Landowners Sue Oil Firms Over Unpaid Royalties in Tom Green County

SAN ANGELO, TX — Three landowners have filed suit in Tom Green County, alleging that oil and gas companies failed to pay royalties and surface damages, breached lease terms, and continued to claim rights to more than 1,600 acres despite lapses in production.

Plaintiffs John Wesley Skelton, Jason R. Skelton and Jo Elle Grace Peterson sued Banner Resources, LLC and multiple Prestonwood entities. Their petition claims the companies owe more than $11,500 in unpaid royalties from oil produced between March 2019 and February 2020, over $66,000 in surface damage payments for pipeline installations, and $31,500 in penalties for storing oil field equipment longer than the 60-day limit set in the lease.

The dispute traces back to an oil, gas and mineral lease signed in April 2007 covering tracts in Surveys 22 and 11 of Tom Green County. The lease, later amended and expanded, obligated the lessee to pay a 20% royalty, $6 per rod for flow lines, and penalties for extended storage of equipment. Court records show Banner Resources transferred its interests in 2019 to PrestonwoodSAI, LLC through a partial assignment, placing Prestonwood into the chain of title.

The plaintiffs argue that the lease terminated when drilling operations ceased, yet the defendants continued asserting rights to the land. They are asking the court to declare the lease void, clear their title of any claims, and award damages, interest and attorneys’ fees.

Judge Jay K. Weatherby has scheduled a hearing for Sept. 24 in the 391st District Court on the plaintiffs’ motion to enforce a mediated settlement agreement.