FAQs about Royalty Interests If your questions are not answered here, please call us for free advice at 1-888-285-3966. What is an oil and gas royalty interest? The royalty interest is a portion of the income from the production of the oil or gas well interest. The income is based on your percentage ownership of the well. You, as the royalty owner, are not responsible for any portion of the cost to operate the well. However, you may be obligated for other expenses such as ad valorem/property taxes, gathering charges, treatment expenses, and other charges as specified in the lease. What do you receive as a royalty owner? The payments you receive are based on your percentage interest in the production of the well. The check you receive reflects the volume of oil or gas produced that month, times your interest, less applicable charges. Price and volume produced will influence your payments. Why do my checks vary? Your checks vary depending on the volume of production in the month(s) for which you are being paid and on the price of oil and/or gas received by the owners (including you) in those months. The production volumes vary due to the number of days in a particular month, operational difficulties with the producing equipment, mechanical efficiencies, reservoir decline, etc. Product prices change daily due to fluctuations in the world financial markets. How do I transfer my interest to my heirs before I die? You should contact an attorney who can prepare proper conveyance documents. If you have any questions or if you would like to see a sample of a conveyance document, please contact us at 1-888-285-3966. I used to receive royalty income, but no longer do. How do I find out if anything is owed to me? First, contact the last company from whom you received checks. Ask them if they are still the purchaser of oil or gas from this well or lease, and if not, to whom did they transfer this particular lease. If you are not satisfied with the answer, you can try the Property Tax Office of the county in which your interest resides. Many states have property taxes and each county should have records of your ownership as well as operator's name and address. You could also check your most recent tax bill which may list the operator's name and address. Once you have the operator's name, contact them to see if the well or lease is producing and which purchaser you should contact about getting paid. If you noticed over time your checks becoming smaller before finally ceasing altogether, the lease probably depleted and production has ended. You may still own minerals under the tract, but with no production there will be no income. What is depletion and am I properly accounting for it on my tax return? Depletion is similar to depreciation. It is a way for taxpayers with an "economic interest" in a lease to recover the capital invested in the exploration for oil or gas. Under the current tax law, a royalty owner is considered to have an "economic interest" and therefore is entitled to depletion. There are two types of depletion: cost and percentage. Typically, a taxpayer entitled to depletion computes both cost and percentage depletion, and takes a deduction of the larger of the two. In order to verify the correctness of your return, you should contact a tax accountant with experience in oil and gas accounting. What other sources of information are there which I may use to evaluate my ownership? To get a history of the production volumes, look at your old check stubs or contact your purchaser for a revenue history. To evaluate a reservoir, you'll need to contact a Petroleum Engineer who is certified in the state where the reservoir resides. The National Council of Examiners for Engineering and Surveying can provide you with the address and telephone number for each State Board of Professional Engineers. You may reach the Council by phone at 1-800-250-3196 ext. 217. To evaluate the future potential of a lease, a list of Certified Petroleum Geologists may be obtained from the American Association of Petroleum Geologists - Division of Profession Affairs at 1-800 364-2274 (Ext. 613) or e-mail Norma Newby, Manager. Who is TAS Royalty Company? Find out more about our history as a family operated business with over 80 years experience in the oil and gas industry. If I respond to your offer to purchase my royalty interest(s), am I in any way obligated if I do not agree with the price offered or if I decide for any reason not to sell? Absolutely not. How do I get an offer for my royalty interest? TAS Royalty has a simple process we use to evaluate your interest and provide you with a prompt and fair offer.