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15-74-604. Failure to pay royalties.
Arkansas Code — all titles (historical 2020) · legal_authorities
15-74-604. Failure to pay royalties.
(a) An obligation arises under an oil and gas lease to pay or to deliver oil or gas royalties to the mineral owner or his or her assignee or to deliver oil or gas to a purchaser to the credit of the mineral owner or his or her assignee, and willful breach by the owner of the right to drill and produce of the obligation may authorize, among other relief, cancellation of the lease where determined, by the court, that the equities of the case warrant cancellation.
(b) In the event the operator under an oil or gas lease fails to pay oil or gas royalties to the mineral owner or his or her assignee within one hundred eighty (180) days after oil or gas produced under the lease is marketed, the unpaid royalties shall bear interest thereafter at the rate of twelve percent (12%) per annum until paid. Provided, that the operator may remit annually to a person entitled to royalties the aggregate of up to twelve (12) months of monthly royalties where the aggregate amount owed is one hundred dollars ($100) or less. This subchapter shall not apply when mineral owners or their assignees elect to take their proportionate share of production in kind or in the event of unmarketability of title which would affect substantially the making of the royalty payments.
(c) A prior first lien is created to the extent of any unpaid royalty, together with any interest or penalty thereon, granted or reserved in any valid instrument to secure the owner of the royalty interest, his or her heirs, devisees, successors, or assigns.
(d) When payment has not been made upon any natural gas production within the time limits specified in § 15-74-601, the first purchaser shall, upon suit being filed, suspend all royalty payments the subject of the litigation due unde
Source: Arkansas Code — historical release 78 (November 6, 2020) · 15-74-604
Stored review status: Historical 2020-11-06 source release; later amendments not reconciled; machine-extracted, not independently legally reviewed; source heading status: text_in_historical_source. A text match is a research starting point; applicability is not established.
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Stable record: arkansas_code:legal_authorities:15-74-604
Source file: gov.ar.code.title.15.odt
Pages: Not recorded – Not recorded
Passage SHA-256: 82306fb057236a024f72479d8e5c43d5801c031313b5ffddbd9ba6b41928792d
Source location: content.xml paragraph 25614
Stored source content
15-74-604. Failure to pay royalties.
(a) An obligation arises under an oil and gas lease to pay or to deliver oil or gas royalties to the mineral owner or his or her assignee or to deliver oil or gas to a purchaser to the credit of the mineral owner or his or her assignee, and willful breach by the owner of the right to drill and produce of the obligation may authorize, among other relief, cancellation of the lease where determined, by the court, that the equities of the case warrant cancellation.
(b) In the event the operator under an oil or gas lease fails to pay oil or gas royalties to the mineral owner or his or her assignee within one hundred eighty (180) days after oil or gas produced under the lease is marketed, the unpaid royalties shall bear interest thereafter at the rate of twelve percent (12%) per annum until paid. Provided, that the operator may remit annually to a person entitled to royalties the aggregate of up to twelve (12) months of monthly royalties where the aggregate amount owed is one hundred dollars ($100) or less. This subchapter shall not apply when mineral owners or their assignees elect to take their proportionate share of production in kind or in the event of unmarketability of title which would affect substantially the making of the royalty payments.
(c) A prior first lien is created to the extent of any unpaid royalty, together with any interest or penalty thereon, granted or reserved in any valid instrument to secure the owner of the royalty interest, his or her heirs, devisees, successors, or assigns.
(d) When payment has not been made upon any natural gas production within the time limits specified in § 15-74-601, the first purchaser shall, upon suit being filed, suspend all royalty payments the subject of the litigation due under the lease interest to the owner of the right to drill and produce, provided that the first purchaser is made a party to the suit, and thereafter shall pay the amounts due all such royalty interests, as the amounts become due, into the registry of the court in which the suit is pending and the first purchaser shall be relieved of all further burdens or obligations therefor.
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Arkansas Code — all titles (historical 2020) · legal_authorities
15-74-601. Time limits governing oil and gas payments — Definition.
(a) The proceeds derived from the sale of oil or gas production from any oil or gas well shall be paid to persons legally entitled thereto, commencing no later than six (6) months after the date of first sale and thereafter no later than sixty (60) days after the end of the calendar month within which subsequent production is sold or as provided for under subdivision (b)(2) of this section.
(b)(1) The payment of proceeds under subsection (a) of this section is to be made to persons entitled thereto by the first purchasers of the production.
(2) The payment may be made annually for the aggregate of up to twelve (12) months of accumulation of proceeds if the aggregate amount owed is at least ten dollars ($10.00), but less than one hundred fifty dollars ($150), provided, upon written request by the royalty owner, the payment shall be made when the aggregate amount exceeds fifty dollars ($50.00). Accumulated amounts of less than ten dollars ($10.00) may be held but shall be paid when production ceases or by the payor of the payment upon relinquishing responsibility.
(c) As used in this subchapter, “first purchaser” means the first commercial purchaser after completion of the well and shall not include purchasers of oil or gas during initial testing prior to completion.
(d) Any delay in determining the persons legally entitled to an interest in the proceeds from production caused by unmarketable title to the interest shall not affect payments to persons whose title is marketable.
(e) When payment has not been made within the time limits specified in this subchapter, the first purchaser shall pay interest to those legally entitled to the withheld proceeds commencing on the payment due date at the
Source: Arkansas Code — historical release 78 (November 6, 2020) · 15-74-601
Stored review status: Historical 2020-11-06 source release; later amendments not reconciled; machine-extracted, not independently legally reviewed; source heading status: text_in_historical_source. The source passage cites 15-74-601. This identifies an authority to review, not proof of applicability.