McKenzie County, ND - Oil & Gas Discussion archives


#766

Janie, that inactive well has had awesome production of 471,000 barrels since 11-22 of 2011. I’m sure it will be back.

There are 3 wells spud in that spacing besides the great first well. The last well spud was 4-15-2014.


#767

Wow, thanks for the info.


#768

As summarized earlier in this blog, I was negotiating with Continental/Diamond on a new lease in McKenzie County but then another problem came up on a property in another county under lease with them. I ended up telling them that I would no longer consider leasing with them until that other problem was resolved to my satisfaction (and maybe not even then). Today, I got a call from another land company named Aurora Energy Solutions seeking to lease the same property in McKenzie County. The proposed lease terms are pretty much where I had left off with Continental/Diamond, which is a bit suspicious. I gave them a proposal with a special lease term - no assignments to Continental/Diamond. That should smoke out who I am really dealing with. Does anyone have any experience with Aurora - good, bad or indifferent? Has anyone else been approached? And, yeah, I know the land men might read this blog. Thanks. JSM


#769

Thanks Kennedy, will let you know what happens.


#770

You might also want to get confirmation that the attorney who prepared the title opinion is admitted to practice in North Dakota. Occasionally, these oil companies use out of state attorneys who may not be as well-versed as local attorneys on ND title law. That can lead to unnecessary controversies. And, no, I am not a ND attorney.


#771

Hey Kennedy, We finally received one of the dreaded “title requirement” letters. Never had to deal with this before. There are several pages with various issues on two of our sections. As far as I can understand one part is whether our grandpa gave surface rights instead of actual mineral rights to his son… our uncle. Our uncle in turn passed the mineral rights to us. The other part deals with the river moving and we are either gaining or losing acres. They even talk about getting a survey. They won’t return our calls so we can understand what they are talking about… in plain English. If we can’t figure this out ourselves, do you suggest a lawyer or landsman’s help. Or should they be responsible for helping us. Thanks, your advice is really appreciated.


#772

Bonnie, the first one is going to involve a lawyer to determine what your uncle inherited and what he passed to you. You may even have to initiate a quiet title action, tough to say without seeing the relevent documents.

The second is going to be more involved. If it’s a navigable waterway, there may already exist a recent survey, I would check with the state. I would also be incline to try to throw it back in the operators lap by sending them a demand letter for payment and asking them if there were a dispute over ownership? Which dispute? Where? If there is no dispute, just pay me. If there is a dispute, tell me the other party so we can work it out with a stipulation of interest, it doesn’t have to be that hard.


#773

Thanks John, I will check that out… good thought.


#774

I would do a search for their name on the site here. From what people say about them in Oklahoma, I think they might be one of the easier companies to deal with.


#775

Newfield is quite experienced. They are very active in the Woodford in OK and are on the forefront of infill drilling there.


#778

Ed as I said, you can let it build up until it’s worth your while and take them to small claims court. Several times. It’s going to cost them $2,500 just for their lawyer to show up in court for the day. The operator is in it to make money.

I have a family member who is a trained and experienced forensic accountant and I look forward to auditing my operator, will engage other interested non-operating parties in the audit and if the operator will not see reason and it seems warranted, take the operator to court. Just like any other business.


#779

Ed, I have the same issues, if they are taking your part of the gathering line out of the 84% and from your 16% royalty, I call that double dipping and pretty much the same for processing. I am going to audit the operator around the 4 year mark if not sooner. I have caught them in a little hanky panky already and they have agreed that I do not have a risk penalty in one of my non-consent wells in exchange for my forebearance. My operator also tells me that my well, on which nothing went worng, cost 14.5 million dollars when the AFE was for 9.8 million. It will all come out in the wash. They are also charging the risk penalty to the gathering line which I believe is wrong as the law states actual cost of drilling and completing the well, and does not specify surface equipment. As they sold oil by trucking it before there was a gathering line, I presume the well was complete at time of first sales, or how could they sell oil? Montana has the equivalent of a 100% risk penalty (they do not call it a risk penalty) but their law spells it out better in terms of what the penalty applies to although I did have a lively discussion with a landman who just added all numbes together and pronouned that there was a 350% penalty. LOL. When I asked him to show me how he arrived at those numbers he couldn’t. Then he told me I had no humility, which seems to happen quite often when I try to correct some hugely erroneous information that a professional put out.

Ed, when you look at the long term benefit, it may be galling that they are overcharging and double charging but when the well pays off your relative should still be better off than leasing. There is also always small claims court. An oil company would hate small claims court, it would probably cost them more each time to go to court than they owed you and I would have them in there 2 and 3 times a year until they figured it out, if I and my brother and a few other interests in the well don’t slap them with a lawsuit right after the audit.


#780

Has anyone dealt with Newfield Production Company? I recently found more mineral rights in McKenzie County and they are the operators. This is a new one to me.


#781

I have had limited experience with Newfield. Once on a Division Order question for my mother and another when I had to call their home office with a question about her royalty payments. Both situations were positive.


#782

Thanks so much for the information. It’s really nice to hear good things about an operator. Most of my mineral rights are with XTO and they are a nightmare.


#783

Newfield is one of the easier companies to deal with in the SCOOP in south central Oklahoma. They drilled 6 wells on one section and are starting another for us. They took the full 6 months to pay us that they were allowed but did not go over that. They post the amounts of your check usually on the same day they send them out which is the last working day of the month for us. Now a friend who has royalty in McKinnsy (sp?) Co that things are sooo different and complicated in ND when it comes to handling royalty. But they are working with Conoco Phillips so I don’t not if they are the one making it difficult to get her money or not. I don’t know anything about XTO except they are also doing a lot of drilling around and north of Ardmore. I thought they were a good company but have no experience. We are only leased to Newfield and Continental. Hope this helps!


#785

Ed, that is good news. I know they shouldn’t be taking out the expenses but I was just going to wait until I audited my operator because I know they are skimming elsewhere.


#786

So far Newfield has been good to deal with. At least you get to actually speak to a person. XTO is absolutely impossible to deal with. I leave messages 2x per day, every working day and never get my calls returned. It’s a nightmare. I need some answers from them but it’s not going to happen.


#787

Linda, Conoco can be hard to work with, mostly because the laws of ND allow them to be hard to work with. In ND the operator can demand stringent title requirements, such as a deed recorded in your name before they recognize that you have any right at all and this makes probates, sometimes multiple probates or a quiet title action necessary, for people with sometimes as little as 1/10th of a net acre to receive royalty.

There is no 6% interest on past due royalty as there is in Oklahoma when there is a title dispute and the operators take full advantage of that fact.

I had 5 acre here and 10 acres there and I have been there and got the T-shirt with Conoco, parent company of Burlington Resources although Burlingtom doesn’t admit it. LOL.


#790

I have just been contacted by an “agent for statoil oil and gas”. They are offering me a lease predated back to Nov 11, 2011, for my share of a 32.71 acres Section 24 in McKenzie Co. (The rest is under water and I presume belongs to the State of ND). Statoil or their predecessor executed leases with other owners (my brother and I own 1/4 of the 32.71 acres, the biggest owners) years ago, and put a well Jay 24-13 #1-H on the property (although it is listed online as being in Sect 25). It has been producing. Relatives have hired a lawyer, who told them that they are looking into a class action suit against Statoil for not paying royalties to lots of people, and asked for copies of leases. One relative contacted the agent for Statoil, who told me that they knew who I was, where I lived, how much I owned, but never contacted me or my brother. Funny, because when I contacted Statoil (online numbers), they told me that they never heard of me, or my mother, or my great grandfather whose name is on the plat.

So, my question is about signing the lease. They have offered me $800 per acre and 3/16 royalty. I do not know how much oil has been produced. Another group offered me $2500 and 1/5 for another property this past month.

What are the implications of signing the lease now? Also, of predating it to Nov 11, 2011 (when well opened?).

Thanks!