By Brad Caponigro · Founder, Pointer Petroleum LLC · Reservoir engineer
Published
Imagine a mineral owner whose grandfather, raised on a wheat farm in Mountrail County, left a small fractional mineral interest to his children in a 1986 will. Two generations later the heirs live in Minnesota, Arizona, and Oregon. They have never received a check, never signed a lease, never paid a tax bill on the minerals. One spring a certified envelope arrives at one of the three addresses — a Notice of Lapse of Mineral Interest from the surface owner, a working farmer who would like to clear the title to plant a new soybean rotation. Sixty days to respond, total loss if the deadline passes, and the other two heirs do not even know the notice exists. That scenario plays out somewhere in North Dakota every week. The statute behind it is short, the procedure is simple, and the window to preserve the interest is unforgiving.
North Dakota Century Code Chapter 38-18.1 — the Termination of Mineral Interest Act, enacted in 1983 — allows the surface owner of a tract to terminate a severed mineral interest under that tract that has been unused for 20 years. The procedure is statutory and runs through the county recorder, not the courts. If the mineral owner does not respond within the statutory window, title reverts to the surface owner and the mineral interest is extinguished.
The rationale was practical. By the early 1980s, North Dakota had a substantial inventory of small mineral fractions that had passed through multiple generations without anyone ever leasing or producing them. Title work for any new lease or development required tracing those fractions through decades of probate and conveyance, often across state lines, often to heirs who were unaware they owned anything. The statute gave surface owners — usually farmers and ranchers actually working the land — a way to clear the title for the limited subset of severed minerals that were genuinely abandoned.
In practice, the statute has done much more than that. It has lapsed real interests held by real owners who simply did not know about the recording requirement. Bakken-era development from 2008 onward made many of those previously valueless interests suddenly worth meaningful money, and the resulting lapse-and-recovery litigation has shaped how the statute is applied today. The 20-year lookback continues to roll: an interest that survived a lapse attempt in 2010 can be lapsed again in 2030 if no qualifying use occurs in the interim.
The statute defines use broadly enough that most legitimately active interests are safe, but narrowly enough that purely passive ownership is not. Qualifying uses during the 20-year lookback include:
Production. Any production of oil, gas, or other minerals from the tract, or from a unit including the tract, counts as use of the mineral interest in that tract. Production by an adjacent operator under a unit that includes the tract preserves the interest just as direct production does.
Leasing. A recorded oil and gas lease covering the mineral interest, signed by the mineral owner, counts as use during the term of the lease. The lease must be recorded in the county where the minerals lie. Unrecorded leases do not preserve the interest.
Payment of taxes. Payment of ad valorem property tax on the severed mineral interest counts as use. Most North Dakota counties do not assess ad valorem on non-producing minerals, so this rarely applies in practice.
Use for underground storage, geothermal, or sequestration. Any of these statutory uses counts.
A recorded Statement of Claim. The mineral owner can file a Statement of Claim under NDCC 38-18.1-04 in the county recorder's office. The statement must identify the mineral interest, state the owner's name and address, and be acknowledged. A Statement of Claim resets the 20-year clock on filing. This is the single most important preservation tool for owners of inactive minerals.
What does not count: passive ownership, payment of mortgages on the surface, occupation of the surface, paying surface real estate tax, or general affidavits of heirship that do not mention the specific mineral interest. An owner who has done nothing other than inherit and hold the interest is at lapse risk if the 20-year clock runs without one of the qualifying uses occurring.
When a surface owner believes the 20-year non-use period has run, the lapse process under NDCC 38-18.1-06 is:
1) The surface owner conducts a title check to identify the record holder of the severed mineral interest. The check must be reasonable — not exhaustive, but enough to identify the holder of record at a current address if the owner can be found through routine search.
2) The surface owner sends a Notice of Lapse of Mineral Interest by certified mail to the mineral owner at the address shown in the public records. If the address is unknown after a reasonable search, the surface owner publishes the notice in a newspaper of general circulation in the county for three consecutive weeks.
3) The notice must specifically describe the mineral interest, state that the surface owner intends to terminate it under NDCC 38-18.1, and inform the mineral owner of the 60-day window to file a Statement of Claim preserving the interest.
4) The mineral owner has 60 days from the date of mailing (or from the date of last newspaper publication, in the publication scenario) to file a Statement of Claim with the county recorder. If a Statement of Claim is recorded within the 60-day window, the lapse attempt fails and the interest is preserved (and the 20-year clock resets).
5) If no Statement of Claim is recorded within 60 days, the surface owner records an Affidavit of Termination of Mineral Interest with the county recorder. The mineral interest is terminated and merges with the surface estate as of the recording date.
The procedure is technical and the case law on what counts as a "reasonable" address search has shifted over time. Surface owners who skip the title-search step or who send notice to a stale address have had termination affidavits set aside in subsequent quiet-title actions. Mineral owners who receive Notices of Lapse should treat them as time-sensitive: 60 days runs fast, and the consequence of inaction is total loss of the interest.
A Statement of Claim filed under NDCC 38-18.1-04 is a short, formal document that preserves the mineral interest for another 20 years from the date of filing. It can be filed proactively (before any lapse notice arrives) or reactively (within the 60-day window after a lapse notice). Either way, the requirements are the same.
The statement must contain: the name and current address of the person claiming the interest; a description of the land subject to the interest sufficient to identify it (typically by section, township, and range, with specific aliquot parts); a statement of the nature of the interest claimed (full mineral interest, undivided fraction, royalty interest, etc.); the source of the claimant's title (e.g., "by inheritance from John Smith, deceased, whose estate was administered in [county] [state] in [year]"); and an acknowledgment by the claimant before a notary public.
The statement is recorded in the office of the recorder of the county in which the land lies. The recording fee is nominal (typically $20-$30). No court filing, no judicial proceeding, and no operator participation is required. The act of recording is the preservation.
For owners of inactive North Dakota minerals — particularly inherited interests in Bakken-era counties (Mountrail, McKenzie, Williams, Dunn, Stark, Billings, Bowman) — proactively filing a Statement of Claim every 15-18 years is the simplest and cheapest insurance against lapse. The cost of filing is two orders of magnitude less than the cost of a quiet-title action to undo a lapse, and three orders of magnitude less than the value of an unleased Bakken mineral interest at recent leasing levels.
A Notice of Lapse of Mineral Interest is one of the most time-sensitive documents a North Dakota mineral owner can receive. The 60-day window starts immediately. Practical steps:
1) Verify the notice. Confirm the legal description of the tract and the mineral interest claimed. Check the date the notice was mailed (or the last publication date, if served by publication). Calendar the 60-day deadline to the day.
2) Identify your interest. Pull your chain of title. If you inherited the interest, locate the probate or affidavit of heirship that vested it in you. If the interest was conveyed to you, locate the deed. The Statement of Claim must identify the source of your title.
3) Prepare and file the Statement of Claim. The statement is a one-page form available from most North Dakota county recorders and from oil and gas attorneys. Have it acknowledged before a notary, then mail it to the county recorder of the county where the minerals lie with the recording fee. The recorder will return a stamped copy with the recording date and instrument number. Filing well in advance of the 60-day deadline (not on day 59) is strongly recommended — recording offices have processing times, and a statement received before the deadline but recorded after may not preserve the interest.
4) Confirm recording. Once you receive the recording confirmation, save it permanently with your mineral records. The recording date is the new starting point for the next 20-year clock.
5) Consider whether the interest is worth holding. North Dakota minerals in active Bakken counties can be valuable; minerals in inactive areas may generate no leasing or production interest for the foreseeable future. If you preserved the interest under time pressure but have no intention of actively managing it long-term, the right move may be to plan a sale within the next year. Pointer Minerals purchases North Dakota mineral interests in every active county and many inactive ones. Recently preserved interests are easier to underwrite because the chain of title is current and the lapse risk is reset for two decades.
6) Consider also other tracts. Most owners with one ND mineral interest have several. Once you have done the work to file one Statement of Claim, run the same audit on every ND mineral interest you own. Filing a batch of Statements of Claim at one time is materially cheaper than running the same process individually as each lapse notice eventually arrives.
Several variations on basic mineral ownership have specific dormant-mineral implications in North Dakota:
Non-participating royalty interests (NPRIs). NPRIs are subject to the same 20-year lapse rule as mineral interests. The NPRI holder must record a Statement of Claim within each rolling 20-year window unless the NPRI has been used (typically through receipt of royalty payments under a producing well, which counts as use of the underlying interest). NPRIs in non-producing areas are at the same lapse risk as inactive mineral interests.
Term mineral interests. A term mineral interest (e.g., "for 25 years and so long thereafter as oil or gas is produced") that has expired by its own terms is not subject to NDCC 38-18.1 — it has already terminated by contract, and the surface owner does not need to invoke the dormant statute. But during the term, the interest is subject to the lapse rule like any other mineral interest. Term-interest holders should file Statements of Claim within the term to preserve against lapse.
Trust and corporate holdings. When a mineral interest is held by a trust, the trustee's name and address should appear on the Statement of Claim. A change in trustees, or a trust termination with distribution to beneficiaries, should be followed promptly by a fresh Statement of Claim in the new owner's name. Corporate holdings should be updated when the corporate name or address changes.
Unknown heirs and unprobated estates. The most dangerous lapse scenario is an inherited interest where probate was never opened, the heirs are unknown to one another, and no one has been managing the interest. These interests routinely lapse without anyone realizing the loss. If you have reason to believe you may have inherited North Dakota minerals — especially through a relative who passed away decades ago without an active probate — order a title search and confirm both the chain of title and the lapse history before assuming the interest still exists.
Twenty years. NDCC 38-18.1 allows the surface owner to begin a lapse procedure if the mineral interest has not been used for 20 years. "Use" includes production from the tract or a unit including the tract, a recorded lease, payment of ad valorem property tax on the mineral interest, or a recorded Statement of Claim. The 20-year clock rolls forward from the most recent qualifying use, so an interest that was used in year 2010 cannot be lapsed before 2030.
You have 60 days from the date of mailing (or last publication) to file a Statement of Claim with the county recorder of the county where the minerals lie. Do not wait. Confirm the notice details, locate your chain of title, prepare the Statement of Claim, have it notarized, and mail it to the recorder with the filing fee — well before the deadline so processing time does not run you over. If the deadline passes without a recorded Statement of Claim, the surface owner can record an Affidavit of Termination and the interest is permanently lost. Oil and gas attorneys in North Dakota handle Statement of Claim filings routinely for modest fees if you prefer not to do it yourself.
Yes — production of oil or gas from the tract, or from a pooled unit including the tract, counts as use of the mineral interest under NDCC 38-18.1-03. As long as production is ongoing, your interest cannot be lapsed. The lapse risk arises during periods when there is no production, no recorded lease, and no other qualifying use. For owners with previously producing interests where production has ceased and no replacement well is contemplated, the 20-year clock starts running from the cessation date — not from the date you stopped receiving checks.
Possibly, but the answer requires a title search. If a Notice of Lapse was sent and no Statement of Claim was filed, the interest may have been terminated and merged into the surface estate years ago. If no lapse procedure was ever initiated and the interest has had no qualifying use for more than 20 years, the interest is at lapse risk but has not yet been extinguished — the surface owner has to actually file the procedure. A North Dakota title attorney can run the chain in a few hours and tell you definitively whether the interest still exists. Pointer Minerals also runs preliminary title checks on potential acquisitions at no cost to the owner.
Yes, and this is the recommended best practice for owners of inactive North Dakota minerals. A proactively filed Statement of Claim resets the 20-year clock and provides clear public notice of your ownership. Recording fees are nominal, the form is short, and the protection lasts two decades. Owners of inherited or absentee minerals in Bakken-area counties who do not plan to actively manage the asset should file a Statement of Claim every 15-18 years as routine maintenance — far cheaper than reactive Statements of Claim under deadline pressure or quiet-title actions to undo a completed lapse.
Primary sources used in writing this article. These are not legal or tax advice — they are the public statutes, regulations, and authoritative materials the article draws from. Consult a qualified attorney or CPA before acting on any of them.
Ohio is one of the few producing states where inherited mineral rights can genuinely be lost to the surface owner through inaction. The Dormant Mineral Act sets out exactly how that happens — and exactly how heirs can stop it. If your family once owned minerals in eastern Ohio, the time to check is before a notice arrives, not after.
Mississippi mineral interests — Tuscaloosa Marine Shale royalties along the southwestern fairway, legacy Mississippi Salt Basin oil and gas across the south, and shallow conventional production scattered statewide — pass through estate proceedings under the Mississippi Code (Title 91) in the chancery courts. The defining institutional feature of Mississippi mineral practice is the chancery-court system itself: equity-rooted, county-based, and procedurally distinct from the common-law probate courts found in most other states.
Arkansas mineral interests — dormant Fayetteville Shale royalties across the Arkoma fairway, legacy Smackover oil and brine in the south, and the contemporary lithium-extraction pivot in the Smackover — pass through probate under Title 28 of the Arkansas Code Annotated. The defining feature of Arkansas mineral practice is the gap between the play’s 2008–2016 Fayetteville heyday and its current low-activity baseline, which routinely surfaces unaddressed succession gaps in inherited interests.
West Virginia mineral interests — dominantly Marcellus and Utica royalties in the northern panhandle and north-central counties — pass through estate proceedings under Chapters 41 (wills) and 44 (decedents’ estates) of the West Virginia Code. The defining feature of WV mineral practice is the layered nineteenth-century severance history: an estimated 1.3 million distinct mineral interests, many traceable to severances recorded in the 1880s–1910s, generate disproportionate curative volume per estate.