New Exploration Technologies Give Rise To Unclaimed Property Compliance Issues

The recent expansion of oil and natural gas exploration and production activities in previously unprofitable areas has brought increased attention to issues surrounding compliance with state unclaimed property laws.  Producers should be mindful of the powerful incentives that exist for states and third-party auditors to aggressively pursue those who are out of compliance with the often unknown duties arising in the area of unclaimed property, and owners of royalty interests should be aware that states may be holding funds in their names.

State laws generally require a person holding the property of another to attempt to locate the owner of that property after a specified period of time has passed without contact.  If the owner cannot be located, then most states require the holder of the property to treat the property as unclaimed or abandoned, to prepare and file a report with the state of all the unclaimed property held, and to turn the property over to the