It appears that Denbury Onshore ran 232 miles of CO2 pipe from Wyoming to the Montana State Line. Our family owns mineral rights in Township 6 60E. Has anyone heard of recent offers for leasing mineral rights/royalties in that area? Denbury plans on extending the CO2 pipeline to the Cedar Creek Anticline by 2016 or 2017 and will be fully operational by 2020 as per their annual report for 2013.
1 Like
Richard -
Denbury owns the Belle Creek Oil Field in Southeastern Montana as well as various fields/units along the Cedar Creek Anticline along the border of Montana and North Dakota.
The pipeline will be used to transport CO2 that will be used to flood these prospects for EOR. All of this acreage is currently under leasing and producing, so no additional leasing is necessary. Denbury isn't a company that typically takes many leases, they re-work older fields and substantially increase the production from their CO2 usage.
As to whether this affects nearby areas and whether or not other companies would try to move in ... I am not certain, but I wouldn't be buying a new car based on it.
Jeff - it appears that we hold a net revenue interest - not mineral rights. There are up to 22 wells currently pumping on these sections. Denbury is sorting out who the heirs are and how much stock my Great Grand Uncle held in a previous company that is now operated by Denbury. Are you familiar with net revenue interest? How does it work?
The official definition of a net revenue interest (NRI) is "A share of production after all burdens, such as royalty and overriding royalty, have been deducted from the working interest. It is the percentage of production that each party actually receives."
There are many factors that can come into play in the calculation of an NRI. Lease royalty rate, overriding royalties, and tract participation factors (when discussing a unit tract) are some of the big ones. It is hard to say without knowing what is actually happening on your property what plays into the calculation of yours.
In your situation I would say let Denbury do the necessary title work to straighten out your family's interests, unless it appears to be a significantly large interest, then it may be worth hiring someone to do the work for you so you know exactly what you've actually got.
Richard L Hertzenberg said:
Jeff - it appears that we hold a net revenue interest - not mineral rights. There are up to 22 wells currently pumping on these sections. Denbury is sorting out who the heirs are and how much stock my Great Grand Uncle held in a previous company that is now operated by Denbury. Are you familiar with net revenue interest? How does it work?
2 Likes
we just recieved notification this week from Denbury on “Intended Application for Approval of Enhanced Recovery Utilization” this week.
We are section 26 of Township 9N. range 58E.