Miss SC they are surveying your land looking for the spot to put the well. If they don’t have a surface use agreement, your permission or a court order they are trespassing. I would be videotaping them while I tell them to leave and calling law enforcement.
Miss SC, a fill in the blank lease may be a ploy. Many people have no idea of what their minerals may be worth and will ask a lot less than the lessee would be willing to pay.
If I havent signed any oil leases, why would a oil company send a survey truck and they had this tripod thing and then put stakes in the ground with this Info: WLS Control# 6 and two stakes with WLS Control#5 crossed like an X in the ground?? what does this mean? and isnt it illegal to go onto someones land without their permission?? plus this is Posted with a sign that says No trespassing. I have called certain land departments and someone is looking into it. I would like to know what those stakes mean?? Thanks
My sister “M” and I own an undivided surface and mineral acreage, 50/50 land and minerals. My other sister “Jo” owns another separate piece of land and minerals—not completely sure but think it’s 320 acres for Jo and she’s the only owner. The name of the oil drilling company is Sampson. This is located in Roosevelt County, Montana. I’m going to read more about forced pooling.
I do have minerals in North Poplar and found out the lease was locked into a CA/communitization agreement way back in the 1950s, so the royalties I receive are under a 12% royalty rate. As long as there is oil being produced, the lease never ends. I don’t know how this happened, but it was done back in 1950. The excuse some of these newer oil companies coming in to explore eastern Montana is that the area is “unproven” and that is why their offer of $50/acre last year was made, but I’m thinking, if there have been oil wells since the 1950s in this same county, just east of the area they now want to drill, and lands south and lands to the east have already been “proven,” why would they want to get low offers and force people into signing? Some other companies have offered $400/acre and up already. I just hate to sign anything because my land is farmland and so is my sister’s land.
Miss SC,
If you don’t mind me asking how many acres is the parcel you and your sister share? And is your other sister’s share adjacent to yours? A drilling unit (DU) for this kind of exploration is often 640 acres.
I am no expert, but I am not sure large acreage like what you are suggesting you/family has may not be able to be force pooled. Others on this site will need to speak more specifically to that.
So based on what you have said, it seems that you own the minerals and have not leased them at the site where the surveying has occurred. It then means that they are trespassing and owe for damages to the fence. It could be a strategic ploy to get you to sign—trying to “scare” you into giving up, giving in and signing. But legally, it would appear they have no right to be on the property.
Now you also asked: why would they want to get low offers and force people into signing?
That is just how it works. The first wave of lease activity will be low and even as some offers are climbing low offers will always exist. That is because not everyone comes to this or similar website to get educated or even talks to their neighbors so they don’t know what is fair and what isn’t. The trouble with a low sign bonus is two-fold; 1. you don’t get as much money, of course and 2. the cost of entry into leasing is low; which means flippers and producers can be in the leasing mix—and trust me they are both in the mix. I always advise people to not invest with flippers (people that are only leasing for the purpose of selling the leases at a profit). Who is a flipper—often hard to say? Is Sampson? Don’t know, but I always suggest that people do a lot of investigation to be POSITIVE who they are leasing with and what their intentions are.
Be cautious, thorough, get educated and take your time.
Good luck,
Wilson
Thanks for your reply RW, a certain company that has offered a lot of people in the area where my land is, the offer was $50/acre last year. I never did sign anything because only my sister and I own this acreage while others around us had signed. Now there are 3 or 4 horizontal drilling rigs (spudded now) along Highway 2 and this company wanted to put one more drilling location north of my land and had told my other sister that if she didn’t sign, they would be able to drill under her land anyway and tried to get her to sign a paper saying if they did this they would not pay her anything and if oil is there she would get no profit. They’ve tried for 2 years to get her to sign and even gave her a lease paper that had a blank area where the bonus per acre should be; this person told her to put in any amount she thinks?? Something is really fishy with this oil company. And how would we know if they are doing horizontal drilling under our land other than seeing the oil equipment north of our land? My sister did take pictures because they also cut her fence to her land.
If you and your sister are the sole mineral interest owners for the minerals under your land (and by that I mean in a full 640 acre section), and if you haven’t signed, then the oil company can’t drill on it or under it. This is strictly regulated by the ND Oil and Gas board through spacing requests.
However, if there are other mineral owners for the oil and gas on your property, or if you and your sister say own a 10 acre partial out of a larger 360 section, and you own a minority, they can drill whether you like it or not. However, most operators will get a surface agreement with the surface owner even if the surface owner has no mineral rights, to avoid headaches.
Miss SC, those leasing may not be reselling the leases, it’s a lot cheaper to be in the oil business if you participate in someone else’s well. They may not be able to cough up $9 million to drill their own well but they may be able to scrape together $900,000 to participate in someone else’s well for 10% risks and profits. The actual driller would make nothing from that 10% of the well. The operators have net wells just as mineral owners have net acres. 10, 20, 30 and 40% in 4 different wells would equal a “net” well.
My relatives and I have signed leases with “Baseline Minerals, Inc.” out of Denver. 920 gross acres 34 North, Range 55 East
Section 08: W2, NE Section 9 W2, W2NE, SWSE I was the last to sign up so… I went with the program 350 acre and 18.5%. We also have minerals in ND yet to be leased.
But after being on here and letting my fingers google everything regarding the Bakken, and trying to call Baseline Minerals I believe they are co-lessee with a drilling company. Does anyone know how to find out who they work with? I have left messages with my landman and the corporate office… no return phone calls. Their checks were good.
As for an Attorney referral I have a local contact in Plentywood O’Toole Law Firm. This does happen to be a great uncle of mine, per our phone calls seems extremely up on the area being a lifetime resident and a lawyer just thought I’d throw it out there.
Todd:
As you know, Baseline Minerals, Inc. is a brokerage firm leasing for an oil company. Sounds like you have already leased to them but one way to learn who they are working for is to hold out on signing a lease until that question is answered. I just recently leased some acreage in ND and the broker agent told me up front whom they were working for. I have spoken to Mike O’Toole in the past and he seems very up to date on the Sheridan County area. If I were you, I would pose this question to Mr. O’Toole because if he doesn’t know for sure, then he will most likely have a good idea who this broker is representing.
This is a puzzling matter, I will try to explain. My dad, when he was alive, turned his minerals over to me and my siblings. This form, a quit claim deed, was filed at the courthouse in McKenzie County, North Dakota in 1996. It included Sections 31 and 32, Range 99, Township 152, along with other minerals in different sections. I am puzzled only by Sections 31-32 as I thought and there are papers saying he sold those minerals in 1990. The quit claim deed I have lists our ownership of the minerals as all, whereas he sold only lots in 1990. What is the true ownership of these sections as the paper saying we own them has been recorded? Boy, any help on this is greatly appreciated. P.S. I did contact Kodiak, who is the drilling company on those sections last week and cannot get a response from them yet–Thanks a lot–ARDIS
Ardis:
Did you and your siblings sign a lease with Kodiak? If you did, what areas did you lease them? If these two sections were leased under your names and recorded at the County Clerk’s office you would have a legal lease on file and you and your siblings would be subject to receive royalties from these sections.
Ardis,
What minerals you and your siblings control will be determined by what the quit claim deed from your father reads and then by what he had the right to give on the date of the quit claim deed. You might consider doing some courthouse work to really know what your rights are. If you or your siblings or your father have been contacted with a lease proposal, that letter may give you a rough indication of what the offering company thinks you all control.
You need to find out what the recording statute is in North Dakota.
Maybe the guy that bought it in 1990 didn’t record it. Depending on ND law you might be able to record and then file a quiet title action.
You’re hoping ND is a “Race” state, I believe.
Thank you all for your answers. My dad passed away in 1998. In 1994 dad gave me power of attorney over all of his goods, including minerals. We have not signed nor have me or my siblings been offered a lease on these 2 sections, which has me concerned. We have 5 other sections in McKenzie County that we signed a lease with Lonetree out of Williston. On those sections Kodiak bought out all of North Plains Energy’s leasings. Kodiak has a well on one of our sections at that location. I have been told by a lawyer in Sheridan that Kodiak is the operator in Section 31-32. What could have happened is like you say, they did not file or those 2 sections were included in the QCD and should have not been. We all live in Colorado, so can’t just go to the courthouse, but after hearing what Kodiak says, we may have a lawyer check into it. Andrew, what is a “race” state? I never heard the term before. Again, thanks ARDIS
Race state…first one to record wins…not many states left like that.
between two bona fide buyers.
That was my guess… you should be able to assist them in “making good” on the bonus… but the lease is a signed lease… and your estate lawyer should be able to help you out with the bonus I would think.
Thanks for the comments. Shale will not budge from the 5 years extension. The way my sisters and I are looking at this is that we really need to sign a lease now because of our age and health issues. We’ve owned these mineral rights for 17 years and have received zip. So a bird in the hand is worth two in the bush. Hopefully in 5 years we’ll be “rollin’ in the dough” with royalty payments. If not, “c’est la vie.” I really appreciate this site and the advice. It’s exciting times in the “Bakken.”
Howard:
I’m not familiar with the Wibaux County area but I will guess that it is an undeveloped region and operators are looking to test the area. The low bonus of $30/acre is another indication of this scenario. You have two choices: the first is to lease and pocket the money and live with the 1/8 royalty over the next 5 years (which is too long to negotiate for). The second is to play the waiting game and see what develops in this area over the next couple of years as exploration expands. If a good well is drilled during that time and the area becomes active, your minerals will be worth much more and your negotiation power will increase dramatically. I prefer the second choice as I have been in the leasing business for a number of years and have seen areas which were undeveloped turn into gold mines, as in the case of Western ND. The leases in ND which are currently bringing $1,800 - 2,500/acre with a 20% royalty, leased for as little as $100/acre with a 1/8 royalty back in 2008. The choice is yours but if you’re not in need of instant cash, wait around and see what happens. The area must be of interest or Petro-Hunt would not be contacting you. Good luck!!
Howard, glad you got an offer. Wibaux County is ‘on the fringe’ of the play but it has been getting some attention and may have potential.
Though I’d agree with the others. If you really need $1500 then you might consider their $30 offer. However a year or two of patience will probably pay off and see the offers rise as things develop. Also 1/8th is too low for royalty there or anywhere. An 1/8th was the old industry standard but I’d push for 1/6th or even 15%, even on a true wildcat situation.
Wilson, Petro-Hunt is an active oil company not a broker. In that area (Wibaux & Dawson County) they’ve already drilled a few wildcats on formations besides the Bakken.