Omni Las Colinas Hotel - Las Colinas, Texas 2026 NADOA Institute September 8 - 11
Legal
Updates Articles are not intended to be and should not be relied upon as legal advice or to establish any kind of an attorney-client relationship with the author.
Simplifying Oklahoma Mineral Titles: Using Heirship Affidavits to Avoid Costly PRSA Interest on Suspended Royalties
The historic Cline v. Sunoco, Inc. 1 decision in 2020 (affirmed in key respects by the 10 th Circuit
The PRSA mandates timely payment of royalty proceeds to interest owners. When payments are delayed or suspended, the Act imposes interest to compensate owners and incentivize prompt distribution. Specifically: ● • If title is marketable, suspended proceeds earn interest at 12% per annum, compounded annually. 3 ● • If title is not marketable, the lower rate applies (tied to the prime rate as reported by the Wall Street Journal, effective November 1, 2018) until marketability is established. 4 1 479 F. Supp. 3d 1148 (E.D. Okla. 2020). On appeal the punitive damage award was disallowed, and the actual damages were adjusted from $75 million to approximately $103 million. See, Cline v. Sunoco, Inc., No. 23-7090, 2025 WL 3199871 (10th Cir. Nov. 17, 2025).
in 2025) highlighted a vulnerability in the Oklahoma oil and gas industry: the proper handling of suspended royalties under the Production Revenue Standards Act (PRSA). 2 This article explores a proven, uniquely Oklahoma strategy to address that vulnerability—using heirship affidavits to establish presumptive or conclusive marketability for severed mineral interests acquired from a decedent, thereby minimizing liability, avoiding unnecessary suspensions, and streamlining timely payments. Cline v. Sunoco Exposed: Automatic Interest Penalties and the Push for Timely Payments
2 52 O.S. 570.1–570.15. 3 52 O.S. § 570.10(D)(1). 4 52 O.S. § 570.10(D)(2)
13
G rowth T hrough E ducat i on - J anuary / F ebruary / M arch 2026
Made with FlippingBook Ebook Creator