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North Dakota Tackles Confusing Royalty Statements

by Elizabeth Alford on December 19, 2016

North Dakota mineral owners who are confused by complicated royalty statements may soon get some relief.

Related: Who Owns Mineral Rights Under North Dakota Lake?

The North Dakota Industrial Commission is moving to strengthen state requirements for royalty statements after a plea from recently retired legislator, Bob Skarphol. Skarphol want to require oil and gas companies to do a better job at explaining deductions and adjustments on royalty statements. He is hoping to replace the ‘convoluted and complex’ language that might confuse the average person.

North Dakota law already states that royalty statements must clearly identify the purpose of each deduction and that companies must provide an explanation of the deductions if the royalty owner asks for an explanation. The Commission is looking at ways to ensure compliance, including potential civil or criminal penalties when companies don’t comply.

Own minerals in North Dakota? Join the conversation here!

Gov. Jack Dalrymple, who chairs the Commission, expressed concern for how challenging it is for royalty owners to dispute deductions..

“They’re relying on the fact that the vast majority of royalty owners are not going to come after them. Somehow, we have to think about how to strengthen the position of the royalty owner in the whole picture to begin with. That would no doubt take some legislation.” – N.D. Governor Jack Dalrymple

If you have questions about whether your statements meets state requirements, you can contact the office of the Governor: (701) 328-8020.

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