Case Studies

Securing Mineral Rights: How We Helped Recover Lost Royalties

Mar 04 — 2025

By Nixon Daughtrey

Executive Summary

A limited liability company (LLC) in Utah owns the mineral rights to a valuable oil property. This property is now at the center of a big royalty dispute. This conflict arose due to ambiguous land titles and instances of unauthorized oil extraction. Compounding the issue, a major oil company commenced drilling operations on the property without securing a valid lease agreement. This action broke oil and gas laws. It also led to the LLC not receiving its rightful royalty payments. The situation highlights the complexities of owning mineral rights. It also shows how important clear legal agreements are in the oil industry.

Through strategic legal intervention, we:
✅ Resolved complex title issues, establishing clear mineral ownership.
✅ Secured a lump-sum settlement, recovering all unpaid oil royalties.
✅ Negotiated a strong lease agreement, ensuring fair compensation and protecting future payments.

This case highlights the critical role of oil and gas attorneys in protecting mineral rights owners from industry malpractice.

About the Client

Client: Utah-based LLC
Industry: Oil and Gas Mineral Rights & Leasing
Legal Issue: Unauthorized oil production & unpaid royalties
Key Concern: Recovering lost payments & ensuring future compliance

Our client owned important mineral rights on a piece of land known for its strong oil production potential. Unfortunately, problems with inheritance and the complexities of an intestate estate caused the title to be recorded incorrectly. This led to confusion about who owns the land. An energy company began oil exploration and drilling on the property. They did this even though there were issues and no formal approval. This situation raised concerns about following the law. It also showed how important it is to fix title issues before extracting any resources.

This resulted in:
⚠️ Loss of significant oil and gas royalties
⚠️ Unclear ownership disputes causing legal complications
⚠️ Inability to negotiate fair lease terms

The Challenge: Oil and Gas Title Issues & Unlawful Drilling

Title Deficiencies

The mineral rights title was unclear due to an intestate estate, complicating legal ownership.
Without a recorded title, enforcing lease agreements and collecting oil and gas royalties was legally challenging.

Unauthorized Oil Extraction & Lease Violations

A major oil corporation proceeded with exploration and drilling without a mineral lease agreement.
Our client was excluded from negotiations and denied rightful payments.
The oil company generated significant revenue from oil sales without compensating the actual rights holder.

Financial & Legal Impact on the Client

Zero compensation despite oil production occurring on their land.
Loss of leverage in future oil and gas lease negotiations.
Risk of continued exploitation of their property without penalties or legal safeguards.

These challenges demanded immediate legal intervention to prevent further financial losses and secure rightful ownership protections.

The Legal Strategy: Protecting Mineral Rights in Oil and Gas Law

In order to effectively safeguard the client’s mineral rights, we implemented a comprehensive three-step legal strategy. This plan combined different parts of property law. It followed the rules for oil and gas leasing. It also included strong strategies for enforcing contracts. Each component was designed to ensure maximum protection and compliance.

Step 1: Title Resolution & Ownership Establishment

We conducted a comprehensive title review and:

Researched historical land records to verify rightful ownership.
Cleared all inheritance disputes and intestate title defects.
Registered the mineral rights under the correct LLC ownership.

🚀 Result: The client’s mineral rights were legally recognized and enforceable!

Step 2: Negotiating a Settlement for Unpaid Oil and Gas Royalties

Once ownership was legally established, we:

Sent a formal legal notice to the oil company regarding unauthorized drilling.
Demanded immediate cessation of production until a valid lease was secured.
Negotiated a substantial lump-sum payment to cover all past royalties owed.

🚀 Result: The oil company agreed to pay the full value of the oil they took. This secures financial compensation for our client!

Step 3: Drafting a Strong Oil and Gas Lease Agreement

To prevent future payment disputes and contract violations, we:

Renegotiated lease terms to ensure fair compensation for oil production.
Included royalty payment enforcement clauses with strict late payment penalties.
Structured the lease to protect against underpayment, delayed payments, and unauthorized activities.

🚀 Result: The client now has a long-term revenue stream with guaranteed payments and enforceable lease protections!

The Results: Legal Victory & Financial Recovery

This strategic legal approach resulted in:

Full recovery of all unpaid oil and gas royalties
Negotiated lump-sum settlement for unauthorized production
Established a legal framework for lease compliance & future payments
Prevented further mineral rights exploitation

Key Legal & Financial Wins	Before	After Our Legal Intervention
Mineral Rights Ownership	Disputed	Fully Legally Established
Royalty Payments Received	$0	100% Compensation Secured
Legal Protections in Place	Weak	Strong Lease with Penalty Clauses
Financial Stability	Uncertain	Guaranteed Future Royalties

Key Takeaways for Mineral Rights Owners

Clear Title = Strong Legal Rights: Without a properly recorded title, companies may exploit mineral resources without compensation.
Early Legal Intervention Saves Millions: Acting fast prevents prolonged financial losses and legal battles.
Strong Lease Terms Matter: Penalty clauses ensure compliance and deter payment delays.
Expert Oil and Gas Attorneys Are Important: Handling complex contracts and enforcing mineral rights laws needs special legal knowledge.

Client Testimonial

“Without Daughtrey Law Firm, we would have continued losing thousands in unpaid royalties. Their expertise in oil and gas law services helped us recover every cent and secure our future revenue. We highly recommend their mineral rights legal services!”
— Utah-Based LLC