ND Oil and Gas Advice Column
kennedy 817

Hurst, TX

#740 Mar 13, 2013
Tanya, sorry but I can't suggest an attorney. Not all, some would say not very many attorneys in th Bakken are trustworthy. Sadly I would have to agree, many would just milk for billable hours. I would suggest finding a realestate attorney and not necessarily an expensive oil and gas attorey. You may be able to work with an attorney far from the oil producing counties, who will probably be a little less busy and might not charge as much. Most attorneys up there work by mail anyway.
tanya

Mesa, AZ

#741 Mar 13, 2013
kennedy 817 wrote:
Tanya, sorry but I can't suggest an attorney. Not all, some would say not very many attorneys in th Bakken are trustworthy. Sadly I would have to agree, many would just milk for billable hours. I would suggest finding a realestate attorney and not necessarily an expensive oil and gas attorey. You may be able to work with an attorney far from the oil producing counties, who will probably be a little less busy and might not charge as much. Most attorneys up there work by mail anyway.
wouldn't my starting point be just with the court system. he didn't follow court orders so he's in contempt. its going to be a hot mess. lol.
thank you for answering me :)
kennedy 817

Hurst, TX

#742 Mar 14, 2013
Tanya, hoe log ago are we talking about? You can try the court system if it hasn't been to long, but if it has been a long time, they may not care and say you should hae spoke up sooner, unlesthere was other deception or you just tured 18 and couldn't do anything before. Te legl system does nothave t make sense, otherwise we wouldn't need lawyers.
kennedy 817

Hurst, TX

#743 Mar 14, 2013
Umm,that should read how long ago....embarassing. It ust be catching!
tanya

Mesa, AZ

#744 Mar 16, 2013
kennedy 817 wrote:
Umm,that should read how long ago....embarassing. It ust be catching!
lol
the divorce was many many years ago but we were unaware of the contents of the divorce papers. my brother just got a copy from the courthouse.
instead of our dad putting these in a trust he later sold them. without our knowledge of course.
kennedy 817

Hurst, TX

#745 Mar 16, 2013
Tanya, I hat to hear that. I hope you can recover your minerals. You definitely need a lawyer, you won't be able to do anything with this through public servants. The mineral buyer will lawyer up if there is any production, the statute of limitations have probably run for fraud, but it's possible that they have not because of your late discovery, you need a lawyer. I don't think a single party involved is goig to be truly happy, if you can get this settled at all.
kmp

AOL

#746 Apr 6, 2013
DMB wrote:
I have 1/2 interest in 160 acres in Dunn County 144N,93W
My father had an oil and gas lease that will expire soon. We have not been contacted by the lessor of the current lease. How will we know when the lease is no longer valid and we can start looking at new offers? There has been no activity on this property that we are aware of.
My family has 50% interest in 144N, 93W sect. 1, 12, 21 in Dunn County and had a lease but we took them to court and had the lease terminated as they never paid us the signing bonus but filed it as paid. I think there must be value in this area or why would they fight to keep the lease? Am waiting for offers none at this time.
DMB

Holly Springs, NC

#747 Apr 7, 2013
Our interest is in section 28 and I have been told there is no interest in this area, although when I look on the map, it looks like they are drilling close to this area. I was told the price of oil would have to go over $100 a barrel and stay there for there to be any interest in our section. From what I can tell by the map, there is a well in section 2 and 4, but I am no expert, so I may be wrong. If you have 1/2 interest in section 1, that might be what they are looking at?
kennedy 817

Hurst, TX

#748 Apr 13, 2013
Last post disappeared so trying this again.

KMP,DMB, the well in section 2 has produced only 25k barrels oil in 5 years, no oil at all in Dec, jan, or feb, this year but is producing a very small amount of gas so the operator [Hess] can hold the lese by production forever, paying the owners lunch money.

True, it was an early well and new completion techniques could double production. The problem is that a new improved 9 million dollar well that only produce 50k barrels oil in 5 years is still operating a a loss unless oil is $200 a barrel. This is bad news for the Bakken in this area.

All is not lost, the well in section 4 is a verticle Red River well and has done well, 263,308 barrels since 1980, which isn't a miracle but considerng that the well pobably only cost 1 million dollars to drill and complete. A new well probably would't cost more than 3 million for a verticle well, profitable.

Beter yet, the Red River can be horizontally drilled.

In your place, I wouldn't want the operator to drill a Bakken well and hold me and the valuable Red River formation for lunch money without producing the Red River. I would want in my lease that the operator can have the Bakken also but ony after rilling a Red River well.

If you want to try to hurry things along, I would try contacting the larger independants like SM Energy, although it's considered weakening your bargaining position to make first contact, it mght take years for someone to approach you otherwise. If you eally want a well now, do what you think best and good luck.

Since: May 13

Shakopee, MN

#749 May 7, 2013
New to the site, wondering if anyone can tell what is going on near our land. We're in the midst of negotiating leasing rights and would like to know a figure we should keep in our back pocket as we deal.

Township 151N
Range 88W
Section 7
18SW

Thanks for any help!
kennedy 817

Hurst, TX

#750 May 7, 2013
Hartzy, I replied to your post in the Oil leasing and drilling activity in and around McKenzie county thread.
Misslad

United States

#751 May 16, 2013
My mom and dad own 250 acres of mineral rights in Renville County.
Does that mean one day they'll drill there?
I don't think drilling has occured in that area yet.
kennedy 817

Hurst, TX

#752 May 16, 2013
Misslad, there have been a few wells drilled in Renville, unfortunately, the production at 35 bbl a day was not considered good in the Bakken zone. The Bakken is not the be all and end all, there are other formations but the virtual sure thing of the Bakken elsewhere has pretty much put an end to exploration in Renville for the time being. The fact that they can pull 35 barrels a day out tells you there is oil there, the tech gets better almost every day, there could well be profitable Bakken production in Renville but it could be a couple of decades off. With that in mind, I personally would take any reasonable lease offer, expecting that they probably wouldn't drill. Ten or more years from now would bear alot more scrutiny because they may have cracked the code and be ready to drill. Wish I had better news.
kennedy 817

Hurst, TX

#753 May 18, 2013
Kennedy 817 wrote:
<quoted text>.... They can't force you to take what they offered. You don't have to participate either. You can be a carried interest with an 1/8 [12.5%] cost free royalty from barrel 1 and they take the rest till 1.5 times the cost of your interest in the well is paid for. Then you get 100% royalty less the cost of production. By standing firm you may make alot more out of your oil.
I quote me again. You can go non-consent and they can't force you to take what was offered. It is 100% voluntary that you lease in North Dakota and Montana. I don't know who judged me wrong here but they obviously don't know what they are talking about

Since: Dec 10

Hurst, TX

#754 May 18, 2013
You can disregard the above, I believe that the judging that I thought was of me was of the person I was quoting. I only realised it after posting. These forum formats can be tricky.
virginia young

Denver, CO

#755 May 31, 2013
i had a contract from contennial in 2008 for 3 years,then SM took over the site and drilled a well(150-97 2@11, we just got a call from sm and something was wrong with the contract,so we got a new contract and the amount of net acres is different than the first contract, the gross is the same but net is smaller,they said that dosen't matter ,but they would figure it again,but need the contract signed. because the gross and my % is the same .I wonder if it matters I get 50% and my kids get theother 50%, but the net was different. i think they drilled the well when I didn't have any contract,so they offered me 2000 and 3/16%

Since: Dec 10

Hurst, TX

#756 May 31, 2013
virginia young wrote:
i had a contract from contennial in 2008 for 3 years,then SM took over the site and drilled a well(150-97 2@11, we just got a call from sm and something was wrong with the contract,so we got a new contract and the amount of net acres is different than the first contract, the gross is the same but net is smaller,they said that dosen't matter ,but they would figure it again,but need the contract signed. because the gross and my % is the same .I wonder if it matters I get 50% and my kids get theother 50%, but the net was different. i think they drilled the well when I didn't have any contract,so they offered me 2000 and 3/16%
Virginia, I would take my time and check all the possibilities. Being unleased with the well alredy drilled, you could choose to participate for some or all of the acres already knowing the well is good,
you could lease but demand more royalty, the going rate is 20% royalty or better and you could demand that no deductions for post production costs be subtracted from your royalty,
you could be non-consent in this well and receive a 16% royalty until the well pays out and recovers a 50% actual cost of drilling and completing penalty and then you get 100% less the cost of production, roughtly you get 16% for the first 1/3 of the wells production and then 80% after costs for the latter 2/3 production and the same for the other wells that SM will eventually drill.
You could also choose to sell your interest in this well only and retain your rights to the minerals and any other wells drilled after, which there will be.

Virginia, if you sign the lease you have right now, SM will have doged the bullet, there will be jubilation in the office. If you demanded what I said in your lease, SM will grudgingly accept because they still win if not a total victory, still a huge profit even if it's not as much as they want. All of the other options are leverage, if you do any one of them, SM loses very badly to totally, so if you want a lease, make sure it's a good one, the best you can get. If you are interested in the other options and making even more money from your minerals, search around on Mineral Rights Forum. There is time but this opportunity will not last forever. This is business, do not worry about an oil companies feelings, they would take your minerals and give you nothing if they could. By offering you 3/16 royalty they are already trying to take advantage of your ignorance of the going rate. XTO is drilling 3 new wells to go with the one they drilled in 2011, more wells are coming, make the most of it for your family. I'd rather see your kids with 72 inch flatscreen tv and driving convertables than some oil co executives kids. If you have more than a few acres, it can happen that way. If you just have half an acre, just sign the lease. The foregoing is the best advice I can give. Good luck!

Since: Dec 10

Hurst, TX

#757 May 31, 2013
Virginia, I houldhave lso sad he the abov referenced well drilled by XTO are right next to you and your acres are just as good. I get nevous about long posts disappearing.

Since: Dec 10

Hurst, TX

#758 May 31, 2013
Looks Like the problem has returned, have to hit reply from now on rather than just post or half the keystrokes give no letters.
Virginis, it should read that, I should have said the above referenced wells by XTO are right next to you and your acres are just as good and there will be more wells for you.
virginia young

Denver, CO

#759 May 31, 2013
Kennedy 817 wrote:
Looks Like the problem has returned, have to hit reply from now on rather than just post or half the keystrokes give no letters.
Virginis, it should read that, I should have said the above referenced wells by XTO are right next to you and your acres are just as good and there will be more wells for you.
i
I HAVE JUST 1/2 ACRE,NOT MUCH,BUT THE WELL IS NELSON 15-11 ,SO I GUESSVWE SHOULD SIGN SINCE ITS SUCH A SMALL AMT,

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