Non-Participating Royalty (NPRI)

An NPRI is a royalty carved out of the mineral estate that pays like a mineral interest but votes on nothing, no leasing say, no bonus negotiation, just a right to a share of production income.

We run into NPRIs most often on older Bakken deeds where a prior owner sold the mineral rights but reserved a royalty fraction for themselves, or where an estate split the executive rights from the income rights between different heirs. The NPRI holder collects their share of royalty once a well produces, calculated the same way any royalty is calculated, but has no ability to negotiate lease terms, decide whether to lease at all, or receive any lease bonus. That authority sits entirely with whoever holds the mineral estate's executive rights.

This distinction confuses a lot of owners who assume any oil and gas interest comes with some say in what happens on the ground. An NPRI genuinely doesn't, and understanding that upfront avoids a frustrating conversation later when an NPRI holder calls a landman expecting to negotiate and finds out they're not the one with that authority.

How an NPRI Gets Created

Most commonly, a mineral owner sells the underlying mineral rights but reserves a fixed royalty fraction, say a 1/16th non-participating royalty, out of the conveyance. The buyer gets the mineral estate and all executive rights, including leasing authority and bonus, while the seller keeps a permanent right to that royalty fraction on any future production. We've also seen NPRIs created through estate planning, where a parent wants to pass income rights to one heir while leaving leasing control with another, or through a straightforward NPRI deed sold independently of any other transaction.

Because the NPRI is carved from the mineral estate rather than granted alongside it, its size is fixed at whatever fraction the deed specifies, and it doesn't grow or shrink based on later transactions involving the mineral estate itself.

What Shows Up on Your Division Order

Your NPRI translates into a specific decimal interest on the division order tied to the well's production, calculated from your fractional royalty and your share of the spacing unit. It behaves exactly like a royalty check from a mineral interest in terms of payment mechanics, subject to the same decline curve and price swings, the only difference is upstream: you had no say in whether that well got leased or drilled in the first place, and no bonus payment when the lease was signed since you didn't hold the executive right to negotiate one.

If the mineral owner negotiates a favorable lease with a strong royalty rate, that benefits your NPRI too, since your fraction applies against whatever royalty rate the lease actually specifies. A poorly negotiated lease affects you the same way it affects the mineral owner.

Selling an NPRI

NPRIs are bought and sold on the same basic logic as mineral rights, valued against production history or, for undeveloped acreage, against the odds of future drilling in the unit. The pool of buyers is somewhat smaller than for full mineral rights, since an NPRI buyer never gets leasing control no matter how much of the interest they acquire, which some buyers weigh into their offer. It's still a legitimate, liquid asset class in an active Bakken spacing unit, and worth valuing on the same core-versus-flank basis as any other interest in the play.

Confirming the Fraction Before You Rely On It

The exact language in the deed that created your NPRI matters more than most owners assume. Some deeds specify a fixed fraction of total production, while older or poorly drafted ones use ambiguous language that's led to real disputes over whether the NPRI is a fraction of royalty or a fraction of production, two different numbers that can produce meaningfully different checks. If your NPRI deed is decades old, it's worth having the language reviewed rather than assuming the division order's calculation is automatically correct.

We've seen NPRI disputes over exactly this kind of ambiguous drafting, and resolving it before a sale avoids passing an unclear title position on to a buyer, which tends to depress what they're willing to offer.