If the owner of a mortgaged property was entitled to oil and gas royalties before foreclosure, who will receive those royalties after the sale?

In the scenario described, the purchaser of the foreclosed property will receive the oil and gas royalties after the sale. When a property is foreclosed, ownership transfers from the original owner to the purchaser—typically the entity or individual that buys the property at a foreclosure auction.

In most jurisdictions, the rights to any ongoing income associated with the property, including oil and gas royalties, are generally transferred along with the title to the property. This means that once the sale is completed, the new owner inherits those rights, including any potential royalties that may arise from the oil and gas activity associated with the land.

The original owner would no longer hold any rights to the property or its income after the foreclosure is finalized, as they lose their ownership interest. The lender typically recoups their investment through the sale proceeds and does not directly receive royalties unless specified otherwise in the mortgage agreement. The state government would not have any claim to those royalties unless there was a specific regulatory or statutory reason to do so, which is not typically the case in standard foreclosure processes. Thus, the purchaser of the foreclosed property is indeed the correct recipient of the oil and gas royalties.