Oil & gas discussion group for those interested in Divine County, ND. Share your experience regarding lease bonus, royalty rates, drilling activity, and oil & gas news.
Ms. Wilcox, you need a lawyer. Please get a lawyer; I've had experience with what Diamond Resources will do when it suits them.
A message from Jack Prescott to all members of Divide County, ND on Mineral Rights Forum!
To Jack Prescott - or some reason this thread/comment does not show up on the active discussions.
"My Brother, Sister and I inherited mineral rights in Divide County. Two wells have been recently been put on our mineral rights. We have been waiting over a yaer for our names to be transfered with no results and soon royalties will be due. Any way to find out what is the hold up and is this common for this to take so long."
Has the estate been probated? Who is the executor? Was this a Irrevocable Trust? If so who is the Trustee? You are entitled to the answers.
I suggest you go to the ND Industrial commission Oil/Gas Division website. You can gather all kinds of info from the web. In addition, you may want to subscribe to the Divide County Journal which will give you weekly updates on what is happening in Divide County.
Diamond Resources is the broker. You need to find out who Diamond assigned the lease to. Once you find out who the producer is, you should call them and ask why you are not being paid.
I have a client with minerals in 163N, 97W. The acreage is small. Would $1000/acre and 18% royalty for a 3 year lease be a fair price in the current market for a near production lease favorable to the mineral owner?
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What is the approximate leasing bonus amount for sections around
T163N-R97W-S10?
Thanks!
North Dakota Probates can be found at:
http://www.ndcourts.gov/publicsearch/default.html
They do not provide detail but you will find out if the is a probate and
what stage it is in.
T163N-R97W
Working on a lease there right now.
Bakken hunter LLC offered 1000/acre and 3/16
Landsman is Richard Jones,
Watch out for lease clause that is an option to renew in 3 years at same rate. Options are worth money.
I have not confirmed with Bakken Hunter that he is representing them.
Hunt has a confidential permit in 161N 97W Sections 1 and 12. Is there anyone on the ground that can tell me if a rig has moved in? Thanks in advance for any info.
""Case No. 19581 ""T.163N., R.96W
""to allow up to eight horizontal wells to be drilled on
each of the 640-acre spacing units and up to sixteen horizontal wells to be drilled on each of the 1280-acre spacing units described above; and such other relief as is appropriate.
""
Bakken Hunter obviously sees something here. 16 wells would cost a about $100,000,000 . You don't even think about spending that kind of money without some reason.
This coupled with a recent record bid of $19,950 / acre bonus not in Divide county, tell me things are changing.
http://www.blm.gov/mt/st/en/prog/energy/oil_and_gas/leasing/leasesaleinfo/2013leasesaleinfo.html
Hi - We have three leases on five sections in southwest Divide County. A permit was recently taken out on one section. Isn't it usually many months from the time the permit is issued to the time minerals are gotten out of the ground? And what exactly happens if/when a payment is due us? Do we receive some kind of statement? Or does a check just show up in our mailbox? We're new to all this and have a lot to learn. :-)
Tammy, frequently permits are gotten far in advance but that does not have to be the case. The state will grant the permit without asking any questions. The state does not judge. Companies have obtained permits to drill in a spacing that another company has the majority leasehold and that second company has to protest the first company drilling. It is really quick and easy to get a permit. Permits cost $100, about 8 cents an acre for a 1280.
Mr. Riveland, I am sorry to say I think you wasting time and if you go forward, money. While the NDIC does not make laws, the law has given the NDIC oversight and control of such matters and I believe that the court would back them up.
In regards to the long and XXLong lateral wells, every acre in the legal spacing has the same status whether the well sits atop or the wellbore runs through it or if that acre is as far as it could possibly get from the well in the spacing and it being extremely unlikely that it is being significantly drained. All acres are equal just as if all acres were directly under the long lateral or xxl lateral wellhead.
The spacing at the time of your lease doesn't matter. Spacing is under the control of the NDIC and they can change it at will and will do so as long as the operator tells them it is to prevent waste or to protect correlative rights, usually the operators correlative right to your oil. I recently had a reason to contact the NDIC and as far as I can tell they don't know what correlative rights are, if you are not the operator.
Mr. Riveland, much of your problem stems from the grace period of one year. Most I have seen were not more than 180 days which would be generous, 90 days is commom and 60 days is reasonable. You said continuous drilling but does it say continuous drilling or does it say continuing operations? Continuing operations could be building a road, drilling a water well, building a pad or digging a pit, it does not necessarilly mean there is a rig on site with a bit in the dirt. I have even looked at one lease where the lessee stipulated that just the drawing of a permit would be considered continuing operations, which normally would not be considered continuing operations......but you could agree to anything and then that is the deal.
Don't get me wrong, you have my sympathy. I will even consider that the lessee could BE in breach, but I see you having to get the court to agree to your definitions of a number of things, before you can even get to the breach part that would really matter to you. Proving the breach would be no simple task either when all they would have to do is take a bill from some other work and scratch out the location and put your location in. You may even win eventually after a few years and $40k in legal fees. Don't ask me how I know, but in my case the points of law are already settled and everything I am going to assert are fact based on recorded documents, and it still isn't easy, the opposition is fighting tooth and nail. I doubt that any lawyer would take your case on contingency. If you run out of money in the middle of the case you automatically lose and you may end up owing the other side attorney fees. If they are continuing to drill wells at least 1 per year, you are at least getting more than alot of other people who have been held for decades with no new drilling.
Let me put it this way, after you returned an executed lease with a 1 year continuous drilling/continuing operations clause to the lessee and you accepted the money, I would say that you only had a 5% or less chance of prevailing in a lawsuit because the lessee was in breach. Mostly because you are fighting for oil/gas that is no longer yours, you own 0%, none of it. In the eyes of the law you sold all of it for the lease bonus with only the "mere chance" of reversion, retaining only a royalty interest in the sale of your oil. Ever hear of "Possession is 9/10ths of the law"? They really mean it in oil and gas.
If this does not dissuade you. I wish you good luck. This time I won't say let me know if I can help because I don't see any possible way I can. I wish it were not so.
Mr Riveland, If you intend to litigate, do not cash the check, that is basic to most litigation. Nobody has to return a division order in ND, to get paid or for any other reason, it is not required by law. The major problem is you have already agreed to the terms and conditions of the lease, and basically any way that the lessees lawyers can spin the language in the lease.
Second question, I'm unsure what you are getting at, please clarify if you can. Im sure you have a question but it came out as a statement, happens to all of when dealing with a complex issue.
Third question. To cut to the chase, either the lessee and the operator have already cut a deal for cash and an overriding royalty interest or the lessee can participate in the well according to the interest leased from you. I doubt that the possibility of picking up your acres after your lease expires, should it actually expire would be enough of a concern to delay the operator's drilling schedule. If that operator does not drill, parts of his leasehold could expire and he would face losing them. I suppose if you had 75 acres and offered the operator an extremely attractive toplease offer, just to snub your lessee, and the operator had at least a year to run on their own leases, they might be interested, but I don't see where that is going to help you greatly other than showing your displeasure with your lessee. I think if we are talking 20 to 50 net acres, it's a non issue. There must still be tens of thousands of acres in Divide that are still up for grabs, there is no reason for an operator to scheme to get some acres from someone else if the acreage is small or not critical to holding the majority leasehold. Keep in mind that "it's all money" The operator leases the acreage, drills a well that will at least pay for itself and the spacing. If the well does that only, the operator's profit will come from the appreciation in value of "his" held acres which he can drill at his leisure or sell/assign to someone else. This is the land grab.
I've got time, I will gladly help you process this. I am not going to engage in mean spirited devils advocate with you as my brother would with me because I understand what it is like to be hemmed in on all sides. I haven't read your lease so I can't even guess at a basis in law that might help you. I do know that you would have to find one that the other side can't argue away if you are to have even a small chance. As I said before though, you are going to have to have the definition of terms on your side and I am sorry to say that I don't think you will.
Mr. Riveland, spacings do change hands. Every operator wants to run things his way. One might drill a cheap 7 million dollar well where another may want to drill a 12 million dollar well and whoever controls the spacing is going to get to make the decision and any other interest in the spacing can assign their interest to the operator for cash and an override or pay their proportionate share for the well the operator in control wants to drill. Minority interests are along for the ride as the mineral owners except possibly for courtesy notifications.
Every once in awhile a minority acreage holding operator will try to pull a permit and drill, probably because their leasehold is expiring. The operator holding the majority interest will usually protest before the Oil and Gas board and with the larger leasehold they are the presumed winner before the hearing ever starts. Rarely, a minority leaseholder drills the well with the majority leaseholders blessing.
Any operator would like to increase his leasehold but how much trouble would they go to , to add your acres to their leasehold when the can probably pick up 50 acres somewhere else? The dynamic might change somewhat if we were talking about the better part of Mountrail, McKenzie, Williams or Dunn counties where conpanies bid against each other for state leases exceeding $11,000 an acre. To me it's irrational, they could BUY not lease 2 acres in a good area for the cost of a lease in the excellent area, or probably lease 5 acres in a good area for every excellent acre leased. As productive as the excellent ares are, I don't think they outproduce 5 acres in a merely good area. I don't think oil is a rational business.
I have a lease ending within a few days, located in Divide Co. 163N 97W, we have not been contacted for a new lease, can you tell me, is it okay to leave this open, wouldn't I want it leased? and whats the change, usually we were contacted six to nine months prior and get it leased and now nothing? Thanks
Rockhills, Bakken Hunter looks like the only game in town at the moment and they drilled some wells that look poor in section 26, in 2012 in that T&R. The old well from section 2 from 2006 could have been dismissed as less advanced completion techniques being the cause of it's low production, not these later wells. The fact that oil is there is proved, also the fact that the wells are not going to pay for themselves in a reasonably short period of time if not proved, at least seems likely.
The operator will probably want to drill your acres in the future but I don't see them under any pressure to keep them leased until they decide it's time because nobody is looking to lease them out from under someone and if they did, there are more acres just as good available within a few miles.
In 2010, they just didn't know as much. I still think you could lease it but it could be a decade before anyone wants to and there is no economic reason for the operator to keep you under lease for three or four lease cycles. Just my opinion and I wish I had something better to say.