The Poseidon is one of the sections. Central Montana Productions. We owned all the mineral rights on Breed Creek where a big hit was made in the 70’s, but my uncle sold the rights for $34,000 in 1957! We had about 200,000 acres and held 3/4 of the mineral rights. Only kept 36,000 when we sold in 1959. Dumb!
Diane, I don’t see activity on either of your sections yet. 11N-33E-13 and 10N-33E-6 are where two of the temporary spacing units will be placed.
Beverlee, thanks for posting info. It helps when we all chip in. Based upon your comments, the type of lease you described is now uncommon though it’s not unheard of. I might be wrong, but this sounds like a lease with annual renewals (as opposed to a “paid up” one with all bonus money up front). I’m sorry it lacks a Pugh Clause. However, this is a very common problem (elsewhere I learned the hard way too). I don’t like being the bearer of bad news but it is doubtful you can get out of the lease if the Lessee honors the terms as stated. All I can suggest is carefully re-read it so you know exactly what the Lessee is obligated to do. If they fail to perform, then you can take action to break the lease. I know that is not much, but it’s all I got.
In defense of your Dad and uncle, since the 1950s minerals in eastern Montana have been leased repeatedly with few or no wells to show for it. So offers to lease become thought of as opportunities to pick up some extra money, not as the potentially long-lasting contracts. There have been exceptions, yet typically a lease was just a periodic chance for cash every decade or so. I suspect your Dad and uncle viewed it as another in a line of leases signed today which will expire just like the last one.
Connie, what you posted is positive for you. It suggests drilling may be sooner rather than later. This is a needed step towards drilling. However, Fidelity’s request for spacing is just one of several steps along the road to drilling a well. There is no guarantee they’ll advance beyond their request. Yet drilling on your section now appears more likely than on adjacent ones where no spacing requests have been submitted.
Thanks for your input and help Richard. It is comforting to know that there is someone out there who is helping us novices try to understand the unique world of oil and gas! We’ve been following these oil leases for some time and we honestly never thought that we would live to see them actually produce anything. So, if nothing happens in our lifetime then I guess that it was meant to be. And if all we get is enough money for a dinner out on the town then by golly, it will be a gift greatly appreciated! Thanks for your help and advice. We will be following the board on a daily basis. I’m sure glad that I found you all!
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I received a letter from Fidelity Exploration & Production notifying me of a hearing on an Application for Temporary Spacing Unit on June 14, 2012 in Sidney Montana. It was addressed to “Interest Owners” Twp. 10 North, Rge. 33 East, MPM Section 7: All asking for an order establishing a temporary spacing unit in Rosebud County. Anyone has an idea what this is good or bad or nothing at all?
Mr. Lee, that notice is one of the required steps if Fidelity intends to drill a horizontal well under that section. This does not mean they will, but it is a step along that process. Notification of “Interest Owners” is a required step too. This gives mineral owners an opportunity to oppose the request if they choose to. The fact you received that letter suggests Fidelity believes you own minerals either in Section 7, or under an adjacent one.
Thank you for the info
Another well just showed up on June 10th. fidelity. Coffee #31-2H
Rosebud County 10N-33E. Looks like it right next to the Schmidt Well. Schmidt production went down to around 4500 barrels in the last 25 days. Hopefully it won’t continue to reduce flow.
Beverlee, Do you know if 10N-33E is producing anything? How long has the Schmidt well been in production?
Dianne
Dianne, the Schmidt well has been in production since March and the new well showed up June 10th. I don’t know if the info was for drilling or what. My geologist didn’t say. It is 10N 33E Section 2. I believe.
A company can keep information confidential for quite some time before reporting. I’m still wondering about the Central Montana Resources wells. No info yet. I think Rock Happy is producing. That is located on 11 N 32 E Section 33. Cirque Resources. I saw that one of the companies was building a pipe supply yard north of Roundup. Whatever that means!!!
Beverlee, I wonder if a pipeline is going in. I see some areas are shut in. I don’t understand all of what that means. My grandparents homesteaded 10N33E Sect 3 and 11N 33E Sect 34 and so I am very interested in knowing what’s happening in that area. More than that, how are the locals viewing all of this? Are they upset about the drilling rigs coming on their property? Thank you for all your information thus far. You’ve been very helpful!
Dianne, I think if it says an area is shut in, it means there is an inactive well in the area. No plans for a pipeline. Gas prices are too low. As far as locals, we owned 200,000 acres, and in that area there were two ranch houses. We now live in Colorado so don’t know how “locals” feel. I don’t believe there are many locals. It’s basically grazing open prairie land. I know that in some areas of the state, the people really welcome the economy growth but in other areas, like ND, it has grown too fast. I read that there is a need for 28,000 new houses in the Bakken area.
What were your grandparents’ names? We bought our ranch in the early 40’s. Maybe we were neighbors!!!
Dianne, If a person doesn’t own the mineral rights but owns the surface rights, I can imagine they may be pretty upset… If a company wants to drill and has leased the mineral rights, surface owners have virtually no rights. Drilling companies usually specify that they will return the surface to the way it was before they came in. But, water is contaminated, natural foliage is disturbed, and the ground is usually left barren and desecrated.
Beverlee, I have sent you a “friend” request. If you “accept” we can write messages back and forth without disturbing the flow of this message board. I’ll share a little more family history with you there! Dianne
I have a lease with Fidelity, I was told about the wells they drilled and are drilling and may drill one more, depending on whether the well they are drilling now produces. On the Schmidt well, someone wrote it was 4600 barrels —is that one day? I am new at this and trying to get filled in on what goes on and what I can expect. I was originally contacted by Turner Oil and Gas but all they do - I believe - is find owners of mineral rights and get leases and then they sell them, mine went to Fidelity.
Glad it’s with a big company. My payback is on a percentage of net profit if a well produces on the area I have leased to them. Any comments?
I was told there is a well 3 miles from my property/mineral rights only.
Rose, was your lease written by Fidelity or Turner? If it actually says you will be paid on the NET profit, I’m afraid that is not so very good. Most leases are based on the price of oil when it comes out of the ground and production costs are not included as part of the lease. It would be ok. We have a lease which was done in 2007 and our royalties are 12%. I think some are getting quite a bit more now that there is more activity.
Where exactly are your mineral acres located? If you don’t mind disclosing that info…
The Schmidt well produced 4600 or so barrels in its first 25 days of production. That would average out to about 185 bbl per day, which is not great, but not so bad. A well was just drilled on the 10th of June on 10 N 33 E-2. Fidelity applied for 17 temp spacing units in April I believe. Doesn’t mean that they will drill, and the process takes a very long time! There are some who don’t want drilling in that part of the state.
Drilling really messes up the ecology… (my opinion)
Rose, what I meant to say was I didn’t think that being paid on the Net profit would be very good terms. Production costs are huge. I’m not an attorney, and I wished my Dad would have retained one when he signed the lease, but I have learned much since. He did everything he wasn’t supposed to do and nothing he was supposed to do by signing the lease that was presented to him.
Hi, thanks for your reply. It was written by Turner but sold to Fidelity. Fidelity ran some proposed figures—a guesstimate—and if it produced so many barrels a day, I would get a certain amount of money. I forget the figures. I got $10 and they increased my share of mineral rights—which are very tiny. My uncle willed his 25% mineral rights in 320 acres near Sumatra to his EIGHT brothers and sisters. This was in the 50’s and in ‘67 I was given the 1/32—don’t laugh! But I was thrilled. It’s far better than nothing. Turner offered me a lease for the $10 and 3/16 of the net profit on 10 mineral acres—I don’t understand that part at all. My cousins are getting their paperwork done to show heirship as some didn’t even know their parents had mineral rights. As I had my original documents signed by my parents, I registered the ownership with the county courthouse in Forsyth. When I got a call from Turner, I was the only heir that was recorded from the original 8 heirs. I mean my aunts and uncles are still heirs but are all dead and no child has stepped forward except me. Since Turner contacted me I understand 4 or 5 more are getting their paperwork done. If the others’ share isn’t recorded, it goes to the State of Montana in a certain department for 10 years and if not claimed, the state keeps it. That’s what I was told.
Rose
New to the forum with property in Rosebud County. Trying to find out if I have mineral rights? Called the county assessor/recorder, no help? Any assistance would be appreciated!