North Dakota Royalty Payment Law: Deadlines, Interest and Owner Remedies

North Dakota royalty payment rules at a glance

First payment deadline

North Dakota does not set a separate first-payment deadline. The statute makes royalties late (and interest-bearing) if not paid within 150 days after the oil or gas is marketed. A separate rule requires an ownership interest statement within 120 days after the end of the month of first sale.

If the operator fails to pay royalties to the mineral owner within 150 days after oil or gas produced under the lease is marketed and cancellation of the lease is not sought, interest accrues on the unpaid royalties. (N.D.C.C. § 47-16-39.1(1))

Statute text “If the operator under an oil and gas lease fails to pay oil or gas royalties to the mineral owner or the mineral owner's assignee within one hundred fifty days after oil or gas produced under the lease is marketed and cancellation of the lease is not sought”

The same 150-day period applies to royalties owed to an unleased mineral interest owner, measured from when production is marketed from that owner's mineral interest. (N.D.C.C. § 47-16-39.1(1))

Statute text “if the operator fails to pay oil or gas royalties to an unleased mineral interest owner within one hundred fifty days after oil or gas production is marketed from the unleased mineral interest owner's mineral interest”

Within 120 days after the end of the month of first sale from a well, the operator or payor must give the mineral owner a statement of the spacing unit, net and gross mineral acres, and the owner's decimal interest. (N.D. Admin. Code § 43-02-06-01.1)

Statute text “Within one hundred twenty days after the end of the month of the first sale of production from a well or change in the spacing unit of a well or a decimal interest in a mineral owner, the operator or payor shall provide the mineral owner with a statement identifying the spacing unit for the well”

Later payments

The 150-day rule in N.D.C.C. § 47-16-39.1 is not limited to the first payment; it applies to royalties on any oil or gas marketed under the lease. The statute sets no shorter separate deadline for ongoing payments.

Royalties not paid within 150 days after the oil or gas is marketed bear interest; the statute does not distinguish first from later payments. (N.D.C.C. § 47-16-39.1(1))

Statute text “within one hundred fifty days after oil or gas produced under the lease is marketed and cancellation of the lease is not sought”

Minimum payment and aggregation

If the aggregate amount owed is less than $50, the operator may pay semiannually, remitting six months of royalties together.

If the aggregate amount is less than $50, the operator may remit the aggregate of six months' royalties semiannually. (N.D.C.C. § 47-16-39.1(1))

Statute text “If the aggregate amount is less than fifty dollars, the operator may remit semiannually to a person entitled to royalties the aggregate of six months' monthly royalties.”

Interest on late payments

Royalties unpaid after the 150-day period bear interest at 18% per annum until paid, for a leased owner where cancellation of the lease is not sought, and for an unleased owner. The section does not apply to leases on minerals owned or managed by the Board of University and School Lands, to owners taking in kind, where a title dispute would affect distribution, or to an owner who cannot be located after reasonable inquiry (see suspense). The owner does not have to request the interest. The statute does not say whether the interest is simple or compound.

After the 150-day period, the operator must pay interest on unpaid royalties at 18% per annum until paid, without the owner having to request it. (N.D.C.C. § 47-16-39.1(1))

Statute text “the operator thereafter shall pay interest on the unpaid royalties, without the requirement that the mineral owner or the mineral owner's assignee request the payment of interest, at the rate of eighteen percent per annum until paid”

Suspense and withheld payments

The payment-and-interest section does not apply when owners take in kind, when a title dispute would affect distribution, or when a mineral owner cannot be located after reasonable inquiry; undisputed owners must still be paid. Payment may not be withheld because a division order is unsigned. In a spacing-unit ownership disagreement, the developer must describe the conflict to the owner. The statute does not provide for interest on funds held for these excepted reasons.

Section 47-16-39.1 does not apply to owners taking in kind, where a title dispute would affect distribution, or where a mineral owner cannot be located after reasonable inquiry; undisputed owners must still be paid. (N.D.C.C. § 47-16-39.1(1))

Statute text “This section does not apply if mineral owners or their assignees elect to take their proportionate share of production in kind, in the event of a dispute of title existing that would affect distribution of royalty payments, or if a mineral owner cannot be located after reasonable inquiry by the operator; however, the operator shall make royalty payments to those mineral owners whose title and ownership interest is not in dispute.”

Royalty payments may not be withheld because an interest owner has not executed a division order. (N.D.C.C. § 47-16-39.3)

Statute text “Royalty payments may not be withheld because an interest owner has not executed a division order.”

If the mineral owner and developer disagree over the owner's interest in a spacing unit, the developer must furnish a description of the conflict and proposed resolution, or the relevant part of the title opinion. (N.D.C.C. § 47-16-39.4)

Statute text “the mineral developer shall furnish the mineral owner with a description of the conflict and the proposed resolution or with that portion of the title opinion that concerns the disputed interest”

Section 47-16-39.1 does not apply to leases on minerals owned or managed by the Board of University and School Lands. (N.D.C.C. § 47-16-39.1(2))

Statute text “This section does not apply to obligations to pay oil and gas royalties under an oil and gas lease on minerals owned or managed by the board of university and school lands.”

Division orders

A division order directs the purchaser to pay in the stated proportions. It may not alter or amend the lease; any variance is invalid and the lease controls. Payment may not be withheld for lack of a signed division order.

A division order is an instrument directing the purchaser to pay for products taken in the proportions it sets out. (N.D.C.C. § 47-16-39.3)

Statute text “A division order is an instrument executed by the operator, the royalty owners, and any other person having an interest in the production directing the purchaser of oil or gas to pay for the products taken in the proportions set out in the instrument.”

A division order may not alter or amend the lease; a division order that varies the lease is invalid to that extent and the lease takes precedence. (N.D.C.C. § 47-16-39.3)

Statute text “A division order may not alter or amend the terms of the oil and gas lease. A division order that varies the terms of the oil and gas lease is invalid to the extent of the variance and the terms of the oil and gas lease take precedence.”

Owner remedies, notice and attorney fees

The royalty obligation is of the essence of the lease, and breach may support lease cancellation where the court finds the equities require it. Actions go to the district court of the county where the well is located; the prevailing party recovers court costs and reasonable attorney's fees. Owners may also demand, by written notice, to inspect and copy production and payment records, and may sue to compel inspection if the payor refuses or does not respond within 30 days. Where the Board of University and School Lands is the owner and wins such a proceeding, the court must also assess a civil penalty of $2,000 for each day the payor failed to send the records, accruing until the proceeding is started.

Breach of the royalty-payment obligation may be grounds for lease cancellation where the court determines the equities require it. (N.D.C.C. § 47-16-39.1(1))

Statute text “value thereof is of the essence in the lease contract, and breach of the obligation may constitute grounds for the cancellation of the lease in cases in which it is determined by the court that the equities of the case require cancellation”

The district court of the county where the well is located has jurisdiction, and the prevailing party recovers court costs and reasonable attorney's fees. (N.D.C.C. § 47-16-39.1(1))

Statute text “The district court for the county in which the oil or gas well is located has jurisdiction over any proceeding brought under this section. The prevailing party in any proceeding brought under this section is entitled to recover court costs and reasonable attorney's fees.”

Upon written notice, a royalty owner may inspect and copy the payor's production and royalty payment records for the lease. (N.D.C.C. § 47-16-39.2(1))

Statute text “A royalty owner, a royalty owner's assignee, or a designated representative, upon written notice, is entitled to inspect and copy the oil and gas production and royalty payment records for the lease of the person obligated to pay royalties under the lease or division order.”

To prevail in an action to compel inspection, the owner must show, among other things, that the payor denied inspection or failed to respond within 30 days of service of notice. (N.D.C.C. § 47-16-39.2(1)(d))

Statute text “The person obligated to pay royalties denied inspection of the records or failed to respond within thirty days of service of notice.”

If the Board of University and School Lands succeeds in a records-inspection proceeding, the court must also assess a civil penalty of $2,000 for each day the payor failed to send the royalty payment and production records to the board; the penalty stops accruing on the date the proceeding is initiated. (N.D.C.C. § 47-16-39.2(4))

Statute text “If the board of university and school lands is successful in any proceeding brought under this section, the district court shall allow the board to recover court costs; reasonable costs, fees, disbursements, and expenses incurred by the board in inspecting the copying the oil and gas production and royalty payment records of the person obligated to pay royalties under the lease; and reasonable attorney's fees. a. The district court also shall assess a civil penalty of two thousand dollars per day for each day the person obligated to pay royalties under the lease failed to send the oil and gas royalty payment and production records to the board in accordance with subsection 1. b. The civil penalty under subdivision a ceases to accrue on the date the proceedings are initiated under subsection 1.”

Check-stub disclosures

Every royalty payment must come with an information statement showing the amount of oil or gas sold and the amount and purpose of each deduction; violation is a class B misdemeanor. The Industrial Commission rule lists the required items, including well/lease identification, sales month, volumes, net prices, taxes, each deduction by type, decimal interest, owner's gross and net values, and a contact address that must answer certified-mail requests within 30 days.

Any person paying a royalty owner for oil or gas must provide an information statement identifying the amount sold and the amount and purpose of each deduction. (N.D.C.C. § 38-08-06.3)

Statute text “shall provide with the payment to the royalty owner an information statement that will allow the royalty owner to clearly identify the amount of oil or gas sold and the amount and purpose of each deduction made from the gross amount due”

Failure to comply is a class B misdemeanor. (N.D.C.C. § 38-08-06.3)

Statute text “A person who fails to comply with the requirements of this section is guilty of a class B misdemeanor.”

The required information must appear on the check stub or an attachment unless provided on a regular monthly basis. (N.D. Admin. Code § 43-02-06-01)

Statute text “all of the following information must be included on the check stub or on an attachment to the form of payment, unless the information is otherwise provided on a regular monthly basis”

The statement must show the amount and purpose of each owner deduction, identified as transportation, processing, compression, or administrative costs. (N.D. Admin. Code § 43-02-06-01(7))

Statute text “The amount and purpose of each owner deduction made, identified as transportation, processing, compression, or administrative costs.”

The statement must show the month and year during which the sales being paid for occurred. (N.D. Admin. Code § 43-02-06-01(2))

Statute text “The month and year during which sales occurred for which payment is being made.”

Oil price must be the weighted average net price per barrel received by the producer after all deductions. (N.D. Admin. Code § 43-02-06-01(4)(a))

Statute text “Weighted average price per barrel received by the producer for all oil sold during the period for which payment is made. The price must be the net price received by the producer after all deductions.”

The statement must show the owner's interest in sales from the lease, property, or well as a decimal. (N.D. Admin. Code § 43-02-06-01(9))

Statute text “Owner's interest in sales from the lease, property, or well expressed as a decimal.”

The statement must show the owner's share of sales value less taxes and deductions. (N.D. Admin. Code § 43-02-06-01(11))

Statute text “Owner's share of sales value less taxes and deductions.”

The statement must give an address for questions; a request sent by certified mail must be answered by certified mail within 30 days. (N.D. Admin. Code § 43-02-06-01(12))

Statute text “If information is requested by certified mail, the answer must be mailed by certified mail within thirty days of receipt of the request.”

Unclaimed royalties (escheat)

Mineral proceeds (royalties, overriding royalties, bonuses, delay rentals, shut-in and minimum royalties) unclaimed for more than three years after becoming payable are deemed abandoned, together with the owner's underlying right to receive them and later-accruing proceeds. The program is run by the North Dakota Department of Trust Lands' unclaimed property office.

Mineral proceeds unclaimed for more than three years after becoming payable or distributable, and the owner's underlying right to receive them, are deemed abandoned, together with any proceeds then owing and any accruing later. (N.D.C.C. § 47-30.2-04(16))

Statute text “A sum payable as mineral proceeds which has remained unclaimed by the owner for more than three years after it became payable or distributable and the owner's underlying right to receive those mineral proceeds are deemed abandoned. At the time an owner's underlying right to receive mineral proceeds is deemed abandoned, any mineral proceeds then owing to the owner and any proceeds accruing after that time are deemed abandoned”

Mineral proceeds include royalties, overriding royalties, production payments, bonuses, delay rentals, shut-in royalties and minimum royalties. (N.D.C.C. § 47-30.2-01(19))

Statute text “To pay resulting from the production and sale of minerals, including net revenue interest, royalties, overriding royalties, production payments, and joint operating agreements; or b. For the acquisition and retention of a mineral lease, including bonuses, delay rentals, shut-in royalties, and minimum royalties.”

Official unclaimed property search: North Dakota Department of Trust Lands, Unclaimed Property.

Sources

Last reviewed November 2, 2026.

• North Dakota Century Code, Chapter 47-16 (Leasing of Real Property), PDF created 2025-12-31 — North Dakota Legislative Branch, fetched November 2, 2026
• North Dakota Century Code, Chapter 38-08 (Control of Gas and Oil Resources), PDF created 2025-06-30 — North Dakota Legislative Branch, fetched November 2, 2026
• North Dakota Administrative Code, Chapter 43-02-06 (Royalty Statements), Industrial Commission; last amended effective 2020-04-01 — North Dakota Legislative Branch (Administrative Code), fetched November 2, 2026
• North Dakota Century Code, Chapter 47-30.2 (Revised Uniform Unclaimed Property Act), PDF created 2025-06-30 — North Dakota Legislative Branch, fetched November 2, 2026

Related guides

• Royalty payment law by state (comparison of the covered states)
• North Dakota mineral rights
• Suspended royalties: why you are not getting paid
• Division orders explained
• How to read a royalty statement
• Unclaimed mineral royalties

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