My cousins and siblings own acreage at T156N / R101W section 18 in Williams County. This is leased and we have been paid for production (and still are being paid). Original lease with Oasis, who was bought out by Chord. They recently drilled some more wells in 7, 18, 19 and have sent us a letter demanding a reply in 30 days as to whether we wish to “participate” in the well and all production costs, or “lease” our acres. To my knowledge only Section 18 is owned by us for these new wells and it is already leased. What are the chances that 1.They messed up, not realizing a lease was in place or 2. there are more acres that are unleased that we own and didn’t know about. They even did paperwork for the estimated costs for each well separately if we want to “participate”. It’s just weird. I am thinking they screwed up and don’t realize we already have a lease and just sent the paperwork in error. Some of the family is getting excited about it and I have emailed and phoned (as have my cousins) with no answer yet. Has anyone else seen this happen? Are there other reasons they may send this paperwork out? What are the legal ramifications if we just “lease” them again? I really have asked them to look into this and if we own more acres that we were unaware of, to please provide info. Info, ideas or comments or suggestions are welcome, thanks!!! Obviously, I’m a little impatient, but they put the 30 day deadline on us! TYVM!
First thing to do is to read the old lease to see (1) what depths were originally covered (eg surface to 5,000 feet or all depths) and (2) what depths or acreage were automatically released after the primary term and continuous drilling period. The lease may only hold “depths down to deepest depth drilled” so if old wells were 5,000 feet, then deeper depths are open. Or it may have only held 80 acres around an oil well so that remaining acreage dropped out as not being drilled or as wells failed. As to open acreage, someone with knowledge about ND law can advise you as whether ND has forced pooling or how unleased mineral owners are treated. That is a different category than becoming a non-op working interest owner who pays all costs. Are you sure that the new wells have already been drilled or is AFE prospective with estimated costs? It is likely that any lease presented in a high-pressure threatening situation will not be favorable to you as the mineral owner.
In ND they are horizontal wells and they aren’t treated the same as vertical wells with the different formations for production. The way we understand it they are tied up by the lease until 6 months after all production on the leased acres ceases.
We do have forced pooling I believe. What is AFE? The wells were spudded in March and April and show DR (drilling) status.
You need to review the specific language in your lease(s). Decades ago, many leases were all depth and held by any well. Newer leases contain provisions that undrilled deeper depths are not held by shallower wells. So it is possible that your minerals are open at depths below the current producing wells. This can happen whether the current wells are vertical or horizontal, where the new wells are deeper.
And read over the lease offer. It is for all depths or depths below XX feet? Is it for all the same acreage or for a part of the acreage? Is it for all family members or only for some members who did not execute the older lease? You can also ask the landman about the acreage and depths to understand what the situation is.
Are you already getting paid on the Melville 5601 12-18H? It was to the Middle Bakken TOP at 10,288 but the horizontal leg would have a longer Measured Depth number. I see a drop in production in June, so implies that the fracs started as they shut in the well to protect it.
Looks like they drilled the Goose 5601 12-7 2b, 3B, 4B horizontal wells. They spud back in March, listed as Drilled Uncompleted. No frac results reported yet, but they have three to do and ND may put a confidential hold on them. A bit strange that Oasis would wait this late in the game to contact you.
They may have “messed” up, or they just used a form letter to see if they could get more working interest owners to help pay for the three wells. If you can lease again, pick the highest royalty as these look like they are infill wells. Keep bugging the agent for details before signing anything.
AFE stands for Authorization for Expenditure. It is the proposed budget for the well.
Yes, the Melville and the Devon we are being paid for. I guess we thought that with horizontal drilling the “depth” factor disappeared unless it was specified in the lease. I can’t find the lease this minute but I’m pretty sure no depth limits were put in there. Back then we didn’t know about other formations like the Three Forks. And our leases didn’t specify a depth because we became aware of the other formation years after the leases were signed. And it is the Goose wells they are talking about but there could be issues with Roosters in the neighboring sections too as its the same lease, same owners, same drilling, etc. Those darn birds!!! lol They did offer 18% production and a nice bonus, but I would be asking for more as I feel 20% is in the ballpark. Oh and thank you for researching this as much as you did. I appreciate that so much!!!
The lease offer is the problem because no acreage is specified. So many oil companies want to “buy” your acres, but when you ask how many (I know) they haven’t a clue. Had they specified the acres in each section it would have been helpful for certain. I mean if you are offering to lease, you should have the total lease acres figured out. It was a “sample lease” and not an actual lease. No depths were addressed in prior leases and no relatives were left out of this communication. We all worked together on our lease. I will await more info from them.
I do not see any leases filed in Section 18 156N-101W in the last five years (since there is already production), so I think this is more of a Working Interest letter instead of a lease. Did they send the draft lease or just a letter? Try to get a straight answer out of them.
I posted some of the letters, deleting identifying info. I noticed that they call this a VERTICAL well. In ND they are typically horizontal wells, so now I am wondering what the heck that means. I’m usually pretty good about this stuff, but this is confusing me. Since they want to go through 3 sections it HAS to be a horizontal well so why would they use the lateral terminology??? THANK YOU!!!
In oil and gas well, the lateral reference is to the horizontal wellbore. Most companies will list the total length from spud on top to the toe of the well (both vertical and horizontal combined). You need to #1 Read your existing lease to see the legal descriptions of the tracts and to make sure that it does not reference depth (that is the vertical depth and not the horizontal leg). If you do not have a copy, get one from the recorded deeds or from your relatives if you all signed the same form. #2 Send an email to the landman and ask him to explain what minerals are not under lease at this time, including whether or not the lease for some portion of the minerals expired. Cite your lease for his reference (best to include the recording information). He may then agree that the minerals are under lease and to forget the letter because someone did not do all the homework. An email is advisable so there is not misunderstanding and you can ask additional question. It is too easy for confusion to arise if it is just a phone call. #3 Make permanent files for all the related information on your minerals and wells. Deeds; leases; well data - permits, plats, completion information, etc.; royalty data from checks. Good idea to scan to your computer too.
@Well_Wisher I am the Division Order Supervisor at Chord, it appears that there may have been some title busts and there were several owners that had to be balloted late. Reach out to us on Monday and we can get you some answers. I am looking at the list of names and recognize many of them as having title issues.
Not having all of my data here to look at, and of course not wanting to put too much data in a public forum makes it difficult to handle right now. But please, email ownerrelations@chordenergy.com and let them know that the DO Supervisor asked you to reach out and they will forward your info to me.