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As first reported by the North Dakota Monitor, North Dakota oil companies are withholding hundreds of millions of dollars from private mineral owners through deductions that critics call unfair.
Diana Skarphol’s family received monthly royalty checks for over 60 years until Hess Corporation began deducting about 35% in 2015. The Tioga family has lost nearly $138,000 over the past decade to cover transportation and processing costs.
Companies claim they can deduct expenses after a 2009 state Supreme Court ruling, while mineral owners argue their leases promised payments “free of cost.” An investigation found companies typically withhold 20-50% of royalties, potentially costing private owners up to $1 billion annually.
The state protects its own mineral rights by prohibiting deductions in government leases, but lawmakers have repeatedly rejected similar protections for private owners despite their advocacy efforts.
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