which the payer has control and for which the payer has information”

A payer that fails to provide the required or requested information is subject to penalties under C.R.S. § 34-60-121. (C.R.S. § 34-60-118.5(2.7))

Statute text “A payer who fails to provide information required or requested in accordance with subsection (2.3) or (2.5) of this section shall be subject to penalties as provided in section 34-60-121.”

Unclaimed royalties (escheat)

Colorado's Revised Uniform Unclaimed Property Act defines mineral proceeds (including royalties, overriding royalties and net revenue interests) as property under the act. Section 38-13-201 lists no separate period for mineral proceeds; the catch-all period for property not otherwise specified is three years after the owner first has a right to demand it or the obligation to pay arises (a debt of a business association is also three years). Unclaimed property is held by the State Treasury's Great Colorado Payback program.

Mineral proceeds are defined to include amounts payable for extraction, production, or sale of minerals, including net revenue interests, royalties, overriding royalties, extraction payments and production payments. (C.R.S. § 38-13-102(16))

Statute text “For the extraction, production, or sale of minerals, including a net revenue interest, royalty, overriding royalty, extraction payment, and production payment”

Property not specified elsewhere in the abandonment sections is presumed abandoned at the earlier of three years after the owner first has a right to demand it or the obligation to pay or distribute arises. (C.R.S. § 38-13-201(1)(m))

Statute text “All other property not specified in this section or sections 38-13-202 to 38-13-208 and 38-13-213 to 38-13-220, the earlier of three years after the owner first has a right to demand the property or the obligation to pay or distribute the property arises.”

A debt of a business association is presumed abandoned three years after the obligation to pay arises. (C.R.S. § 38-13-201(1)(d))

Statute text “A debt of a business association, three years after the obligation to pay arises”

The Colorado State Treasury administers unclaimed property through the Great Colorado Payback program. (Colorado State Treasury, Unclaimed Property page)

Statute text “Through the Great Colorado Payback program, the Treasury safeguards unclaimed property and works to reconnect people, businesses, towns, and other organizations with what’s rightfully theirs.”

Official unclaimed property search: Great Colorado Payback (Colorado State Treasury).

Scope notes

• The statutory deadlines can be varied by a valid lease or other agreement, but the payment-statement requirements apply notwithstanding other terms (C.R.S. § 34-60-118.5).
• Colorado's unclaimed property act sets no separate period for mineral proceeds; the 3-year period shown is its catch-all.

Sources

Last reviewed November 2, 2026.

• Colorado Revised Statutes 2024, Title 34 (Mineral Resources), uncertified printout; includes C.R.S. 34-60-118.5. No 2025 edition of this PDF was published at the legislature's crs2025 URL pattern on 2026-11-02 (404). — Colorado Office of Legislative Legal Services, fetched November 2, 2026
• Colorado Revised Statutes 2025, Title 34, Article 60 (Energy and Carbon Management Act), as posted by the Energy and Carbon Management Commission (regulator's copy of the 2025 CRS text; curl returned 403, fetched via Firecrawl PDF parser) — Colorado Energy and Carbon Management Commission, fetched November 2, 2026
• Colorado Revised Statutes 2024, Title 38 (Property - Real and Personal), uncertified printout; includes Article 13, Revised Uniform Unclaimed Property Act — Colorado Office of Legislative Legal Services, fetched November 2, 2026
• Unclaimed Property (Great Colorado Payback), Colorado State Treasury — Colorado State Treasury, fetched November 2, 2026

Related guides

• Royalty payment law by state (comparison of the covered states)
• Colorado mineral rights
• Suspended royalties: why you are not getting paid
• Division orders explained
• How to read a royalty statement
• Unclaimed mineral royalties

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