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North Dakota Court Rules on Abandoned Mineral Interests

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The North Dakota Supreme Court issued an opinion on August 6, 2015, styled Yesel v. Brandon, 2015 ND 195, holding that a non-participating royalty interest was not abandoned where the burdened mineral interest had been leased, pooled, and produced.   

In Yesel, a surface owner brought a suit to quiet title to a non-participating royalty interest under the abandoned mineral statutes, N.D.C.C. § 38-18-01, arguing that the interest had not been used for more than 20 years.  The non-participating royalty owner responded to the suit by asserting that non-participating royalty interests are not subject to the abandonment statutes, and that if they were, the interest had been used through the activities of the burdened mineral owners.

The Court sidestepped the issue of whether non-participating royalty interests are subject to the abandonment statutes and instead held that, even if they are, the activities of the burdened mineral owner in this case, who had actively leased the minerals, which were then pooled and being produced by two active wells, precluded abandonment.  The Court reasoned that the non-participating royalty interest owner lacked the ability to develop and produce the minerals himself and thus the activities of the burdened mineral owner were deemed use on behalf of the non-participating royalty interest owner.

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