My brother, sister and I inherited mineral rights from our father in McKenzie Co. North Dakota. We have been receiving royalty checks since 2013 when wells were drilled in that area. We have recently received 2 offers to buy our mineral rights- we each have 6.66 acres. One in February was for about $2500/acre and a recent one was closer to $5000/acre. I receive less than $1000/year in royalties. I am considering selling my rights so my children don’t have to deal with all the probate related issues of it after I’m gone. How do I know if these are reputable companies and fair offers? I can’t find much/anything about them on the internet. The one offering $30,000 has sent a contract to sign. Should I have an attorney involved?
First off, you should provide a legal description so it can be determined where they are and if further production is in the works. The majority of the time offers this high come when there are already wells in the “works” and payments coming. In fact, that’s the only time I receive offers on my McKenzie County acres anymore. If they buy at $30,000 how much would you make IF they are drilling a well or two? That’s part of what you want to know to see if you should accept. That does sound like a good price, but ultimately do you want to sell and lose out on a well or more? Anyway, please provide legal (if you are willing) and I can attempt to see if there is current action in that area.
Secondly, I believe you can transfer those acres TOD to your children and avoid probate on them altogether (but check with a lawyer to verify that, first!!!).
Lastly, do you want to provide the names? So many lease companies out there these days. But most have their own interests ahead of yours.
Thanks!
Thanks for your reply. Our acres are in Stepan#16-9H, Township151N, Range 104W: section 16 SE. We currently receive royalties from Chord Energy/Whiting Oil and Gas. The offers to buy the mineral rights came from Dakota Energy and Midway Minerals.
I could see no drilling permits issued for your township/section this year, but that doesn’t mean something wasn’t issued last year. If you aren’t familiar with the North Dakota Industrial Commision Oil and Gas Website, you can find a lot of information on there. There are hearing dockets published monthly with proposed actions wanting to be done by the Oil companies and there are daily activity reports showing permits issued each day. You just need your legal description to see if there’s anything. I’ve never heard of those two companies but there are a ton of them out there, for sure.
Thanks! I check out that website. There must already be wells under the property since we are getting payments of about $100 every couple months from Chord Energy for our share of the oil recovered.
Your well has about a third of its reserves left to produce. It was common practice to drill one well in a section to hold acreage by production and then come back to drill infill wells a few years later. Some of the sections in that township have from four to eight wells in a section or two section wells. Chord is very active in the state. They have just filed infill permits on several section in the township just to the northeast of you. Zavanna has also filed infill permits in the township to the east. There is leasing on an open section near you, so somebody probably knows something and the offers have risen. If you have two companies making offers then two somebodies think they know something. If you have no need to sell, then just sit back, collect your royalties and see what develops in the next few months,
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Thank you for that information!
If we do decide to sell how do I find out what is the usual procedure to follow. Is it wise to get a 3rd party involved to handle the transaction. I’m concerned about sending in notarized documents to sell without having any guarantee of the money being available. The one offer did say we could use an escrow account but that they would deposit 5-10% in the account AFTER receiving my documents??? The balance on title transfer. Is this usual procedure?
You can have a neutral third party hold the signed documents until funds are deposited in your bank. Accountant or attorney or bank. I never turn over signed documents without being paid.
I had inherited mineral rights in both ND and MT in 2010. With no children or anyone to care to transfer to, in 2024 after a 80+ history in my family of ownership, I sold the rights.
From the start, Continental Oil was foremost in paperwork done for the spot I had inherited and when it came time to sell, although I had a few brand X companies contacting me, C.O. remained higher than anyone else. Not promoting one over another but I would reach out.
However, Diamond Resource worked in conjunction with Continental. In the end, my monthly deposits came from Continental.
The company offering to buy says they have an escrow agent they have used before. I don’t know how I would go about finding someone on my own. Just a little nervous about being scammed if it is someone connected with the buyer.
Was Continental Oil the one drilling your land? Did they make an offer to buy or did you contact them? Our royalties come from Chord Energy/Whiting Oil.
You dont need an attorney involved. Send them the mineral deed with a COPY stamp in red on the front and tell them they will get the clean version when the money is wired to your bank account on closing day via email and mail.
Hello - just a couple thoughts before you sell. Check to make sure there are no royalties in suspense (meaning royalty payments/partial payments are accruing but the oil company is not paying them out but rather holding on to them until the legal/title issue is cleared). In my experience, Chord Energy has been VERY suspense happy, even when there is no actual title issue. We had to get an attorney involved to get those funds released, and it took two years. Ridiculous. We think they are overwhelmed after taking over for Whiting? That’s best case scenario. Worst case scenario…I don’t want to go there because I don’t want to get paranoid. Anyway, it’s my understanding that any amount being held in suspense by the oil company is transferred to the new owner when you sell your mineral rights.
Second, if your mineral acres or well spacing area includes a river bank, then you may have royalties in suspense in accretion acres. Accretion acres are a hot mess in North Dakota. I don’t have the energy to look up that well to see if it includes river bank acres or not, so hopefully you’ll be able to figure that out.
Good luck. I’m stubborn enough to keep up with the fight rather than selling, as well as sharing our experience through this forum. We’re down to just the accretion acres now. If anyone has any information on accretion on the Yellowstone River in McKenzie County, North Dakota, I’d be very appreciative!!! In the meantime we wait for the wheels of the legal system to turn ever so slowly.
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Thanks for the advice. Something like that did happen to us when the well started producing in 2010-11 and we needed to submit death certificates etc to transfer it to me-got a nice big check in 2013! Not so much since. I do think the company drilling at that time sought us out to tell us we needed to make sure to transfer the title to me from my mom who died many years before they actually drilled. You’re right about the contract saying that any production already done and being held wherever belongs to them.