Timing of Royalty Payment

[TheStockster]

Hello All,

We are fortunate to have mineral rights in a section where new wells (four) have been drilled. Based upon state records (North Dakota), the wells had little production in the first two months (indicated to be “flowback”). However, in November, the first real production occurred (look pretty good). I read or heard (can’t remember which) that an oil company has up to six months from the start of production to start paying royalties. Is this correct? Also, when payments start, will they be cumulative for the months not paid (i.e. - a larger amount)?

We have been trying to confirm we have rights to these wells (pretty sure we do), but the oil company says the title is not done (from a question back in November 2023). I am guessing they won’t pay anyone until title is cleaned up and confirmed. Anyway, we hope we have rights on these wells and will see results in the near term (next 2 or 3 months).

Thank you for any information you can provide!

[M_Barnes]

Think longer-It takes months to run the title on all of the mineral owners for a well. Then they will send out division orders to each owner. Each state has their own rules about timing of the first check. Some are 120 days after first sales; some are 180 days. The first check will be a cumulative amount for the months of production up until the check cut date. The next check will be a monthly amount . If you have a cloud on your title, it will have to be cleared up before you received payment.