When operators must pay oil & gas royalties — and what late payment costs them — in all 28 states, with the statute behind each rule. Last reviewed .
State law sets royalty payment deadlines in 12 of the 28 oil and gas states covered here: the first payment is typically due 120 days to six months after the first sale, then 30 to 90 days after the end of each month of sale, with interest owed on late proceeds. 3 more states (Kansas, Mississippi, and North Dakota) start a late-interest clock instead of setting a deadline, 6 have only narrower rules, and 7 (Alaska, California, Kentucky, Nebraska, Ohio, South Dakota, and Tennessee) leave payment timing to the lease. Last reviewed October 19, 2026.
Alabama, Arkansas, Colorado, Illinois, Montana, New Mexico, Oklahoma, Pennsylvania, Texas, Utah, West Virginia, Wyoming
Alaska, California, Kentucky, Nebraska, Ohio, South Dakota, Tennessee
Each row is the rule as written in that state's statute, verified against the primary source on October 19, 2026. Clocks start at different events by state — the month of first sale, first marketing, or the first day of the following month — so read your state's trigger closely.
| State | What the law requires | Statute |
|---|---|---|
| Alabama Payment deadline + late interest |
Alabama requires the first purchaser to pay owners within six months after first sale, then within 60 days after the end of the month of sale. Late proceeds bear 12% annual interest, or the Federal Reserve discount rate where title is unmarketable; an operator that collects and pays proceeds steps into the purchaser’s place. | Ala. Code §9-17-33(c)-(e) |
| Alaska No statute — lease governs |
Alaska has no statute setting payment deadlines for private royalty owners; timing comes from the lease. A late-payment interest rule applies only to royalties owed to the State as lessor. | AS 31.05 (no payment-deadline statute); cf. AS 38.05.135 (state royalties) |
| Arkansas Payment deadline + late interest |
Arkansas requires the first purchaser to pay owners within six months after first sale, then within 60 days after the end of the month of sale. Late proceeds bear 12% annual interest unless a written agreement sets another rate; for gas-only wells, willful withholding can add a penalty and attorney fees after 30 days’ written notice. | Ark. Code §§15-74-601 to 15-74-603 |
| California No statute — lease governs |
California has no statute setting royalty payment deadlines or a statutory late-payment interest rate for private royalty owners; payment timing is governed by the lease. | No payment-deadline statute |
| Colorado Payment deadline + late interest |
Colorado requires the first payment within six months after the end of the month of first sale, then monthly within 60 days (oil) or 90 days (gas) after the end of the month of sale, unless the lease provides otherwise. Late proceeds bear interest at twice the Kansas City Fed discount rate; the owner must first give certified-mail notice, and most disputes go to the ECMC. | C.R.S. §34-60-118.5 |
| Florida Narrow statute only |
Florida has no general royalty payment-deadline statute; timing comes from the lease. The only statutory clock covers royalties of unknown or unlocated owners under a state receivership order, which are remitted to the state once a year. | Fla. Stat. §377.247 (receivership only) |
| Illinois Payment deadline + late interest |
Illinois requires the first payment within 150 days after the end of the month of first purchase, then — unless the lease sets other timing — within 60 days (oil) or 90 days (gas) after the end of the month of sale. Late proceeds bear interest at the New York Fed discount rate, except where payment is withheld over a title dispute, and the owner must give written notice before suing. | 765 ILCS 520/10 |
| Indiana Narrow statute only |
Indiana’s only payment-timing statute covers crude oil purchasers: payment is due within 60 days after the abstracts of title are approved and executed division orders are received, with 6% annual interest on late payment. There is no comparable statute for natural gas. | Ind. Code §§32-23-9-1, 32-23-9-2 (crude oil only) |
| Kansas Late-interest clock |
Kansas sets when interest starts rather than a payment deadline: interest on unpaid proceeds accrues from 60 days after the end of the month of first sale (new wells get a 120-day window), at 1.5 points above the New York Fed discount rate. A waiver of that interest is void unless it is in writing and expressly references the statute. | K.S.A. 55-1614 to 55-1622 |
| Kentucky No statute — lease governs |
Kentucky has no statute setting royalty payment deadlines or a statutory late-payment interest rate; payment timing comes from the lease. | KRS Chapter 353 (no payment-deadline statute) |
| Louisiana Narrow statute only |
Louisiana sets no deadline for paying a lessor’s royalties; timing comes from the lease. Before suing, the owner must give written notice, and the lessee has 30 days to pay or state a reasonable cause — failing that, a court may award double the royalties due, interest, and attorney fees, or dissolve the lease. Unleased owners in a compulsory unit must be paid within 180 days of the sale. | La. R.S. 31:137-140; 30:10(A)(4) (unleased owners) |
| Michigan Narrow statute only |
Michigan’s rule covers gas leases only: monthly statements and payments must begin promptly once the division of interests is determined, with no fixed day count and no statutory late-payment interest rate. A lessor must give written notice and at least 30 days to cure before suing. | MCL 324.61503a-324.61503c (gas leases) |
| Mississippi Late-interest clock |
Mississippi makes purchasers liable for interest on royalties not disbursed within 120 days after first sale; later payments made within 60 days after the end of the month of sale accrue none. The rate is the greater of 8% or two points above the federal discount rate, or the discount rate where title is unmarketable. | Miss. Code Ann. §53-3-39 |
| Montana Payment deadline + late interest |
Montana requires royalties within 120 days after the first oil or gas under the lease is marketed, then within 60 days for oil and 90 days for gas. Unpaid royalties bear interest from the due date at the maximum rate authorized under MCA 31-1-107, and the prevailing party recovers attorney fees. | MCA §82-10-103 |
| Nebraska No statute — lease governs |
Nebraska has no statute setting royalty payment deadlines or a statutory late-payment interest rate; payment timing comes from the lease. | Neb. Rev. Stat. ch. 57 (no payment-deadline statute) |
| New Mexico Payment deadline + late interest |
New Mexico’s Oil and Gas Proceeds Payment Act requires the first payment within six months after the first day of the month following first sale, then within 45 days after the end of the month in which the payor is paid for the production. Late proceeds earn interest at the Dallas Fed discount rate plus 1.5%, rising to 18% a year when the payor had what it needed to pay; a good-faith title objection excuses the higher rate. | NMSA 1978 §§70-10-3 to 70-10-5 |
| New York Narrow statute only |
New York has no payment-deadline statute, but every oil or gas lease signed since 2006 must state in bold type that four or more consecutive months of unpaid royalties is a default that can cancel the lease after written notice and a 60-day cure period. | N.Y. Gen. Oblig. Law §5-333(5) |
| North Dakota Late-interest clock |
North Dakota sets no separate first-payment date: an operator that does not pay royalties within 150 days after the oil or gas is marketed owes 18% annual interest automatically, plus attorney fees if the owner prevails in court. Royalties may not be withheld because an owner has not signed a division order. | N.D.C.C. §§47-16-39.1, 47-16-39.3 |
| Ohio No statute — lease governs |
Ohio has no statute setting royalty payment deadlines or a statutory late-payment interest rate; payment timing comes from the lease. Gas royalty holders can request the volumes, price, and meter readings behind their payments for up to two prior years. | R.C. 1509.30 (no payment-deadline statute) |
| Oklahoma Payment deadline + late interest |
Oklahoma’s Production Revenue Standards Act requires the first payment within six months after first sale, then by the last day of the second month after the month of sale. Late proceeds bear 12% interest compounded annually; where payment is held because title is unmarketable, interest runs at the prime rate instead. | 52 O.S. §570.10 |
| Pennsylvania Payment deadline + late interest |
For unconventional (Marcellus and Utica) production, Pennsylvania’s Oil and Gas Lease Act requires the first payment within 120 days of first sale and later payments within 60 days after the end of the month of sale, with interest at the 6% legal rate on late proceeds — unless the lease provides otherwise. Title defects, bona fide ownership disputes, and unlocatable owners are excepted. | Oil and Gas Lease Act §3.3(e)-(f) (Act 60 of 1979, as amended by Act 153 of 2022) |
| South Dakota No statute — lease governs |
South Dakota has no statute setting royalty payment deadlines or a statutory late-payment interest rate; payment timing comes from the lease. | SDCL ch. 45-9 (no payment-deadline statute) |
| Tennessee No statute — lease governs |
Tennessee has no statute setting royalty payment deadlines or a statutory late-payment interest rate; payment timing comes from the lease. | Tenn. Code Title 60 (no payment-deadline statute) |
| Texas Payment deadline + late interest |
Texas requires the first royalty payment within 120 days after the end of the month of first sale, then — unless the lease sets other timing — within 60 days (oil) or 90 days (gas) after the end of the month of sale. Late proceeds bear interest at two percentage points above the New York Fed discount rate; no interest is owed on payments withheld over a title dispute or an unmet title requirement, and the owner must give written notice before suing. | Tex. Nat. Res. Code §§91.402-91.404 |
| Utah Payment deadline + late interest |
Utah requires the first payment within 180 days after the first day of the month following first sale, then within 30 days after the end of the month in which the payor is paid. Funds that cannot be paid on time go into interest-bearing escrow; on an owner’s petition, the Board of Oil, Gas and Mining can order interest of 1.5% a month and a penalty where the delay was unjustified. | Utah Code §40-6-9 |
| Virginia Narrow statute only |
Virginia has no general royalty payment-deadline statute; timing comes from the lease. The Gas and Oil Act sets 30-day clocks only for releasing escrowed royalties once an unknown owner is found or a conflicting claim is resolved. | Va. Code §§45.2-1620, 45.2-1622 |
| West Virginia Payment deadline + late interest |
For horizontal wells, West Virginia requires the first payment within 120 days of the first sale and later payments within 60 days, with a mandatory interest penalty of prime plus 2% compounded quarterly. For conventional wells, a lessee that leaves royalty unpaid more than six months past its lease due date owes three times the unpaid royalty’s market value (suits filed on or after July 1, 2025). | W. Va. Code §37C-1-3 (horizontal wells); §36-4-9c (conventional wells) |
| Wyoming Payment deadline + late interest |
The Wyoming Royalty Payment Act requires the first payment within six months after the first day of the month following first sale, then within 60 days after the end of the month of sale. Late proceeds bear 18% annual interest, and funds that cannot be paid on time must be placed in an interest-bearing Wyoming escrow account. | Wyo. Stat. §§30-5-301 to 30-5-303 |
Statutory deadlines are outer limits, not the normal schedule: most payors pay monthly, about two months behind production, once an owner is set up. Where a statute allows it, the lease can set different timing, and interest is usually excused or reduced while title is genuinely in dispute. If a payment is late, start with the payor's owner-relations department and your owner number from the check stub — find which operator pays under the name on your check, and see how to read a royalty check stub to spot suspense codes.
General information, not legal advice. Statutes are amended and courts interpret them; your lease and your specific facts control. Talk to an oil and gas attorney before relying on a deadline or interest claim. American Royalty Buyers is a mineral and royalty buyer, not a law firm. Last reviewed October 19, 2026; report a correction to [email protected].
It depends on the state where the well is. In the 12 states with a payment-deadline statute, the first payment is typically due 120 days to six months after the first sale, and later payments 30 to 90 days after the end of each month of sale. In Texas the first payment is due within 120 days after the end of the month of first sale, and later payments within 60 days (oil) or 90 days (gas) after the end of the month of sale unless the lease says otherwise, with interest on late proceeds (Tex. Nat. Res. Code §§91.402-91.403). In Oklahoma the first payment is due within six months after first sale, then by the last day of the second month after the month of sale, with 12% interest on late proceeds (the prime rate where title is unmarketable) (52 O.S. §570.10). In New Mexico the first payment is due within six months after the first day of the month following first sale, then within 45 days after the end of the month in which the payor is paid, with interest of up to 18% a year on late proceeds (NMSA 1978 §§70-10-3 to 70-10-5). Where the statute allows it, the lease can set different timing, so check yours.
In most states with a payment statute, yes. Some set a fixed annual rate — 12% in Oklahoma, Alabama, and Arkansas, and 18% in Wyoming and North Dakota — while others tie the rate to an index, such as two percentage points above the New York Fed discount rate in Texas. Interest is commonly excused or reduced while title is genuinely in dispute or unmarketable, and several states, including Texas, Illinois, and Colorado, require written notice to the payor before an owner can sue.
Alaska, California, Kentucky, Nebraska, Ohio, South Dakota, and Tennessee have no statute setting payment deadlines or late-payment interest for private royalty owners, so the lease controls — look for its payment clause and any interest or default provision. Florida, Indiana, Louisiana, Michigan, New York, and Virginia have narrower rules: Indiana's covers crude oil only, for example, and New York requires leases to treat four or more consecutive months of unpaid royalties as a default.
Usually several months after the well starts selling. The payor first has to set up division-order title and confirm each owner's decimal interest, and the statutory windows reflect that: Texas allows 120 days after the end of the month of first sale, and Oklahoma, New Mexico, and Wyoming allow about six months. The first check often covers several months of accumulated production; after that, payments typically arrive monthly, roughly two months behind production.