§ 15-74-603 - Action for nonpayment of proceeds. - Arkansas Statutes

15-74-603. Action for nonpayment of proceeds.

(a) Any court of competent jurisdiction of the county in which the oil or gas well is located shall have jurisdiction over all proceedings brought pursuant to this subchapter.

(b) If persons legally entitled to the proceeds seek relief for the failure of the purchaser to make timely payment of proceeds from the sale of oil or gas or interest thereon as required in 15-74-601 and 15-74-602, the first purchaser or the owner of the right to produce under an oil or gas lease or force pooling order shall be furnished with written notice of the failure as a prerequisite to commencing judicial action for the nonpayment.

(c) The first purchaser shall have thirty (30) days after receipt of the required notice within which to pay proceeds or to respond in writing with a reasonable basis for nonpayment.

(d) If the court is satisfied that payments have not been willfully withheld without just cause or through bad faith, the penalty provisions of 15-74-602 shall not apply to the withholding of the payments.

(e) In the event of willful nonpayment, or in the event the court finds there was a complete absence of a justiciable issue of either law or fact raised by the losing party or his or her attorney, the court shall award an attorney's fee in an amount not to exceed five thousand dollars ($5,000) or ten percent (10%) of the amount in controversy, whichever is less, to the prevailing party unless a voluntary dismissal is filed, or the pleadings are amended as to any nonjusticiable issue within a reasonable time after the attorney or party filing the dismissal or the amended pleadings knew, or reasonably should have known, that he or she would not prevail.

(f) The terms of this section shall not be applicable to any producing unit or well that produces liquid hydrocarbons only, or liquid hydrocarbons associated with the production of gas, or gas produced associated with the production of liquid hydrocarbons.