The statement your operator owes you

Under N.D.A.C. 43-02-06-01.1, within 120 days after the month of first sale, and again after any change to the spacing unit or to your decimal, the operator or payor must give you a statement identifying the spacing unit, the effective date of the change, your net mineral acres, the gross mineral acres in the unit, and your decimal interest.

Why those four numbers are the whole game

A royalty decimal is not a mystery. In the ordinary case it is your net mineral acres, divided by the gross acres in the unit, multiplied by your royalty fraction. Three of the four inputs are on that statement, and the fourth is in your lease.

Which means that with the statement in hand you can check your own decimal in about ninety seconds, and you can tell the difference between a decimal that changed because the unit changed and a decimal that changed because somebody made a mistake. Without it you are looking at a number on a check stub with no way to test it.

This matters more in the Bakken right now than it has in years, because units are being resized constantly. See the second decimal.

How to ask

Call the operator's owner relations or division order department and ask for "the ownership interest information statement required by North Dakota Administrative Code 43-02-06-01.1." Citing the rule matters. It moves the request from a favour to an obligation, and the person answering the phone will know what you mean or will find someone who does.

Ask in writing as well, and keep the copy. Our free letter templates cover this kind of request, and you can find the operator's current address and phone in our operator directory.

What else North Dakota already gives you

The statement is one of four protections, and they work well together.

• Twelve items on your check stub. N.D.A.C. 43-02-06-01, under N.D.C.C. 38-08-06.3, sets out what has to appear on the stub or an attachment. A violation is a class B misdemeanour. See the statement decoder.
• A right to inspect the records. N.D.C.C. 47-16-39.2 lets you inspect and copy production and royalty payment records on written notice. If you are refused, or ignored for 30 days, you can sue to compel, and a prevailing owner recovers court costs, inspection expenses and attorney's fees.
• They cannot hold your money over a division order. N.D.C.C. 47-16-39.3 states that royalty payments may not be withheld because an interest owner has not executed a division order, and that a division order may not alter or amend the lease. See division orders.
• Interest runs automatically. Royalties are due 150 days after production is marketed, and late payment carries 18 percent per annum under N.D.C.C. 47-16-39.1, without you having to ask for it.

If asking does not work

Use the ombudsman before you use a lawyer. The North Dakota Royalty Oversight Program, run by the state Department of Agriculture, is free, keeps your identity confidential, and responds to a mineral owner within two business days. It will not take up a matter already in regulatory review or litigation, or an issue older than six years.

(701) 328-5110, option 1, or [email protected].

Most states have nothing like this. If you own in North Dakota and something on your check does not add up, it is the cheapest first call you can make, and it is not ours.

Related

• The second decimal, when a new unit covers your old one
• Flared gas royalty in North Dakota
• North Dakota versus Montana
• The royalty statement decoder and division orders
• Free letter templates and the operator directory
• Royalty payment laws by state

Rules and statutes cited: N.D.A.C. 43-02-06-01 and 43-02-06-01.1; N.D.C.C. 38-08-06.3, 47-16-39.1, 47-16-39.2 and 47-16-39.3. Berlin Royalties is a mineral buyer and a landman shop in Tulsa, not a law firm. This is general information about published rules, not advice about your interest.