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Ratification of Oil and Gas Lease in ND

I thought everyone needs to know what happens if you quit claim deed- life estate minerals to your heirs. My uncle did this for my siblings and I, signed the worst lease ever with Irish OIl, which requires Ratification from the remaindermen, then he died.

Now, they are currently drilling the land, and three out of seven of us, have yet to sign the ratification. I have tried to work with the company who bought the leases to renegotiate terms and conditions, and they are not willing. As it is, their money is also held up, along with mine, until documents are signed.

I would advise to anyone who is in the same situation, to carefully review the lease, before signing any ratification, as it binds you. I have had landmen tell me that the only reason to sign a ratification, is to make sure the companies have your correct address for payment. Can I say "LIARS"!!!

North Dakota needs a landowner/mineral owner coalition to prevent such cases, and assist those in need of help negotiating. I have spent countless hours studying, searching, and preparing myself for the disasters that lie ahead of this production. BE CAREFUL OF WHAT YOU SIGN!!!

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Comment by Buddy Cotten on January 2, 2012 at 4:57pm: Dear Ms. Kuntz,

The ratifications of all were necessary only when your Uncle was alive. Otherwise the lease was only as good as his life, and those that ratified the lease. After death, ratifications are not necessary at all to validate the lease. Prior to death a ratified lease survived the death of the holder of the life estate, as to that interest.

After the death of your Uncle, the title to the property was immediately passed to the remainderman, outside of probate.

Those that did not ratify the lease are free to do with their minerals as they wish, as they are unleased.

The company that leased your uncle has no obligation to lease your minerals.

What ND needs is better laws, including less severance tax and none or better forced pooling and landowners who seek representation before entering into agreements of which they know nothing, but think that they do.

Best,

Buddy Cotten

Mineral Management

Cotten Oil Properties is a land firm committed to representing landowners and their leasing or other needs, on a national basis. www.cottenoilproperties.com

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Comment by jody kuntz on December 30, 2011 at 8:59pm: Mr. DM, I am a mineral owner...And Mr. Kennedy, I understand you are quite knowledgable in the industry. If I today sign a ratification, my non-participating interest turns into a 15% royalty, versus 100% royalty. There are statues in ND codified law that the company obviously overlooked prior to the commencement of drilling. They did manage to force pool my acreage, which puts me in a better position than I would have been signing a ratification. I also was not notified of risk penalty. So, I will hold as their appreciating asset gains, and I am to turn mine into a 85% depreciating asset? No thank you big oil....

Comment by r w kennedy on November 22, 2011 at 6:38am: Jody, no one would say I'm on the oil co side. That being said, I don't think you can renegotiate a lease that was signed before you came to own the property. I have read a couple of court cases involving Irish oil and I have a fairly low opinion of them, but that doesn't matter ( if Irish is the lessee). The fact is that the previous owner was hooked and all you will receive is what is in the lease. While the lessee would like to collect, they probably aren't going to die if they don't. That lease is an appreciating asset, which I'm sure they obtained at a bargain price. If the lessee gets paid 10 years from now that will probably be good enough for them. I wish you luck in your attempt to renegotiate, I just don't think it will bear fruit.

Comment by DM on October 23, 2011 at 8:01am: Hi Jody.

Are you a surface/mineral rights owner? The reason I ask is because I am a non-producing royalty interest owner (NPRI) on land that is being drilled on in South Texas. The O&G company passed paperwork for us to sign off on (Stipulation of Interest and Cross Conveyance). In it, they noted that we would be ratifying for not only the current lease but "ALL FUTURE LEASES". We would not sign it until they took the word future out of it. As an NPRI, we don't have any say about the O&G lease.