North Dakota, Division Order for Well I Have no Interest IN

To start, I own a small interest in a well, Kermit 1-32H in the spacing T150 R96 sections 32-29 which started producing in May of 2008. The spacing was 2 section.

10-3-2008 the Kirkland 1-33H started producing in the spacing t150 R96 sections 33-28 which was also spaced 2 section.

A couple years later the NDIC granted a petition to create a 2560 acre spacing combining these two 2 section spacings. I have just received a division order for the Kirkland 1-33H about 8 years late. Problem #1 is I don't believe I own in the Kirkland because the 2560 spacing was created years after the Kirkland started producing and it still shows to be spaced 2 does my Kermit well.

Problem #2 is that the division order effective date is October 1st of 2013. God only knows how they picked that date. I'm reasonably certain that the operator couldn't tell me.

Problem #3, and don't get me wrong, it's not a bad problem to have, between 2012 and 2016, 8 more O&G wells have been drilled in sections 28-33 T150 R96 in the 2560 spacing that I have NOT received division orders for. When I look them up, all of the wells drilled after the Kirkland 1-33H have been drilled on 4 section spacing. Where are any of the division orders for these wells? I think I should have at least received division orders for the wells drilled in 2012, if they are going to send any division orders at all.

I have been monitoring the situation and letting it lay because I have a suit that needs to be completed. This is not the first time I have disagreed with this operator over my ownership in yet another spacing but in that case it was a complicated matter whereas this one is definitely not. Never take it on faith that your operator is getting it right unless the interest is vanishingly small.

R W,
Would you provide a little more detail about the type of interest you own?

Kitchen, thanks for replying. I own a few net mineral acres in the spacing. They are leased at various royalty rates.

Are you leased, non-consent, or unleased? Were you supposed to be legally notified of the spacing change? If so, were you notified?

Kitchen, I am leased.

Yes, I should have been notified of the spacing change between 1280 acre and 2560 acre but I was not. I could have appeared and protested. I was not going to drag the operator over the coals because I did know about the petition in advance because I have been watching.

All one needed to do was check the Drilling/Spacing box on the GIS map in 2010-2011 and most of McKenzie county used to be covered by various case numbers. These days selecting Drilling/Spacing will show that the subject area is all spaced 2560 acres. If one has the $50 basic subscription to the NDIC O&G Division, one can look at the scout ticket for specific wells and determine their spacing, a 5th grader can do it.

What I am willing to drag the operator over the coals for is sending me a division order for a well I don't have a royalty interest in while they did not send me division orders for the eight (8) wells I do have a royalty interest in. Wells drilled between early-mid 2012 and late 2015.

The division order they did send for the well I don't have a royalty interest in would have been eight ( 8 ) years late. Nobody is that short handed.

The fact that I don't have an interest in the well I received a division order for leads one to believe that the operator's landmen and title people do extremely poor work.

I have another example with this same operator's title people.

My Uncle dies without issue and his mother (my grandmother) was his heir. Grandmother passes away and my Aunt was her heir so she wound up with my uncles mineral interests that she received from grandma. My father passes away intestate with two strapping sons. This operator's landman thinks because my aunt came into possession of my uncles mineral rights that she might have inherited my father's also and commits it to a memo which they give to the title analyst. I talk to the title analyst and ask him if there is a shred of evidence that would lead anyone to believe that my aunt inherited my father's mineral rights and the analyst says there is the memo. I say no, not the memo, I mean is there a will, recorded document anything other than this memo that "possibly" my aunt could have inherited my father's mineral rights? The analyst says, "well there is this memo". Facepalm, pull hair, wash, rinse, repeat.

R W,

Wow that is some pretty bad assumptions by the operator in my opinion (regarding the heirship example).

So let me get this straight, the spacing you were originally part of was 1280aces in 32-29. Later, the operator combined this with another spacing 33-28, creating 2560acres total.

You received Division orders for wells drilled on 33-28, but not on the original lease in 32-29. If the spacing was legally combined (even without proper notice to you) wouldn't you in fact be included and be entitled to share in the production from 33-28?

I'm probably not of any assistance to you, but I want to understand why you would be excluded from 33-28 if the state allowed the two spacings to be combined. Does your lease prohibit the additional spacing or acreage?

I agree it sounds to like the operator really does not have their records together if they have not even sent the Division orders for the wells you should be included in.

Actually Kitchen, I did receive a division order for 32-29 and only about 3 years late but it only came about as a side product of a lawsuit. I had no interest in the 33-28 spacing until the 2560 acre spacing was created in late 2010 so I would have no interest in the first well drilled in (33-28) 2008 which remained on 1280 spacing for which the operator erroneously sent me a division order this week but I would and do have an interest in the subsequent 8 wells that have been drilled in the 2560 spacing including 33-28 for which I have not received division orders for.

I didn't make the rules. If it's too hard for the operator to abide by the rules I wonder why they petitioned for the spacing change to begin with?

R W,

Thank you for clarifying this. This makes much more sense to me now. Are you sure you do not own an interest in the original 33-28 well? We both agree that when it was originally drilled that you did not own an interest in it. However, in the combined spacing permit did the state specify that the combination only applied to new wells?