Oklahoma’s New Royalty Payment Law

On November 1, 2026, the rules for late royalty payments in Oklahoma change for the first time in a generation. House Bill 1371 raises the interest rate operators owe on late payments, stops interest from running in several common situations, and creates a new state fund where long unpaid royalties can be sent. If you own Oklahoma minerals, or you are an heir waiting on royalties that are tied up in an estate, the new law affects how much you can collect and where your money may end up.

The bill was a negotiated deal after years of litigation. Owners get a higher headline rate. Operators get simpler math, clear situations where interest does not accrue, and a way to send money they cannot pay to the State Treasurer and be done with it.

This guide explains what changed, how the new interest rules compare to the old ones, what the Mineral Owner’s Fund is, how the 36 month unclaimed property rule works, and what mineral owners should do now to protect their royalties.

Table of Contents

• Why Late Royalty Interest Became a Fight
• When Oklahoma Royalties Are Due
• The New 15 Percent Simple Interest Rate
• Unmarketable Title Still Earns Less
• When Interest Stops Running
• The New Mineral Owner’s Fund
• Unclaimed Royalties After 36 Months
• What Changes for Royalty Lawsuits
• What Mineral Owners Should Do Now
• Oklahoma Specific Considerations
• Frequently Asked Questions
• A Better Deal, If You Stay on Top of It

Why Late Royalty Interest Became a Fight

Oklahoma has required operators and purchasers to pay royalties on a set schedule since 1980, when the Legislature adopted what is now called the Production Revenue Standards Act. The law has always included a penalty for paying late: interest on the late amount, running from the end of the month the oil or gas was sold until the day it is paid. For decades the rate was 12 percent per year, compounded annually, which is a steep rate by any measure.

The problem was that many payors did not pay the interest unless an owner asked for it. A late check looked like any other check, and most owners never noticed the missing interest. Over time, the unpaid interest added up to very large numbers, and mineral owners began bringing class actions.

The Cline Case

The best known of those cases involved Sunoco and a class of more than 53,000 Oklahoma owners. A federal court found that Sunoco followed a practice of paying interest on late payments only when owners requested it, and it ruled that interest was owed whether or not anyone asked. Sunoco did not challenge that ruling on appeal. The judgment included roughly $104 million in actual damages and interest, plus $75 million in punitive damages.

In November 2025, the Tenth Circuit affirmed the class certification and the actual damages, including compounded interest, but threw out the $75 million punitive award, holding that Oklahoma law does not allow punitive damages on a claim for late payment alone. Sunoco then asked the U.S. Supreme Court to review the class ruling, and the Court denied review on October 5, 2026. The case showed producers how expensive compounded interest could become, and it showed mineral owners how much money had gone unpaid.

The Compromise

HB 1371 grew out of negotiations between royalty owner advocates and the oil and gas industry. The Oklahoma Senate described it as a negotiated agreement between mineral owners and producers that gives both sides an alternative to lengthy litigation. The Senate passed it 44 to 0 on April 15, 2026, the House passed it 88 to 3 on April 29, and Governor Stitt signed it on May 6. Oklahoma Energy Today reported that the governor signed the bill at the Petroleum Alliance of Oklahoma’s end of session event,. The full history is on LegiScan.

When Oklahoma Royalties Are Due

HB 1371 did not change the basic payment deadlines, but they matter because interest is measured from them. Under Oklahoma law, proceeds from a well must be paid to the owners entitled to them:

• Starting no later than six months after the date of first sale from the well, and
• After that, no later than the last day of the second month after the month the production was sold (the third month for certain royalty gas that passes through the operator)

Small amounts can be held and paid in batches. A payor may pay once a year when the twelve month total is at least $10 but less than $100, and may hold amounts under $10 until production stops or the payor turns over payment responsibility. Owners can ask to be paid monthly once their accumulated proceeds exceed $25, and payors must tell owners about that option before holding amounts above $25.

One more existing rule is worth knowing. A delay in paying an owner whose title has a problem cannot hold up payment to owners whose title is fine. If you own your interest cleanly and a cousin’s share is tied up in an estate, your royalties should keep flowing.

The New 15 Percent Simple Interest Rate

The headline change is the interest rate on late payments where title is marketable. The old law charged 12 percent per year, compounded annually. HB 1371 strikes the compounding language and sets the rate at 15 percent per year, simple interest, still calculated from the end of the month the production was sold until the day it is paid.

The difference between simple and compound interest matters more than the headline rate. Compound interest charges interest on prior years’ interest; simple interest grows by the same amount each year. That means the new rate pays owners more on payments that are a few years late and less on payments that are very late.

How the Old and New Rates Compare

Here is the interest owed on $10,000 of royalties paid late, under each rule:

The two rules cross at a little under five years. For most late payments, which are months or a few years late, owners come out ahead under the new law. For proceeds held in suspense for a decade, the old compounding produced far more. That trade is a large part of why producers accepted a higher headline rate.

Interest Is Still Owed Without Asking

Nothing in HB 1371 requires an owner to demand interest before it is owed. The statute ties interest to the payment deadline itself. If a royalty payment arrives late and the stub shows no interest, you are generally entitled to ask why.

Unmarketable Title Still Earns Less

A separate, lower rate applies when royalties are not paid because the owner’s title is not marketable. Marketability is judged under the Oklahoma Bar Association’s title examination standards, which, as the Oklahoma Bar Journal explains, have guided examiners since 1946. A title can be unmarketable even when the family has never doubted who owns the minerals, for example when a death was never probated or a deed has a gap.

Under the law since November 2018, the rate for unmarketable title is the prime rate as reported in the Wall Street Journal (6 percent compounded for periods before November 1, 2018). HB 1371 removes the compounding language and adds an express cap: the rate under this rule can never exceed 6 percent per year. Interest at this rate runs until title becomes marketable or the payor receives an acceptable affidavit of death and heirship.

The gap between 15 percent and a rate capped at 6 percent is large, which means whether a delay is blamed on “unmarketable title” can be worth real money. If your royalties are being held for title reasons, ask for the specific title requirement in writing.

The 120 Day Interpleader Option

If a title problem stays uncured for 120 days after payment is due, the owner can require the payor, or the payor can choose, to deposit the proceeds and accrued interest with a court so a judge can decide who owns them. Once the money is paid into court, the payor is off the hook. HB 1371 now gives payors a second option for many of these situations, the Mineral Owner’s Fund, discussed below.

When Interest Stops Running

The most important practical change for many families is a new list of situations where proceeds earn no interest at all. As OklahomaMinerals.com summarized, interest no longer accrues during probate issues, lien disputes, owner requested holds, and uncashed checks. Here is how each works.

When a Probate Is Needed to Clear Title

If title is not marketable and a probate is required to cure it, the proceeds earn no interest until title is cured and the payor receives a file stamped copy of the final decree. This is the change heirs will feel most. Under the old law, royalties held while a family slowly worked through an estate kept earning interest, at least at the lower unmarketable title rate. Now, every month the probate sits unfiled or unfinished is a month with no interest. If you have inherited minerals, our guide to inheriting oil and gas rights explains the first steps, and our Oklahoma probate timeline shows how long each stage usually takes.

Liens and Owner Requested Holds

Proceeds held because someone filed a statutory lien, or because the owner asked in writing that payments be held, earn no interest from the date of the lien filing or the written request. Under the new law, asking an operator to hold your payments stops interest immediately.

Returned and Uncashed Checks

If a check is returned as undeliverable or simply never cashed, interest stops on the date the check was mailed. There is an important protection here: this rule only applies if the payor mailed the check to an address it found through good faith and reasonable diligence, and the payor must keep records of mailing dates and copies of returned envelopes and checks. A payment sent electronically that the owner refuses stops earning interest on the date the transfer was started.

The 180 Day Rule for Held Proceeds

HB 1371 adds a related requirement that has received less attention. Where proceeds are held for any of these three reasons (a probate, a lien or owner hold, or a returned or uncashed check), the bill states that those proceeds shall be sent to the Mineral Owner’s Fund within 180 days after they become due. How operators and the Treasurer will apply this provision in practice is still unfolding, but on its face it means money held for these reasons may move to the state far sooner than owners expect.

As PakEnergy noted in its analysis for operators, payors will need to document and defend why each delay qualifies for relief. Owners should expect operators to apply these exceptions aggressively, and should be ready to push back when the facts do not fit.

The New Mineral Owner’s Fund

HB 1371 directs the Office of the State Treasurer to set up and run a new account called the Mineral Owner’s Fund. It is a separate, interest bearing escrow account held at a federally insured bank or savings and loan, and the money in it is held in trust for the owners entitled to it. The bill says it should be structured much like the escrow accounts that already hold pooling bonuses and royalties for unknown or unlocated owners, but kept separate from them.

When Operators Can Use It

An operator or other payor may send proceeds to the fund, along with any accrued interest, once they have gone unpaid for 36 months after they first became due. The payor can also use the fund instead of filing an interpleader action, and once it has sent an owner’s money to the fund, it can keep sending that owner’s later payments there too. Using the fund is optional for long unpaid proceeds.

What Happens to the Operator’s Liability

Once a payor sends proceeds to the fund and has followed the statute’s requirements, it is relieved of any further liability for the proceeds and interest it sent. From that point, the owner’s only source of recovery for that money is the fund.

Notice to the Owner

After the transfer, the payor must send written notice to the owner’s last known address explaining that the proceeds were sent to the Mineral Owner’s Fund and identifying the legal basis. Notice comes after the money moves, not before. If your address on file with the operator is out of date, that notice will go to the wrong place.

How Owners Claim Money From the Fund

The right to the money is not lost. An owner can claim it from the Treasurer by providing sufficient proof of identity and proof of ownership, using the same standard that applies to unclaimed property claims. For inherited minerals, proof of ownership usually means the same documents an operator would have required, such as a probate decree or a recorded affidavit of heirship. Our guide to heirship affidavits and curative title explains those options.

As of this writing, the Treasurer had not announced claim procedures specific to the new fund. Watch the State Treasurer’s unclaimed property site for updates after November 1. OklahomaMinerals.com reported that the fund is modeled on the state’s unclaimed property system, with an online search and twice yearly newspaper publication; those details are not in the bill itself and will depend on how the Treasurer implements it.

Unclaimed Royalties After 36 Months

HB 1371 also amends Oklahoma’s unclaimed property law. Most property, such as a forgotten bank account, is presumed abandoned after five years. Mineral proceeds that are not sent to the Mineral Owner’s Fund are now presumed abandoned 36 months after they were due to the owner. The bill also says mineral proceeds cannot be reported as abandoned sooner than six months after the first sale from the well.

The shorter clock means royalties for owners who have moved, lost track of an inheritance, or never updated an operator’s records will reach the State Treasurer two years sooner than before.

For families, this makes inherited minerals more urgent. A parent’s royalties that stop arriving after a death may already be in suspense, and within three years they can be in a state account that requires the same proof of ownership the operator would have required. Specialized vendors such as MineralRightsXchange recommend searching each state program separately and keeping a record of every search.

What Changes for Royalty Lawsuits

Oklahoma’s Energy Litigation Reform Act makes the royalty payment statute the exclusive remedy for late payment, as long as the statutory interest rate stays at a set level. HB 1371 updates that threshold from 12 percent compounded to 15 percent per year to match the new rate. The practical effect is unchanged: for a late payment claim, an owner recovers the proceeds and statutory interest, and nothing more, unless a jury or judge finds by clear and convincing evidence that the payor acted with the actual, knowing, and willful intent to deceive the owner or to keep money it knew belonged to the owner.

Combined with the switch to simple interest, the new pause rules, and the fund’s release of liability, producers expect fewer and smaller class actions. For individual owners, accurate records of when you should have been paid, and when you were, matter more than ever.

What Mineral Owners Should Do Now

The new rules reward owners who stay organized. As we discussed in our post on what mineral owners should do when oil hits $100, higher prices mean more is at stake every month an interest sits in suspense.

Read Your Check Stubs

Oklahoma law requires payors to give owners specific information with each payment, including the well, the production month, volumes, prices, deductions, and your decimal interest. Comparing the production month to the payment date is the simplest way to spot a late payment. Our guide to Oklahoma oil and gas leases explains division orders and the rest of the payment paperwork.

Do Not Let Inherited Minerals Sit

Under the new law, a family that waits years to probate an estate loses interest during the wait and may find the money moved to a state account. The best time to address an inherited interest is right after the death, while records and family knowledge are fresh. For your own minerals, holding them in a revocable trust or using an Oklahoma transfer on death deed can spare your heirs most of this process.

Push Back on Exceptions That Do Not Fit

Each interest pause has conditions. A returned check only stops interest if the payor used a diligently found address. A probate pause applies when a probate is actually required to cure title, not just because an operator prefers one. A hold based on an owner request needs a written request. When a payor relies on one of these exceptions to skip interest, ask for the documentation.

Oklahoma Specific Considerations

Several features of Oklahoma minerals make HB 1371 especially important here, and our mineral rights and leases practice sees each of them regularly.

Highly Fractured Ownership

Oklahoma minerals were severed from the surface generations ago and divided among heirs again and again, often without a probate. A single well can have hundreds of owners, many with small inherited interests and outdated addresses. Those are exactly the interests most likely to land in suspense, earn no interest under the new pause rules, and move to the Mineral Owner’s Fund or unclaimed property.

Out of State Heirs

Many Oklahoma minerals are owned by families who now live elsewhere. A home state probate does not transfer Oklahoma minerals; an Oklahoma proceeding or a recorded affidavit of heirship is usually needed. With interest paused while a probate is required, out of state heirs who assume their home state estate covers everything can lose years of interest.

Tribal and Restricted Minerals

Minerals owned by citizens of the Five Tribes or held in restricted status can involve federal approval requirements. If your family’s minerals came through a tribal allotment, our guide to mineral title on tribal lands and the Stigler Act explains how those interests differ.

Frequently Asked Questions

• What is Oklahoma HB 1371?

  It is a 2026 law that changes how Oklahoma operators and purchasers pay interest on late royalty payments. It raises the rate to 15 percent simple interest, adds situations where interest does not accrue, creates a Mineral Owner’s Fund at the State Treasurer, and shortens the unclaimed property period for mineral proceeds to 36 months.

• When does HB 1371 take effect?

  November 1, 2026. Governor Stitt signed it on May 6, 2026.

• What interest rate applies to late royalty payments in Oklahoma now?

  Starting November 1, 2026, 15 percent per year, simple interest, where title is marketable. Where title is not marketable, the rate is the prime rate, capped at 6 percent.

• Is 15 percent simple interest better than 12 percent compounded?

  For payments up to a little under five years late, yes. For payments held longer than that, the old compounded rate produced more interest.

• Do I have to ask the operator for interest?

  No. Interest is tied to the payment deadline, not to a demand. If a late payment arrives without interest, you can ask the payor to explain why.

• Do royalties earn interest while an estate is in probate?

  Not when a probate is required to clear title. Under HB 1371, those proceeds earn no interest until title is cured and the payor receives a file stamped copy of the final decree.

• What is the Mineral Owner’s Fund?

  A new escrow account run by the Oklahoma State Treasurer. Payors can send royalties that have gone unpaid for 36 months, with accrued interest, to the fund. Once they do, the payor is released and the owner must claim the money from the fund.

• How do I get money back from the Mineral Owner’s Fund?

  By giving the State Treasurer sufficient proof of identity and proof of ownership, the same standard used for unclaimed property. For inherited interests, that usually means a probate decree or recorded heirship documents.

• How long before unclaimed Oklahoma royalties go to the state?

  Under HB 1371, mineral proceeds not sent to the Mineral Owner’s Fund are presumed abandoned 36 months after they were due, down from the general five year period.

• Does an uncashed royalty check keep earning interest?

  No. Interest stops on the date the check was mailed, as long as the payor mailed it to an address found through good faith and reasonable diligence and kept the required records.

• Can I still sue an operator for late royalties?

  Yes, but the recovery is generally limited to the unpaid proceeds and statutory interest. Punitive damages require clear and convincing proof that the payor intended to deceive the owner or to keep money it knew was owed.

• Does HB 1371 apply to royalties that were already late?

  The bill does not clearly say how the new rate applies to proceeds that were overdue before November 1, 2026. If you have large or long held suspense balances, get advice before accepting a settlement or payout.

A Better Deal, If You Stay on Top of It

HB 1371 gives mineral owners a higher interest rate on the late payments most owners actually experience, and a clear path to recover money that operators cannot pay. In exchange, it rewards owners who keep their addresses current, cash their checks, and clear inherited title promptly, and it moves money to the state faster when they do not. Owners who let things drift will lose interest and may need to chase their royalties through a state claim process.

If you are not sure whether your royalties have been paid on time, why an interest is in suspense, or how to clear title to inherited minerals, now is the time to find out. Our oil and gas title team and our probate attorneys work together on exactly these problems.

Disclaimer: This article provides general information about Oklahoma HB 1371 and royalty payment law and is not legal advice. How the new rules apply depends on the specific well, the payment history, the title records, and how operators and the State Treasurer implement the law. Laws change and every situation turns on its own facts. For guidance on your specific situation, consult qualified Oklahoma counsel.

About Cantrell Law Firm: We are Oklahoma attorneys who help mineral owners, heirs, and operators with royalties, mineral title, and the estates that hold Oklahoma minerals. Learn more about our oil and gas practice. Contact us to discuss your royalties.