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.