Elm Coulee and the Montana side of the Bakken, plus a century of legacy production. Montana minerals never lapse, which is rare and valuable, and Montana withholds 6 percent of your royalty before you ever see it, which almost nobody explains.
Montana is the state where the Bakken era actually began. Elm Coulee in Richland County was the discovery that proved horizontal drilling and fracturing could produce oil from the Bakken at scale, several years before North Dakota's boom. Montana royalty owners are a much smaller group than North Dakota's, and there is essentially nothing written for them.
Berlin buys Montana minerals and royalties across the eastern Bakken counties and the legacy conventional fields. Two facts define Montana ownership, and both are worth knowing before you talk to any buyer.
Montana has never enacted dormant mineral legislation. Montana State University Extension states it directly: mineral ownership never lapses in Montana.
That is a genuinely valuable property of the asset, and it puts Montana with Wyoming and against Kansas, North Dakota, and Ohio, where a severed interest can be extinguished after a period of nonuse.
If you inherited Montana minerals from a grandparent and nobody has leased, produced, or recorded anything since 1948, they are still yours. No filing is required to keep them. The interest may be hard to trace and the estates may never have been probated, but the ownership itself did not evaporate.
That also means Montana has an unusual density of genuinely lost interests: royalties sitting in operator suspense and at the Montana Department of Revenue's unclaimed property division because nobody knows who the heirs are. See unclaimed royalties. If we find money that belongs to you, we tell you how to claim it and you keep it, whether or not you ever sell.
Montana requires remitters to withhold 6 percent of the net royalty paid to royalty owners, under MCA sections 15-30-2536 through 15-30-2547, and specifically MCA section 15-30-2538.
There is a de minimis exception: no withholding is required if the amount is under $166 in the current period, or under $2,000 if paid annually.
Two things owners get wrong about this.
First, it is not a fee or a tax you are simply out. It is a prepayment of Montana income tax, and you reconcile it by filing a Montana return. An out of state owner whose only Montana income is a modest royalty is frequently overwithheld and never recovers it, because they never file.
Second, when you compare Montana royalty income to North Dakota royalty income, you have to compare like for like. The Montana check arrives smaller. That is withholding, not a smaller royalty.
Montana's individual income tax has a top rate of 5.65 percent. Nonresidents are taxed on Montana source income. See taxes when you sell mineral rights, and talk to a CPA who handles multistate royalty returns.
MCA section 82-11-202 governs pooling within a spacing unit.
| Situation | Result |
|---|---|
| Refusing owner, unleased | Considered to own a landowner royalty equal to one eighth of their proportionate share of production, until costs are recovered |
| Nonconsenting owner, drilling and completion costs | Charged 200 percent (staking, site preparation, rights of way, rigging up, drilling, reworking, deepening or plugging back, testing, completing) |
| Nonconsenting owner, surface equipment | Charged 100 percent |
| Election period | 30 days after proper written notice by certified mail containing location, projected depth, anticipated costs, and spud date |
Now put that next to North Dakota, where an unleased owner pooled after July 31, 2009 receives the acreage weighted average royalty of leased tracts or, at the operator's election, a cost free 16 percent, and where the nonparticipation penalty for an unleased owner is 50 percent rather than 200.
Same Bakken. Same operators, in many cases. A state line, and materially different economics for an unleased owner. This is exactly the kind of fact that should be priced into an offer on Montana acreage, and in our experience never is.
If you are holding a Montana pooling or election notice, send it to Ask a Landman or text a photo to 918-984-1645. We will read it free and tell you what the deadline is.
We looked for a Montana Supreme Court decision adopting either the "at the well" rule or the first marketable product rule and did not find one. Montana does not appear in the standard multistate surveys of post production cost law.
Montana does have MCA section 82-10-103, which makes the obligation to pay royalties of the essence of the oil and gas contract and provides for interest on late payment.
So the honest statement is: Montana has no controlling rule, and your lease language governs. That is a less predictable position than an owner has in Wyoming, where the definition is statutory, or West Virginia, where the case law is strong and specific.
Anyone who tells you confidently that Montana operators may or may not deduct is telling you more than the law supports. Read your lease. Our royalty statement decoder explains what the deduction lines mean, and our letter templates include a certified mail demand for an itemized accounting.
Montana structures its production tax around an incentive for new drilling, which is unusual and which affects what a new well is worth versus an old one.
Authority is MCA section 15-36-304. Verify current tiers against the statute and the Department of Revenue before relying on specific numbers.
Last reviewed August 2026. Berlin Royalties is a mineral buyer and a landman shop, not a law firm or a tax advisor, and this page is general information rather than advice about your interest.
Also see our Bakken and Williston Basin page, which compares the Montana and North Dakota rules side by side.
Send a check stub, a lease, a deed, or just a county and a family name. Montana interests are often traceable even when the family has lost the paperwork entirely, because nothing lapsed. We will run the records, tell you what you own, tell you what it is worth and how we got there, and tell you honestly if you should keep it. Free, and no obligation.
The Elm Coulee field in Richland County was the discovery that started the whole Bakken era, and the play extends across Richland, Roosevelt, Sheridan, and Daniels.
A century of shallow production along the Rocky Mountain Front. Small checks, very long lives, and title chains from the 1920s that have never been cleaned up.
Southeastern Montana oil, sharing geology with the Wyoming Powder River, plus the long Cedar Creek trend running down toward the Dakotas.
The eastern Bakken counties are our focus, and we review interests across Montana including the legacy northwest fields.
Everything a Montana owner needs in one place: who owns what under state law, how royalties must be paid and by when, what a buyer can and cannot deduct, the tax treatment of a sale, and the deadlines that quietly cost people their minerals. Free, and no sign-up.
Read the Montana guideThe things owners here most often wish they had read first. All free, none of it gated.
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