I was deeded 33 mineral acres in Divide Co ND from my Stepdad back in 2005; they were supposed to belong to me and my siblings, but my mom did not get them put in our name before she died. It was very much her wish they belong to us, as that was all she had to give to us. Anyway back in 2008 Sundance Oil and Gas leased them back to my Stepdad; we were aware of it then we tried to get in touch with Sundance but with no luck so it was forgotten about until now. We were just not sure if they actually belong to us so I finally contacted a lawyer and had him look at the Mineral Deed and he said they have belonged to us since 2005. I contacted Sundance and right away they realized they had made a mistake and said they wanted to lease them from us for $400.00 per acre and 17.5% roralty, that was 4 weeks ago. The lawyer told me the going rate is more like $800.00, after not hearing from the sundance guy I called him today and he offered me $250.00 for 2 years, should we take that or ask for more? Should we ask the lawyer to do the negotiating?
Monica:
You need to shop around for the current bonus rate for that area as it is much higher than you have been quoted. Do some research and find the various companies who are leasing in that area and contact their land department. I would not sign for a term longer than 3 years and ask for 20% royalty. Try to educate yourself on the lease contents and understand what you are signing. Just remember, these are your minerals and you lease them on terms that are acceptable with you, not the landman. This is a very active county and has proven production. Saying this, I feel you should get a great lease for your minerals.
Thank you, I did have a lawyer in Williston do some research and he said $800.00 at 18.5% was the going rate, when I told the landman that today he said that was too high for 2 years and he is considering $600.00 for 3 years. Are we necessarily locked into leasing from Sundance or can I contact another leasing agency to see what they offer. Between me and my siblings we have a total of 135 acres in 2 sections; I am afraid if we do not take an offer they will leave us out, is that possible?
Monica:
I don't see that you would be legally binded to Sundance unless their lease has not expired. You can contact any company to establish a new lease or if the current lease has not expired, you could possibly top lease the area which would take effect when the lease does expire. If Sundance has acreage leased around you, I would say you hold the upper hand in negotiations. Just remember, if necessary deal directly with whoever makes the final decision. If you're not satisfied, shop on further as this area is very active and proven. I was confronted with a similiar situation and when I contacted the real company decision maker, I got my price and terms. Good luck!
Monica Carol Rosten said:
Thank you, I did have a lawyer in Williston do some research and he said $800.00 at 18.5% was the going rate, when I told the landman that today he said that was too high for 2 years and he is considering $600.00 for 3 years. Are we necessarily locked into leasing from Sundance or can I contact another leasing agency to see what they offer. Between me and my siblings we have a total of 135 acres in 2 sections; I am afraid if we do not take an offer they will leave us out, is that possible?
Ms. Rosten, you will not be left out. The industrial commission in N.D. exists to regulate, maximize production and prevent waste. The operator would have to have a very good ( and probably geologic ) reason for trying to exclude you. I have wells without leases and they just pool you anyway. It’s not the end of the world.
Not the end of the world except for the fact that you don’t get any bonus money and have to wait until the well pays for itself one and a half times (150%). You are also liable for additional costs. In other parts of the Bakken, where wells are more productive, this might make sense, but in Divide County, I would look to sign a lease.
r w kennedy said:
Ms. Rosten, you will not be left out. The industrial commission in N.D. exists to regulate, maximize production and prevent waste. The operator would have to have a very good ( and probably geologic ) reason for trying to exclude you. I have wells without leases and they just pool you anyway. It's not the end of the world.
You still get the weighted average % of what other lessors in the pool leased for or a 16% cost free royalty, whichever the party that is carrying you elects, FROM BARREL 1. You do not have to wait till the well recovers 150%. Are you deliberately spreading that misinformation, that you get nothing till the well recovers150%? After the well and penalty are paid for, your royalty is 100%, less cost of production. I don’t believe they are drilling 9 million dollar wells just to recover their costs plus 50%. I did not advise Ms. Rosten not to lease. I also saw no reason for Ms. Rosten to feel uneasy, or to have to worry about being “left out”. I had a call this very evening from an operator drilling a third well in a spacing I’m unleased in saying they still believe they can work something out with me. I still say it isn’t the end of the world. Educate yourself on mineral rights ownership. Don’t panic. I also believe if you are going to hire an o&g professional landman/attorney, don’t wait till the end to do so. I think they will be better able to guide things in the direction you would like them to go from early on. Finding someone who will do a thorough job of protecting your interest may be hard to find.
M A Miller said:
Not the end of the world except for the fact that you don't get any bonus money and have to wait until the well pays for itself one and a half times (150%). You are also liable for additional costs. In other parts of the Bakken, where wells are more productive, this might make sense, but in Divide County, I would look to sign a lease.
r w kennedy said:Ms. Rosten, you will not be left out. The industrial commission in N.D. exists to regulate, maximize production and prevent waste. The operator would have to have a very good ( and probably geologic ) reason for trying to exclude you. I have wells without leases and they just pool you anyway. It's not the end of the world.
Right now the minerals in question are leased to my stepdad who deeded them over to us in 2005; Sundance somehow made a mistake in 2008 and had him sign a lease until 2012, that is why we want to get this straightened out. His lease is no good am I right. I think that is why Sundance is offering such a low offer.
Ms. Rosten if you have a deed in your name from 2005 the lease your stepfather signed in 2008 shouldn’t affect you unless he had power of attorney or some similar situation. Whether your stepfather is in trouble will depend on the lease wording. If the lawyer is experienced with oil and gas leases, you trust him, and his fee seems reasonable, to you, he may be a good choice to negotiate for you. I still think you should seek out examples of leases so you can see how they differ and you can ask the right questions. Good luck!
You should find out what is going on around the property. If the company recently drilled a dry hole on the lands or on lands nearby, you may not be in a good negotiating position.
R dubya,
My we are a bit defensive. Obviously, they are not drilling to recover just 50% of the costs, but if you do your homework, which I suggest you do, R -dub, then you will see that the wells in Divide aren't paying out at the same rate as in other counties. So lets see, it probably isn't the end of the world if you get force pooled, but I would take the 20% royalty over the 16%. How many acres is it Ms Rosten and do you own the surface? Oh yeah, and heed Mr Kennedy's advice in previous threads and take cash. Don't take a draft, otherwise you might not get paid (although this is extremely rare). That's what most educated landowners do.
James H. McConnell, CPL said:
You should find out what is going on around the property. If the company recently drilled a dry hole on the lands or on lands nearby, you may not be in a good negotiating position.
No MAM, just tired of people leaving out the other side of the coin or professionals making it look worse than it is. If there isn’t any oil there it’s a choice between 20% of nothing and 16% of nothing. A lease won’t save you from a dry hole. MAM, you stated you have to wait till the well recovers 150% and that you are liable for additional costs. MAM, these additional costs are the same as the operators, in proportion, and are assessed against your production. If the operator makes money, you make money. If there is no production, they could put a lien against the minerals that aren’t there. Sounds scary. MAM, I think you are very generous, elevating Ms. Rostens offer to a 20% royalty. If your bonus per acre is equally as generous; I think Ms. Rosten should lease with you. The last I heard Ms. Rosten was offered 17.5% which isn’t a far cry from 16%. Once again I never advised Ms. Rosten not to lease. I also would like to repeat that I think " being left out " in the state of N.D. is the least likely outcome. Ps, You could say this is my defensive post. Have a nice day MAM.
M A Miller said:
R dubya,
My we are a bit defensive. Obviously, they are not drilling to recover just 50% of the costs, but if you do your homework, which I suggest you do, R -dub, then you will see that the wells in Divide aren't paying out at the same rate as in other counties. So lets see, it probably isn't the end of the world if you get force pooled, but I would take the 20% royalty over the 16%. How many acres is it Ms Rosten and do you own the surface? Oh yeah, and heed Mr Kennedy's advice in previous threads and take cash. Don't take a draft, otherwise you might not get paid (although this is extremely rare). That's what most educated landowners do.
James H. McConnell, CPL said:
You should find out what is going on around the property. If the company recently drilled a dry hole on the lands or on lands nearby, you may not be in a good negotiating position.
Dear Ms. Rosten,
Based solely on what you said, tell Sundance to release the bad lease they bought. Otherwise, you will sue them for slander of title to your mineral estate and loss of leasing revenue.
Don't tell this to the landman whom you are dealing with. Tell this to the Land Manager of Sundance.
You are free to lease to whomever you want. It is your property.
What do you mean by relesse the bad lease, is it wise to contact my lawyer and have him handle this?
Buddy Cotten said:
Dear Ms. Rosten,
Based solely on what you said, tell Sundance to release the bad lease they bought. Otherwise, you will sue them for slander of title to your mineral estate and loss of leasing revenue.
Don't tell this to the landman whom you are dealing with. Tell this to the Land Manager of Sundance.
You are free to lease to whomever you want. It is your property.
Best,
Buddy Cotten
Not being disparaging to your lawyer, but if he has not figured this part out, you need a new lawyer.
Monica Carol Rosten said:What do you mean by relesse the bad lease, is it wise to contact my lawyer and have him handle this?
Buddy Cotten said:Dear Ms. Rosten,
Based solely on what you said, tell Sundance to release the bad lease they bought. Otherwise, you will sue them for slander of title to your mineral estate and loss of leasing revenue.
Don't tell this to the landman whom you are dealing with. Tell this to the Land Manager of Sundance.
You are free to lease to whomever you want. It is your property.
Best,
Buddy Cotten
Can Sundance go after my Stepdad to pay back the money he got for the bad lease, the last time I talked to the landman/Sundance he was more or less blaming my Stepdad for their mistake. That is the last thing we want is to make waves as one of my Siblings is his biological daughter, and we all have a good relationship with him. I have contacted 3 other oil and gas lease agencies in the Williston area and none are interested in leasing to us after I tell them about the bad lease. Seems like the only option we have is to lease to Sundance since he said they want to lease to us, but not once has he called me back when he said he would, it has been almost a week when I talked to him last and he said he for sure would get back with me that day with another offer. Not sure what to do next.
Monica Carol Rosten said:
What do you mean by relesse the bad lease, is it wise to contact my lawyer and have him handle this?
Buddy Cotten said:Dear Ms. Rosten,
Based solely on what you said, tell Sundance to release the bad lease they bought. Otherwise, you will sue them for slander of title to your mineral estate and loss of leasing revenue.
Don't tell this to the landman whom you are dealing with. Tell this to the Land Manager of Sundance.
You are free to lease to whomever you want. It is your property.
Best,
Buddy Cotten
Can Sundance do that? I suppose so. However, they will never lease from you and your family if they did, would they?
Additionally, Sundance would open themselves up to real bad press in the area if they go around suing landowners over their own mistake. Your acreage is not that big for them to not absorb the loss.
I promise you that you are talking to the wrong person. Talk to the operator, or get someone to talk to them on your behalf.
At the end of the day, if your step-father did not warrant title, there is no issue.
My previous suggestion has not changed. Demand a release of the bad lease. You have suffered damage. Do not make a terrorist threat, but explain that your have suffered damage through their action of slander of title and loss of numerous leasing opportunities (keep notes on who turned you down because of the title issue).
Monica Carol Rosten said:
Can Sundance go after my Stepdad to pay back the money he got for the bad lease, the last time I talked to the landman/Sundance he was more or less blaming my Stepdad for their mistake.
Ms. Rosten, how much time is left on the lease your stepfather signed?
I believe July of 2012
r w kennedy said:
Ms. Rosten, how much time is left on the lease your stepfather signed?
Mr Cotton,
I want to find somebody to tell me why our part of the section was not included in a pooling contract that included land all around us and even part of our section. Like not being invited to a birthday party.
1. We have a lease with Hess.
2. Last fall we were contacted by Sampson, but I told them we had a lease already.
3. Later I learned (is this right?) that if Sampson wanted, it could have bought the lease from Hess...or is that all wrong?
4. Can forced pooling include land under lease to other companies?
5. Am I to assume someone knows there is no oil under our land?
6. Is there some way to find out if Sampson tried to contact Hess?
7. And if they did, did Hess have a reason for not working with them (such as plans for later)?
8. Or did Sampson just give up because we have a lease, or because they feel there is no oil?
9. Does every oil company hire someone to deal with specific questions about our leases?
I have tried calling everyone. Even met a nice Hess employee at petroleum conference.
I just want to know more and it is hard to find answers.
Thank you,
Sally in North Dakota
Dear Ms. Rosten,
Based solely on what you said, tell Sundance to release the bad lease they bought. Otherwise, you will sue them for slander of title to your mineral estate and loss of leasing revenue.
Don't tell this to the landman whom you are dealing with. Tell this to the Land Manager of Sundance.
You are free to lease to whomever you want. It is your property.
Best,
Buddy Cotten