Ratification of O&G of non-participating interest

I received a letter with a request to ratify my non-participating royalty interest in Section 81, Block 4 in Reeves Co. There will be one or more wells drilled across sections 80 and 81, Block 4, H&GN Rr Co. Survey, Reeves Co. What does this mean? Since I’m Non-Participating does it make any difference if I do or don’t sign?
Thank you, Ann

Hi, Fannie.

Ratification can be a tricky business. It might be to your advantage to not ratify. Ratification can be very situation dependent.

Also, when you ratify a lease, you are ratifying the terms of the lease, which may allow deductions post production. The first thing that I want to negotiate is that we will ratify as to the unit outline and modify the royalty payment clause so that we are not charged with any deducts.

If the wellbore transverses your property, whether fee or split estate in Texas, and take points are under your property, you get paid. Signed ratification or not.

Tricky business.


Buddy Cotten