The North Dakota Supreme Court recently clarified how to interpret fractional-interest clauses in mineral conveyances and further confirmed that the lessee of an oil and gas lease is a necessary party for quiet-title actions concerning the ownership of leased minerals. The decision is especially important on the latter point because the necessity of joining a mineral lessee remains unsettled in many oil and gas jurisdictions.
In Gerrity Bakken, LLC v. Oasis Petroleum North America, LLC, the court confronted two issues of first impression in the state. 915 N.W.2d 677 (N.D. 2018). First, the Gerrity court addressed whether a lessee is a necessary party to a quiet-title action. Next, it addressed the issue of how to properly construe two conflicting fractions within the granting clause of a deed. The court held (1) that a lessee is a necessary party and (2) that it must multiply the two conflicting fractions together to determine the mineral interest conveyed by the deeds at issue.