I have 360 acres in the Bakken in North Dakota. Landmen tell me I have 45 “Net” acres and have offered a lease. The bonus is paid on the 45 acres but the lease states all 360 acres. What happens to the 315 acres that are left after deducting the 45 “net” acres. Are they then a part of the lease and can be used however the drilling company decides? Anyone know?
Sounds like you don’t own all of your mineral rights. I only own 35 acres but only own 50% of the mineral rights. I just singed a contract and it states 17.8 acres net. I am new to this so there are probably other reasons as well.
Thank you James. I wonder how one finds out about the other acreage. I am not a surface owner, only the mineral rights. So, I thought that meant that I own the mineral rights to all 360 acres. I live in Oregon and have never been to North Dakota.
James M Miller said:
Sounds like you don't own all of your mineral rights. I only own 35 acres but only own 50% of the mineral rights. I just singed a contract and it states 17.8 acres net. I am new to this so there are probably other reasons as well.
Here in Elbert County CO, you can find out who owns the mineral rights from the county. On line I can search for property, put in natural resources and the section, township and range and find the two owners of mineral rights that are not current land owners. Since you are not the land owner, how did you get your mineral rights? If inherited there are probably relatives who own the other 7/8 (315 acres)
Thank you again, James. I will phone the county and see what I need to do. I inherited the mineral rights.
James M Miller said:
Here in Elbert County CO, you can find out who owns the mineral rights from the county. On line I can search for property, put in natural resources and the section, township and range and find the two owners of mineral rights that are not current land owners. Since you are not the land owner, how did you get your mineral rights? If inherited there are probably relatives who own the other 7/8 (315 acres)
Sharon,
how do you know you own 360 net mineral acres, who told you or how did you figure that to be the amount? I imagine it may be like most, they see a figure on a document like a deed or lease and for some reason believe that figure is what they own when in fact that figure is the acreage in that tract and actual ownership could be a fraction of an acre, it could be only one acre or it could be the entire amount. For instance a deed or lease states NW/4 of section x, that means there are 160 acres total in that tract. The original first owner may have kept a 1/2 interest then sold the rest to John Doe who dies and leaves his 80 to 10 children and one of those children sold to whomever you got them from giving you a total of 8 net mineral acre but the deed to you may read NW/4 of Section x containing 160 acres and not mention you only get 8.
If it is as you say and you know for a fact you own 360 mineral acres then you had better be contacting the leasing company and if they are not willing to straighten it out contact an attorney, but you stated your lease says 360 ............ and most ALL leases only state gross, not ones net.
Tim Metz said:
Sharon,
how do you know you own 360 net mineral acres, who told you or how did you figure that to be the amount? I imagine it may be like most, they see a figure on a document like a deed or lease and for some reason believe that figure is what they own when in fact that figure is the acreage in that tract and actual ownership could be a fraction of an acre, it could be only one acre or it could be the entire amount. For instance a deed or lease states NW/4 of section x, that means there are 160 acres total in that tract. The original first owner may have kept a 1/2 interest then sold the rest to John Doe who dies and leaves his 80 to 10 children and one of those children sold to whomever you got them from giving you a total of 8 net mineral acre but the deed to you may read NW/4 of Section x containing 160 acres and not mention you only get 8.
If it is as you say and you know for a fact you own 360 mineral acres then you had better be contacting the leasing company and if they are not willing to straighten it out contact an attorney, but you stated your lease says 360 ............ and most ALL leases only state gross, not ones net.
Hi Tim,
The lease says "Described as following to wit:
Township -----
Section ____
Section ____
Section ____
containing 360 acres, more or less"
The Rider says: DESCRIPTION OF LANDS: and then repeats the township, range and the 3 sections.
The Sight Draft states the 45 Net Acres.
So, seems to me there is something wrong with this picture. Your impressions?
Thanks,
Sharon
Tim Metz said:
Sharon,
how do you know you own 360 net mineral acres, who told you or how did you figure that to be the amount? I imagine it may be like most, they see a figure on a document like a deed or lease and for some reason believe that figure is what they own when in fact that figure is the acreage in that tract and actual ownership could be a fraction of an acre, it could be only one acre or it could be the entire amount. For instance a deed or lease states NW/4 of section x, that means there are 160 acres total in that tract. The original first owner may have kept a 1/2 interest then sold the rest to John Doe who dies and leaves his 80 to 10 children and one of those children sold to whomever you got them from giving you a total of 8 net mineral acre but the deed to you may read NW/4 of Section x containing 160 acres and not mention you only get 8.
If it is as you say and you know for a fact you own 360 mineral acres then you had better be contacting the leasing company and if they are not willing to straighten it out contact an attorney, but you stated your lease says 360 ............ and most ALL leases only state gross, not ones net.
Sharon,
I see nothing out of the ordinary and it does state that the legal description contains 360 which would be gross not stating those are all yours. The more or less is just common terms meaning it could be a fraction under or over or basically they are uncertain as to the precise amount and based on county or government survey as being close to precise.
I can tell you the court house is swamped with calls and all they will tell you is they can not help and you'll need to hire someone.
You said it states they only leased 45, why would they want only part. You never said how you know you own 360 NMA.
I assumed I owned the 360 gross acres due to the wording on the lease. The Lease or Rider does not state anything about 45 Net Acres. Also, I just re read the draft and it states the “Oil and Gas Lease covering 360 Gross acres”. To me, that says that they are leasing a total to 360 acres. But, they are paying for 45 Net acres.
Tim Metz said:
Sharon,
I see nothing out of the ordinary and it does state that the legal description contains 360 which would be gross not stating those are all yours. The more or less is just common terms meaning it could be a fraction under or over or basically they are uncertain as to the precise amount and based on county or government survey as being close to precise.
I can tell you the court house is swamped with calls and all they will tell you is they can not help and you'll need to hire someone.
You said it states they only leased 45, why would they want only part. You never said how you know you own 360 NMA.
Sharon,
Most do just that, assume. Gross means just that, gross, not net.
You would have received a letter from the leasing agent stating the net mineral acres they are leasing along with all the other terms, keep it and make copies of everything else just in case the MOR doesn't add up. They did state in a letter that they are only leasing 45 and paying for only that 45 so they wouldn't have a leg to stand on by trying to cheat you, no reputable firm would do that, who is this company you don't trust?
If you don't trust them don't lease to them and don't sign the lease, hire an attorney to do a tittle opinion or landman to do a title search but it will cost.
If you decide to trust them and lease, ask them to send you a mineral owner report which will show who owns all the mineral acres in those 360 acre tracts.
Sorry but I would bet money you inherited only 45 acres in tracts which contain a gross of 360 acres. I'd be happy to inherit 45 acres in the Bakken play, I had to pay cash for mine.
Thanks Tim. What you said sounds reasonable to me. Wording in contracts are always a stickler for me as I am a Realtor and live and die by what wording I use in an Earnest Money Agreement contract and all of the Addendums that we have. I have been a Realtor for 21 years and have not had a legal issue yet, which most of my fellow Realtors have experienced due to poorly worded and unclear contracts. So, I'm always vigilent. Don't have a lot of faith in Attorneys either.
Sharon
Tim Metz said:
Sharon,
Most do just that, assume. Gross means just that, gross, not net.
You would have received a letter from the leasing agent stating the net mineral acres they are leasing along with all the other terms, keep it and make copies of everything else just in case the MOR doesn't add up.
If you don't trust them don't lease to them and don't sign the lease, hire an attorney to do a tittle opinion but it will cost.
If you decide to trust them and lease, ask them to send you a mineral owner report which will show who owns all the mineral acres in those 360 acre tracts.
Sorry but I would bet money you inherited only 45 acres in tracts which contain a gross of 360 acres. I'd be happy to inherit 45 acres in the Bakken play, I had to pay cash for mine.
It never hurts to make certain, to ask questions when there is doubt. All those documents to sell a house can baffle the mind with so many pages to sign after that a lease is simple in comparison to the work you do.
Hope I was able to ease your mind a little, but do ask for a mineral owner report to ease you mind more.
Yes, I will do that. I appreciate all of your input. Happy 2011 to you!! Hope we all become financially independent!!
Sharon
Tim Metz said:
It never hurts to make certain, to ask questions when there is doubt. All those documents to sell a house can baffle the mind with so many pages to sign after that a lease is simple in comparison to the work you do.
Hope I was able to ease your mind a little, but do ask for a mineral owner report to ease you mind more.
Sharon, here is a web site to research land records in ND. I don't know if mineral rights will show up but it is worth the effort. http://www.ndrin.com/records/
locally only severed mineral rights show up as the rest only show up as land owner
Sharon Davis said:
Thank you again, James. I will phone the county and see what I need to do. I inherited the mineral rights.
James M Miller said:Here in Elbert County CO, you can find out who owns the mineral rights from the county. On line I can search for property, put in natural resources and the section, township and range and find the two owners of mineral rights that are not current land owners. Since you are not the land owner, how did you get your mineral rights? If inherited there are probably relatives who own the other 7/8 (315 acres)
Ohh! This is great. Thanks much.
Sharon
James M Miller said:
Sharon, here is a web site to research land records in ND. I don't know if mineral rights will show up but it is worth the effort. http://www.ndrin.com/records/
locally only severed mineral rights show up as the rest only show up as land owner
Sharon Davis said:Thank you again, James. I will phone the county and see what I need to do. I inherited the mineral rights.
James M Miller said:Here in Elbert County CO, you can find out who owns the mineral rights from the county. On line I can search for property, put in natural resources and the section, township and range and find the two owners of mineral rights that are not current land owners. Since you are not the land owner, how did you get your mineral rights? If inherited there are probably relatives who own the other 7/8 (315 acres)
Sharon,
If you could enter the legal description on the DEED for the property then we can explain how the lease was calculated.
Most deeds will state that you own a percentage of interest in certain plattes of land to which you own the minerals in the land. It will look something like the below:
A full explanation of how to calculate your property net mineral acres and royalty interest is at http://blog.melsmineralmanagement.com/. This is a website I'm preparing, but there is an article there that can help you out. It's about the third article from the top.
The 360 acres is the gross acreage to which you probably own a percentage usually expressed as a fraction.
Take Care,
Mel
Thank you Mel. I will check out your website. I appreciate your information. A Happy New Year to you!!
Sharon
M. D. Wood said:
Sharon,
If you could enter the legal description on the DEED for the property then we can explain how the lease was calculated.
Most deeds will state that you own a percentage of interest in certain plattes of land to which you own the minerals in the land. It will look something like the below:
A full explanation of how to calculate your property net mineral acres and royalty interest is at http://blog.melsmineralmanagement.com/. This is a website I'm preparing, but there is an article there that can help you out. It's about the third article from the top.
The 360 acres is the gross acreage to which you probably own a percentage usually expressed as a fraction.
Take Care,
Mel
simply stated, you only own 45 acres of the original 360 mineral deed acres. Probably other members of the original owners clan owns various portions as time has diluted through inheritance…you have no control over the remaining 315 acres. However the drilling company can either deal with them individually or “pool” them for future royalties.
That is a clear answer. Thank you, Thomas. One other question, what do you think would be the need for the other 315 acres to be included in the verbage in the lease?
Sharon