Legal Question in Real Estate Law in California

Re: Payment of Oil and Gas Royalties

You seem to misunderstand what a "statute of limitations" is.

It doesn't tell a business, or anyone, how promptly it must perform an act.

It tells a prospective litigant how long it can wait before filing a lawsuit. In other words, a statute of limitations doesn't require anyone to do anything, ever. It simply says that if you're ever going to file a suit, you must act within a certain time frame.

For example, a lawsuit for damages for breach of an oral contract must be brought within two years of the alleged breach, if ever.

To address your underlying question more directly, I'd say that the payment of oil and gas royalties is a matter of private contract; whoever gave the drilling concession in the first place presumably had an arms-length negotiation with the operator and the parties signed a royalty agreement that would contain clauses covering calculation of royalties and setting up payment intervals.

After skimming the Civil Code and more than 30 reported decisions on the amount and timing of oil and gas royalty payments in California, I did not note a single suggestion that there is any statute or principle of law that would impair the right of the contracting parties to set a time for payment of royalties as a matter of private contract. There seems to be no law compelling a producer to pay royalties at a minimum frequency.

Re: Payment of Oil and Gas Royalties

You seem to misunderstand what a "statute of limitations" is.

It doesn't tell a business, or anyone, how promptly it must perform an act.

It tells a prospective litigant how long it can wait before filing a lawsuit. In other words, a statute of limitations doesn't require anyone to do anything, ever. It simply says that if you're ever going to file a suit, you must act within a certain time frame.

For example, a lawsuit for damages for breach of an oral contract must be brought within two years of the alleged breach, if ever.

To address your underlying question more directly, I'd say that the payment of oil and gas royalties is a matter of private contract; whoever gave the drilling concession in the first place presumably had an arms-length negotiation with the operator and the parties signed a royalty agreement that would contain clauses covering calculation of royalties and setting up payment intervals.

After skimming the Civil Code and more than 30 reported decisions on the amount and timing of oil and gas royalty payments in California, I did not note a single suggestion that there is any statute or principle of law that would impair the right of the contracting parties to set a time for payment of royalties as a matter of private contract. There seems to be no law compelling a producer to pay royalties at a minimum frequency.

Re: Payment of Oil and Gas Royalties

If you have a written contract, the statute of limitations is 4 years from the date that payments stopped. It would be 2 years if the contract is oral. In order to track the well, the State of California has a Web Site. We can help you if you have any questions. We would also have to review your agreement.