I own a non-Participating Royalty Deed that does not have a term clause. Does the NPRD royalty deed remain in effect forever? Another question: if the tract is not Held By Production and then new leases are taken, the NPRI to new leases can increase or decrease my royalty interest based on a new lease royalty amount. I do understand I will not get any bonus consideration, received any bonus considerations other than royalty payments.
Also, how does a lease or a ratification of lease change your decimal interest if the minerals are under, say, tract A and not tract B? I do not own any interest in tract B. Example: 10 acres in tract A, none in tract B. I assume that my decimal interest will be cut in half. The ratification lease document that I have not signed, the cover letter with ratification document states if I do not ratify the lease my cash flow from existing well in tract A will be suspended.
Again, tract A is producing; tract B is not currently Held By Production. As I said, I own an NPRD in tract A. I am not sure if the unit has yet to be created. My guess is the tracts will consist of two sections for a horizontal well. I am not sure if anyone has permitted a well in tract B. Can anyone advise me should I ratify or not? Again, at this time my royalty proceeds have not been suspended. I assume when the unit is approved by the Railroad Commission then my interest will be diluted as in my example by half.