An operator just called me. He wanted to know if there is a law that requires the operator to notify the non-consenting party the well paid out.
IF the Operator has a Joint Operating Agreement with the non-consenting party, then in all likelihood, they are required to send a monthly statement of payout status to the non-consenting party. Ask the Operator to read their Joint Operating Agreement if there is one. Also included in the Operating Agreement would be percentage penalty or in the extreme, loss of interest and acreage as a penalty for going non-consent.
I know of no such legal requirement. I would think that the burden in absence of an JOA would be upon the non-consenting party.
If you are talking about a co-tenant and not a non-consenting party (which term was coined and defined in Joint Operating Agreements), then I would hazard a guess that if the Operator wanted to do the right thing, they would notify the co-tenant and place them in line for payment. That was how it always worked for me when I had a non-JOA interest and did not participate.
Best,
Buddy Cotten
Buddy,
Great reply! You were right on target.
The client had a co-tenant with a non-JOA interest who did not participate - now the well paid out.
I'll let him know it is okay to place the party in line for payment.