RS 31:210.2

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RS 31:210.2

§210.2. Declaration of interest; when third party purchasers of oil may withhold payment

A. For purposes of this Article, "declaration of interest" means a signed statement by a party claiming an interest in mineral production, including the authority to sell production belonging to others, and containing the name, address, and taxpayer identification number, a description of the property from which the oil and condensate are produced, and a certification and representation of the claimant's fractional or decimal interest in the production.

B. Until receipt of a declaration of interest, a third party purchaser of oil and condensate is fully protected and may withhold payment for the production.

C.(1) Any party claiming an interest in oil and condensate production must notify a third party purchaser by registered mail.

(2)If the third party purchaser has received a declaration of interest from the claimant, the third party purchaser shall pay the claimant any amounts due for the production within sixty days.

(3)If the third party purchaser fails to pay a claimant who has provided a declaration of interest or fails to inform the claimant of reasonable cause for nonpayment within sixty days of receipt of the notice of interest, the court may impose damages in an amount not to exceed fifty percent of the amount due, plus legal interest on the amount due on the date the required notice was received and reasonable attorney's fees and court costs.

(4)If reasonable cause for nonpayment exists or the third party purchaser has not received a declaration of interest from the claimant, the third party purchaser shall deposit any payments due into an interest-bearing account.

(5)The provisions of this Article shall not apply to payments due to a mineral lessor or any person who is afforded a remedy under Articles 137 through 142 for nonpayment or delayed payment of sums due, except where such persons elect to contract directly with the third party purchaser for the sale of his share of production.

(6)The withholding of payments by a third party purchaser pursuant to this Article shall not constitute reasonable cause for nonpayment of royalty pursuant to Article 138.

D. A third party purchaser of oil and condensate may suspend payment without incurring any interest or penalties to any payee if the aggregate twelve-month accumulation of proceeds totals twenty-five dollars or less.

E. Notwithstanding any other provision of this Code, this Article affords protection to a third party purchaser.

Acts 1992, No. 155, §1, eff. June 5, 1992.