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Texas Mineral Owners Sue Marathon Oil

by Elizabeth Alford on August 19, 2016

One Texas couple is having to sue Marathon Oil to obtain information about drilling activity on their property.

Related: Mineral Owners Race the Clock in Texas

John and Kelly Foster from Karnes County, exemplify how hard mineral owners sometimes have to fight to make sure their royalty payments are correct. Though mineral owners receive monthly statements from their operators, they aren’t always clear and sometimes a problem may not be obvious until it is too late.

This is especially true in Texas, where if an owner waits too long, they may lose their right for compensation. Texas case law has laid a heavy burden on mineral owners to make sure energy companies pay what is owed. The Texas Supreme Court ruled in 2012 that owners are required to do their own exhaustive research to find out if payments are correct. Owners then have a four year time limit to request an audit if they suspect a problem.

The Fosters filed suit on Wednesday in order to obtain records from Marathon Oil that details the activity from their 613 acres in production. The family’s attorney said the couple is currently not seeking damages, but that a lawsuit was the only way to obtain information about how their royalty payments were calculated.

“Not all companies are willing to share information, and not all leases have an audit provision that allows royalty owners to see the books that show how their royalties were calculated.” – Attorney John McFarland

The Fosters’ land have produced nearly 600,000 barrels of oil condensate and more than 4.2 billion cubic feet of natural gas over the past five years according to records by the The Texas Railroad Commission.

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