My elderly father was just contacted by Diamond Resources. They asked my father whether he'd like to lease his North Dakota mineral rights and he said yes. He should be receiving the lease in the mail in a few days.
My only concern is that no numbers (e.g. bonus, royalty, lease term) or other lease specifics were discussed. Is this normal? Should my father and I be concerned? When in the process are these terms usually negotiated?
Thanks in advance to anybody who can shed some light.
Jean, from past experience I would only deal with Diamond Resources by mail so you have a record of everything said. If I were in your position I would also like to know if the well had already been drilled. You could have had a well producing away for 5 years and they usually won't tell you. For some silly reason they think that if they tell you there is a profitable well allready drilled that you will ask for more money. I believe that the negotiations have already begun from Diamond Resources side and that they will probably make a lowball first offer simply because you did not ask about money and I've heard that 85% of mineral owners sign the first lease they see. If you do not have a fresh statement of claim recorded within the last 20 years in the ND county in which the minerals lie, then you should record one because ND has a dormant minerals act and it may prevent some funny business. If you have a prior lease, statement of claim or can show some use of the minerals within the last 20 years you should be okay according to the dormant minerals act. If possible, in your position I would like to know the productive potential of your acres, how any surrounding wells have done and seek other offers. If you can get competing offers the market itself will help you negotiate. If Diamond thinks you are only dealing with them, it may take a long time before they make an offer anywhere near their best offer. If you have a recent claim or expired lease within the last 20 years, it should be safe to post the legal description of your minerals and I would be glad to look to see if you already have a well or if the wells around you are good producers. If you do not have a recent claim or lease, you can send me a friend request and I will look it up for you and let you know privately. Good luck.
Jean:
Good advice is offered by Mr. Kennedy. Bottom line: BEWARE of Diamond Resources and their business dealings. Do some research into this matter before signing anything and by all means, don't get in a hurry.
We just signed leases in the Bakken with Diamond. They are a very reputable company, but you should definitely negotiate your own terms. Don't sign the lease they send you until you have gotten the terms you want. My Daddy was a landman/attorney and my brother writes the software for the ocean floor seismic surveying so we had good info. Daddy is gone, but I have a lawyer's mouth on me. LOL - I can give you the name of the landman (lady) that helped us and the terms we got if you want. TAKE YOUR TIME. Don't get hasty. They want what you have. We negotiated for awhile, very detailed. There are more things than just the money to consider. I will be glad to share more info if you need it.
My Brother and I negotiated with Diamond Resources for 8 months from Dec 2007 to July 2008 [ have phone records, letters, multiple lease offers ] My brother actually executed a lease for Diamond Resources with the memorandum of lease instrument #37920 being recorded 21st day of march 2008, then Diamond Resources wanted to change the deal with my brother and my brother refused. Because Diamond didn't get their way legally, they went to court and on Sept 8 2008 lied and had us declared unfindable, and had an emergency mineral trust set up in our fathers name. I call this telling lies to the court, which some people would call fraud. Notice was waved [ we still have family in the area and would have heard if notice had been in the papers ] and Diamond never supplied an affidavit of due dilligence. 3 months after setting up the trust Diamond Resources was back trying to lease us again, I have the letters, leases and drafts, why would Diamond Resources do that if the trust they set up was legal, they even started offering more substantial money. Diamond sent more lease offers after setting up the emergency mineral owner trust and did not go to the trustee of the emergency mineral trust to get a lowball lease signed until Mar 12 of 2010, some emergency. I might have leased with Diamond if they had offered more than $75 per acre and 1/6 in the blazing hot Eastern McKenzie county of 2008 when oil was $130 a barrel. Diamond Resources even sent us lease offers as late as mid 2011. In my opinion,if you shake hands with Diamond Resources, you would do well to count your fingers after. I only say this because I know them. Karen McAndrews said:
We just signed leases in the Bakken with Diamond. They are a very reputable company, but you should definitely negotiate your own terms. Don't sign the lease they send you until you have gotten the terms you want. My Daddy was a landman/attorney and my brother writes the software for the ocean floor seismic surveying so we had good info. Daddy is gone, but I have a lawyer's mouth on me. LOL - I can give you the name of the landman (lady) that helped us and the terms we got if you want. TAKE YOUR TIME. Don't get hasty. They want what you have. We negotiated for awhile, very detailed. There are more things than just the money to consider. I will be glad to share more info if you need it.
WOW!
I'm in the same boat. My mom signed a lease and then passed on. It is up in Jan, but from what i've now read maybe not. There is a lot of mumbo jumbo in the secondary terms of the lease that might keep it in force forever. It is with diamond resources and I don't know what is going on around the area. It is in township 157 north range 88 west of the 5th PM in sections 11 12 and 13. If anyone has any help here I'd sure appreciate it. The property is outside Coulee North Dakota
Yeah, those are the "details" I was referring to. We have an "out" clause so that won't happen to us. Sorry about that!
Just because someone didn't pick your pocket doesn't mean they won't pick someone elses' pocket.
I'm not sure I'm in the right forum or not but I'll ask anyway. I see in the North Dakota Oil and Gas Commisions that the property I own in the state, in a well search, is pretty much covered with the notation PNC meaning permit now cancelled. I figure this doesn't bode well for finding much oil on it since the Companies took out the permits and then cancelled. What I'm wondering is, how commom this is? Does it mean no work was done been done? Should I return to the state lottery as my retirement plan? Any help would be appreciated
Mr. Erickson, a permit being cancelled usually means no more than a permit being obtained. I am in a spacing that had 7 different permits, changed hands [operators] at least twice, had permits cancelled and more permits obtained so although the operator must have a permit before they drill, they are really fairly meaningless. Permits, unless they have gone up only cost $100, that is 8 cents an acre for a 1280 acre spacing. The really important thing is location. If you are in an area with commercially viable production you are likely to get drilled. If you are in a less desirable area you may get drilled anyway but at a later date. Some companies seem to specialize in less productive areas because it is cheaper to operate there, paying lower bonuses, royalty and drilling cheaper wells that may not be as productive as they could be but it may be better than no well at all.
Thank your for your answer.By navigating around the NDOGC map I see quite a bit of ongoing activity 8 miles to the west of my piece. I guess a miss could be as good as a mile in this business. Thanks again
Keep watching the map. There could be a new permit next month.
Gus Erickson said:
Thank your for your answer.By navigating around the NDOGC map I see quite a bit of ongoing activity 8 miles to the west of my piece. I guess a miss could be as good as a mile in this business. Thanks again
Replied no problem as my ND Golden Valley and ND Dickison attorey is fine.
Karen, would you mind giving the name of your landman(lady)? And what did you mean by there being more than money to consider? Some of the other posters have mentioned an "out" clause? What is this, and do you (or other posters) have any thoughts about it? Thx!
Karen McAndrews said:
We just signed leases in the Bakken with Diamond. They are a very reputable company, but you should definitely negotiate your own terms. Don't sign the lease they send you until you have gotten the terms you want. My Daddy was a landman/attorney and my brother writes the software for the ocean floor seismic surveying so we had good info. Daddy is gone, but I have a lawyer's mouth on me. LOL - I can give you the name of the landman (lady) that helped us and the terms we got if you want. TAKE YOUR TIME. Don't get hasty. They want what you have. We negotiated for awhile, very detailed. There are more things than just the money to consider. I will be glad to share more info if you need it.
Hi. I am new to the forum because we have significant minerals and leasehold in ND. We joined this forum because of the dysfunction of the Bakken States making no attempt to lease us and continue on with drilling wells, etc. Their oil and gas law is not as they will tell you as sifisticated as Oklahoma and Texas laws. One HUGE red flag your forum brought to my attention is the the ND Dorminent Minerals Act. !) does anyone have a sample statement of claim form? 2) What is the best way for me to find out if a Statement of Claim has ever been filed in the various Counties. If I call the County Clerk to inquire will they provide me with that info.? -- or should I send a certified letter asking the County for that answer? and 3) Would it not behove us to go ahead and COA's and just go ahead and file a Statement of Claim form for every property we have-- then we are covered for the next 20 years? Thank you in advance for any assistance you can provide us.
r w kennedy said:
Jean, from past experience I would only deal with Diamond Resources by mail so you have a record of everything said. If I were in your position I would also like to know if the well had already been drilled. You could have had a well producing away for 5 years and they usually won't tell you. For some silly reason they think that if they tell you there is a profitable well allready drilled that you will ask for more money. I believe that the negotiations have already begun from Diamond Resources side and that they will probably make a lowball first offer simply because you did not ask about money and I've heard that 85% of mineral owners sign the first lease they see. If you do not have a fresh statement of claim recorded within the last 20 years in the ND county in which the minerals lie, then you should record one because ND has a dormant minerals act and it may prevent some funny business. If you have a prior lease, statement of claim or can show some use of the minerals within the last 20 years you should be okay according to the dormant minerals act. If possible, in your position I would like to know the productive potential of your acres, how any surrounding wells have done and seek other offers. If you can get competing offers the market itself will help you negotiate. If Diamond thinks you are only dealing with them, it may take a long time before they make an offer anywhere near their best offer. If you have a recent claim or expired lease within the last 20 years, it should be safe to post the legal description of your minerals and I would be glad to look to see if you already have a well or if the wells around you are good producers. If you do not have a recent claim or lease, you can send me a friend request and I will look it up for you and let you know privately. Good luck.
L. Anderson:
I will address the portion of your post dealing with the County Clerk office. Unfortunately, they are not usually helpful in researching information. The best way would be to hire an individual, possibly a retired landman, to physically go to the County Clerks office and research the neccessary documents. If I am not mistaken, someone posted a mineral claims form on this forum in the past. If you will google "North Dakota Mineral Claims Form" in the box at the top right, you might be able to access this past information.
L. Anderson, get a statement of claim filed as soon as you can in the counties in which your minerals lie. A statement of claim does not have to be the most precise document but it has to include all that you wish to preserve claim to and should include wording that the purpose of the statement be that your claim not be extinguished. It's worth hiring a lawyer to get your claim in if you know what you are claiming. The lawyers assistant/ paralegal whatever is going to do the actual work. If you don't know what you own from wills/probates/deeds, you may have to hire a landman or go to the appropriate courthouse and search for it yourself. The NDRIN Recorders network has electronic records that go back 20 years and sometimes a little longer for many counties in ND and a $25 subscription will allow you to search more recent documents such as those someone would need to file to obtain ownership of your minerals. Another issue is that an operator who is drilling a well that would include your minerals could set up a trust in the last recorded owners name and lease from the trustee a very lowball lease which you would be bound by, this also could be searched on the NDRIN, I suggest you start there to see if there is any mention of your minerals or name or predecessors name. Good luck.
Yes, thank you R W Kennedy. Did find that site. Excellent site. So now my question is supposedly paying "mineral taxes" is an "activity" which will hold your minerals as active. I have minerals in 48 States. I am not a big Co. but we are more well versed in Oklahoma Oil and Gas Law. ND and SD has never tried to lease us even when we made them aware we had been at the same address for 20 years. Yet, they go and testify at their commissions they made every attempt to lease us. That absolutely would not fly in Oklahoma. Having said that, I am highly concerned these States would make no effort to contact us if a Surface Owner did in fact pursue "abandonment of minerals". So back the main question... Is there a mineral tax assesed on unproducing properties? How is paid and to who? I do have a legal background and can pull off the form and get them filed. And yes, thank you everyone for the advice. We are moving real proactive to make sure we have not lost any mineral ground.
r w kennedy said:
L. Anderson, get a statement of claim filed as soon as you can in the counties in which your minerals lie. A statement of claim does not have to be the most precise document but it has to include all that you wish to preserve claim to and should include wording that the purpose of the statement be that your claim not be extinguished. It's worth hiring a lawyer to get your claim in if you know what you are claiming. The lawyers assistant/ paralegal whatever is going to do the actual work. If you don't know what you own from wills/probates/deeds, you may have to hire a landman or go to the appropriate courthouse and search for it yourself. The NDRIN Recorders network has electronic records that go back 20 years and sometimes a little longer for many counties in ND and a $25 subscription will allow you to search more recent documents such as those someone would need to file to obtain ownership of your minerals. Another issue is that an operator who is drilling a well that would include your minerals could set up a trust in the last recorded owners name and lease from the trustee a very lowball lease which you would be bound by, this also could be searched on the NDRIN, I suggest you start there to see if there is any mention of your minerals or name or predecessors name. Good luck.
L. Anderson, to the best of my knowledge there is no taxing of non-producing minerals in ND so I wouldn't worry about adverse posession. I do find disturbing that it is so easy for operators to seek a mineral trust in someones name and sign a lowball lease with the trustee. There is extreme danger of fraud in the way that ND has prescribed that this can be done.