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Common Evidentiary and Damage Issues

Mart Tisdal, Oil and Gas Royalties on Non-Federal Lands (1993)

The most prevalent claim of the royalty owner, however, is that he has been improperly paid, or not paid at all, his share of royalties due on everything from oil, gas, condensate, flash gas, sulphur and liquefiable hydrocarbons to take or pay related settlements. The immediate problem is that the documents required to prove such claims are not within the control of the royalty owner. Generally speaking, the royalty owner may have in his possession an incomplete set of check details, a division order or two, and an unsigned copy of an oil and gas lease. Acquiring the necessary documents to begin to prove the case is paramount.

After acquiring documents, such as they are, from the royalty owner, counsel should seek out other sources of information. Dwight's Energydata is one source of information, and we have that capacity in our office. Data may also be obtained from Petroleum Information, a service similar to Dwight's. These reports, however, while containing relevant information concerning volumes produced, do not contain information relating to value. This we have to obtain elsewhere.

In Oklahoma, the first purchaser reports its volumes and values for each well to the Oklahoma Tax Commission. Occasionally, these reports will also contain some evidence of take or pay related settlements which the purchaser felt compelled to report. A production summary may b