Just Received an election to participate or go non-consent on this well. Sandridge says if we elect to not participate,we are subject to a non-consent penalty. Is this standard? What is the penalty? I’m new at this and a bit scared.
Non-consents are standard for the joint operating agreement working interest owners. If you do not consent, you have no worry. (It would be nice to know what the penalty is for non-consent.) If you do consent, you will receive a joint interest billing that you might not be able to afford.
If you do not already have a working interest and from your confusion I think you probably do not, your interest should be pooled if not leased, if it's in Oklahoma as your profile leads me to believe likely. I think it likely that a mistake has been made.
I saw elsewhere where you asked if you should participate. Sandridge has had excellent performance overall but you won't be able to spread your risk over hundreds of wells as they do. Don't bet more than you can afford to lose, the odds may be in your favor but the house numbers come up occasionally also.
I also just received a "Participate or Not participate" AFE for well in McKenzie County, ND that was completed nearly a year ago because of approx. 25 acres our leasing company in 2004 accidentally left off of the lease. I'm told that not participate (non consent) is the best as it is already producing and I receive royalties on other mineral acres.
What I can't understand is the risk penalty 50% or 200%. I have read the NDCC but still don't know for sure. If I go Not Participate is my risk penalty 50%?