Does anyone know if you choose to go nonconsent do you get payed for the leasing of your mineral rights ? Also do you recieve any royalties or does it all go towards paying your share of the well off?
The state the property is located in will help you get a more accurate answer.
It is located in North Dakota.
Rick Howell said:
The state the property is located in will help you get a more accurate answer.
Donna, you would not receive a lease bonus because you are not leasing. You would receive the average weighted royalty that everyone leased for or 16% whichever the operator elects, so just say 16%, from the very first barrel sold. The other 84% would go for paying for the well, operating expenses, and paying a 50% penalty of the actual cost of drilling and completing the well. Once the cost of the well and penalty are paid for, you would have a working interest. If the well never pays out and recovers the penalty, you owe nothing out of pocket.
You would miss out on the lease bonus but that is less than the value of 1% of your oil in most cases. To lease is usually to sell 80% or more of your oil for the lease bonus of less than 1% of it's value. Non-consent is not always the best near term option. Long term, becoming a working interest give you options, if it takes you seven years to become a working interest, you may be able to sell your working interest for more than the royalty your neighbors receive in 40 years because you would be selling 100% of your oil. If your neighbors sold their leased mineral acres, they would be actually selling their right to receive royalty on 20% or less of their oil, less deductions and without many tax deductions so worth far less. You need to think of the pro's and con's, of what you are considering.
We have been putting off making a the decision of whether to sign a lease or go non consent until probate was complete which happened this week. After crunching numbers obtained from oil and gas production we are approximately half way to paying off our share if the oil well, the well has been producing for 18th months so if it keeps producing at the same rate we could have it payed off in about another 18 months. My husband and I have done a lot of research o the best way to go and i think we will be going non consent Thank you so much for your info, it is always helpful.