Non-participation wells

Hello everyone,

My family has 16 wells in Williams County, N.D. We participated in one and the other 15 we have chosen not to participate from advice from our attorney since our shares are relatively small; we have no leases. The first well we chose not to participate in is nearing the point where our penalty will be paid. This has taken 3 and 3/4 years to get to this point. We have 11 other wells that are producing fairly well and are questioning if this amount of time is average to wait for the penalty to be paid. We are receiving 16% by law on these wells but almost 4 years to wait for 80% sounds like an awful long time.

The remaining 3 wells have permission to drill [LOC status] but nothing has been done as yet. I expect the oil company would be awaiting the change in oil prices to determine when to begin drilling.

One other question is that regarding our check stubs; where is it located on the stub what our well interest is to determine how much we receive that a well for that month?

Thanks for any help.

Pat Maloney

How long did it take the well you participated in to reach payout? Have you seen the price of oil lately?

I'd say that 3-4 years isn't that unusual. Obviously every well is different. There are lots of wells will never even reach payout simple payout in this environment, much less payout a non-consent penalty. I'd say you are doing better than most.

Not sure I understand your question about the check stub. If you are asking where your ownership percentage is shown, it will totally depend on which accounting software the Operator is using. Normally there will be a decimal interest with 6 or 8 places shown. If you want to send me a copy of your stub I can look at it for you. If you don't want to put it on the forum, send me a pm and I can give you an email to send it to.


We don't get a check "stub" as such. But we do get a Revenue Summary Statement that lists our decimal royalty interest along with the check.


Pat: On the one you have participated, is that where the penalty comes from? Why would you owe any penalty from the other 15? You have no leases but are receiving production from others? Ask them about the check stubs, They should be able to give you a full run down and certainly it should coincide with the check stubs. If it isn't on the check stubs, they should be able to give you all the information you want separately. Let me know how it turns out. John

When one does not participate in the well, all you get is the mandated 16% on that well as you are affixed a 150% penalty for not participating. Once that gets paid down [as noted on our payout statements for these non-contributing wells] we then will get the full amount [approximately 80%] on well royalties. We were not penalized on the first well which we did participate in on drilling expenses and subsequent costs.

Our concern is that due to low oil prices [although today it went about $50.00], it will take a lot of time for us to get our total 80%. We are already in our late 60's and early 70's so that is disheartening to say the least. We actually have 13/16 wells that are currently producing as the other 3 are still on LOC status.

Thanks Rick for clearing up that decimal royalty interest.

Pat Maloney