Lease offer by Diamond Resources (dozens of mineral rights co-owners)

I can give some general information. There have been no leases are permits or completions in the last 999 days. The last well that was drilled in the whole township was in 2013. So this may be a new leasing effort-perhaps for horizontal drilling. The five year lease makes me think they are not in a hurry to drill. I never lease for more than three years. North Dakota law usually allows for post production charges for gas and oil unless you get a lease that does not permit it and that can be hard to get. the 1/6th is the minimum royalty for ND. I always ask what they are offering at 3/16ths and 1/5th and 1/4, just to see what they will say. And if you are really dealing with CLR, then they will not be inclined to let you have a lease with no post production charges.

Each of the heirs must be able to prove that they have clear title through a probate or other title document. Good thing to start on now. Each heir can sign their own lease depending upon how the wills read through the generations. If there are no wills then you will need to go through the intestate process which takes awhile, so get started. Your documentation of the family will be very helpful.

There is an old oil field which was drilled in sections 15, 22 and 23, so ask Diamond who is going to be the operator and will the well(s) be conventional or horizontal. My opinion (free, so take it or leave it) is that the five year time frame and the low offer is a low fruit teaser and the time frame is not in a hurry. Gives any relatives time to get their title fixed and be ready for a later offer (or none).

ND has rules which apply to force pooling if all owners don’t sign. The North Dakota Oil and Gas commission is a good place to start for information. Folks can only make a decision given the information they have at the time. Hard to know if offers will be better or worse down the line. There has been some horizontal drilling in 130N-100W, so the trend may or may not extend into 137N.

I took a quick look at the lease and there are quite a few clauses in there that are not in the mineral owner’s favor at all. I would not sign it without making significant changes with the help of an attorney.