John, Thank you so much for your reply. I hope the other reply I gave did not mail and now I am sending another but I seemed to have lost my reply so here goes again.
1, The landman contacted me and I told him to send me a contract. He asked me for info on all the names of the mineral rights owners on my late grandfather’s 380 acre farm. I emailed the info and never heard from him again.
2. My aunt got a contract, signed it and I think has received her lease money.
3. I was not concerned before as I thought I would receive 100% royalties after the expenses of the well and drilling was paid. Now your reply has me worried.
4, Do you think I should contact the landman to find out why I did not receive a contract
? I didn’t think his offer was that great…$500 per acre for a 5 year lease with 17% royalties. The way I looked at this offer was really $100 per acre and a very small royalty.
John Burman said:
Unleased mineral owners in North Dakota have 3 options:
2. Participate in the drilling and completion of any proposed well under ND Admin. Code 43-02-03-16.3.
3. Non-Consent - An operator will pay the unleased mineral owner’s share of interest then force pool the interest throught the NDIC - The non-participating owners DO NOT get 1/4 of production. They will be penalized cost +50% penalty on their interest. The operator seeking the risk panalty can either pay them the average weighted royalty until pay out or 16% until payout. After payout and 50% risk penalty, the unleased owner now becomes a full working interest owner in the well.
If 3/4 of you have signed a lease you now hold the tract as “co-tenants” - NDCC clearly states that a co-tenant can not prohibit any other of their co-tenants from egress or ingress. Even if 1/4 of you signed there’s still enough to drill. However, should the remaining 1/4 be an interest that is a significant part of the spacing unit an operator may not want to carry that cost burdon and may not drill the well.