Oklahoma Statutes
Title 52. Oil and Gas
§52-570.10. Payment of proceeds from sale of oil and gas production.

A. All proceeds from the sale of production shall be regarded as separate and distinct from all other funds of any person receiving or holding the same until such time as such proceeds are paid to the owners legally entitled thereto. Any person holding revenue or proceeds from the sale of production shall hold such revenue or proceeds for the benefit of the owners legally entitled thereto. Nothing in this subsection shall create an express trust.

B. Except as otherwise provided in this section:
1. Proceeds from the sale of oil or gas production from an oil or gas well shall be paid to persons legally entitled thereto:
2. Notwithstanding paragraph 1 of this subsection, royalty proceeds from the sale of gas production from an oil or gas well remitted to the operator pursuant to subsection B of Section 570.4 of this title shall be paid to persons legally entitled thereto:
3.a.Proceeds from production may be remitted to the persons entitled to such proceeds annually for the twelve (12) months accumulation of proceeds totaling at least Ten Dollars ($10.00) but less than One Hundred Dollars ($100.00). Amounts less than Ten Dollars ($10.00) may be held but shall be remitted when production ceases or by the payor upon relinquishment of payment responsibility.
4. Any delay in determining the persons legally entitled to proceeds from production caused by unmarketable title shall not affect payments to persons whose title is marketable, or that portion of a person's interest which is marketable.
C. 1. A first purchaser that pays or causes to be paid proceeds from production to the producing owner of such production or, at the direction of the producing owner, pays or causes to be paid royalty proceeds from production to:
shall not thereafter be liable for such proceeds so paid and shall have thereby discharged its duty to pay those proceeds on such production.
2. A working interest owner that pays or causes to be paid royalty proceeds from production to:
shall not thereafter be liable for such proceeds so paid and shall have thereby discharged its duty to pay those proceeds on such production.
3. An operator that pays or causes to be paid royalty proceeds from production, received by it as operator, to the royalty interest owners legally entitled thereto shall not thereafter be liable for such proceeds so paid and shall have thereby discharged its duty to pay those proceeds on such production.
4. Where royalty proceeds are paid incorrectly as a result of an error or omission, the party whose error or omission caused the incorrect royalty payments shall be liable for the additional royalty proceeds on such production and all resulting costs or damages incurred by the party making the incorrect payment.
D. 1. Except as otherwise provided in paragraph 2 of this subsection, where proceeds from the sale of oil or gas production or some portion of such proceeds are not paid prior to the end of the applicable time periods provided in this section, that portion not timely paid shall earn interest at the rate of twelve percent (12%) per annum to be compounded annually, calculated from the end of the month in which such production is sold until the day paid.
2.a.Where such proceeds are not paid because the title thereto is not marketable, such proceeds shall earn interest at the rate of (i) six percent (6%) per annum to be compounded annually for time periods prior to November 1, 2018, and (ii) the prime interest rate as reported in the Wall Street Journal for time periods on or after November 1, 2018, calculated from the end of the month in which such production was sold until such time as the title to such interest becomes marketable or the holder has received an acceptable affidavit of death and heirship in conformity with Section 67 of Title 16 of the Oklahoma Statutes, or as set forth in subparagraph b of this paragraph. Marketability of title shall be determined in accordance with the then current title examination standards of the Oklahoma Bar Association.
E. 1. Except as provided in paragraph 2 of this subsection, a first purchaser or holder of proceeds who fails to remit proceeds from the sale of oil or gas production to owners legally entitled thereto within the time limitations set forth in paragraph 1 of subsection B of this section shall be liable to such owners for interest as provided in subsection D of this section on that portion of the proceeds not timely paid. When two or more persons fail to remit within such time limitations, liability for such interest shall be shared by those persons holding the proceeds in proportion to the time each person held such proceeds.
2. When royalty proceeds on gas production are remitted pursuant to subsection B of Section 570.4 of this title:
F. Nothing in this section shall be construed to impair or amend existing or future contractual rights provided for in gas balancing agreements or other written agreements which expressly provide for the taking, sharing, marketing or balancing of gas or the proceeds therefrom. Any proceeds to be paid pursuant to any such agreement shall not commence to earn interest until the sooner of the time provided in such agreement for the payment of such proceeds or ninety (90) days from the date of the depletion of the well. Nothing herein shall be deemed to alter or limit the payment of royalty proceeds as provided in the Production Revenue Standards Act.
G. All payments under the Production Revenue Standards Act to owners or any other person or governmental entity legally entitled to the payment may be made by electronic means including but not limited to electronic funds transfer, Automated Clearing House (ACH), direct deposit, wire transfer, or any other similar form of transfer, upon the mutual written consent of the payor and payee.
Added by Laws 1980, c. 205, § 1, eff. July 1, 1980. Amended by Laws 1985, c. 141, § 1; Laws 1989, c. 241, § 1, eff. July 1, 1989; Laws 1992, c. 190, § 10, eff. July 1, 1993. Renumbered from § 540 of this title by Laws 1992, c. 190, § 28. Amended by Laws 1993, c. 337, § 2, eff. July 1, 1993; Laws 1995, c. 146, § 1; Laws 2010, c. 152, § 1, emerg. eff. April 20, 2010; Laws 2018, c. 6, § 1, eff. Nov. 1, 2018.

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