Does anyone ever refuse to lease thei...

Springfield, MO

#68 Jan 23, 2012
how long do mineral lease last
little joe

Bismarck, ND

#69 Jan 23, 2012
My mom has some in land in south Bottineau county and all the land around her is leased, but land. Dosen't the leasing companies need to have all the land leased? And how should we go about in getting the land leased?

Avondale, AZ

#70 Feb 19, 2012
If there are oil wells all around a property I want to buy, is there a chance royalties could be out there? Typically, when does someone get paid if the mineral rights were never sold, yet drilling and extraction was done nearby? Is there even a chance there could be royalties? I think I found a property with mineral rights and need to know if its worth it for me to purchase and shoot for the American dream or just forget about it. I need info. I found several properties in Texas that are small but have mineral rights. What should I do?

Brooklyn, NY

#71 Mar 22, 2012
My family has valley Montana of all mineral rights, It has a well on 320 ac. And well on 80 ac. Both are caped.Whats the next move?What's something like this worth? The land is in the Bakken area

Phoenix, AZ

#72 Apr 9, 2012
How do I find out if my husbands name is on any mineral deed in ND?
kennedy 817

Hurst, TX

#73 Apr 12, 2012
Jean, it could require a courthouse records search. Many counties have records going back 20 to 25 years which are searchable online with a $25 per month subscription to the NDRIN North Dakota Recorders Information Network. Do not forget to cancel after the first month or it will be a recurring charge on your credit card. If you find your husband owns minerals, do not forget to make a fresh statement of claim as you could lose them to the Dormant Minerals Act if not used or claimed every 20 years or less. Good luck!

Williston, ND

#74 Apr 12, 2012
Here's a scenario.
2 sections of land...neighboring sections, lets say section 17 and 20. Section 17 was and still is leased to Company A from 1980 and has a 1/8 royalty payment being made on an old well so there is an old lease (no pugh clauses then) tying up that section, leaving it "stuck" at 1/8 royalty. My share of those acres is 18.

The other section is a new lease with Company B and 19% royalty and my share of those acres is 17.
A 2 section Bakken Well is drilled by Company B that enters property leased and held by Company A.
I own in both these sections and am having a dickens of a time figuring out:
1. Who pays for Section 17 acres tied to the 1980 lease? Company A who holds the lease or Company B who drilled the new Bakken Well?
I am envisioning 2 checks, one from the Old leasor, company A and a separate from the new leasor, company B.
2. How do I calculate my percentages.
I know you take total acres owned divided by the total acres in the two sections but...when you have a situation like this, does that still work?
Kennedy 817

Hurst, TX

#75 Apr 14, 2012
EllyM, you should get 1 check from the operator of the new well for the acres in both sections. You will be paid 1/8 royalty for the acres under the old lease and 19% for the acres in the new lease. The operator of your previous well will continue to pay you for that wells production.I treat each well as it's own economic entity. You will probably have to treat each spacing as a seperate entity under the new well to keep the numbers straight. Sorry I can't be more help than that from what you have given me.

Williston, ND

#76 Apr 14, 2012
Thanks for the information. That does give me some assisetance. I was hoping it would only be one check. I can certainly calculate out each section separately based upon their separate royalties.
kennedy 817

Hurst, TX

#77 Apr 15, 2012
EllyM it will be one check but you will have to figure the sections seperately to make sure the accounting adds up. Operators do make mistakes and generally are pretty slow to correct them unless they are in your favor.
kennedy 817

Hurst, TX

#78 Apr 25, 2012
I just read this thread again. I have to disagree with Big Fish. Leasing is not the way to Beverly Hillbillies money, ownership is. When EOG says they make $60 from each barrel of oil that is after well cost which includes leasing cost and legal fees and paying you your lease royalty. If you are getting a 20% royalty the oil company is making 3 times as much off your oil after cost to produce. I went carried interest in ND and received 16% royalty from the first barrel, just as if I had leased and the other 84% is going to pay for my part of the well and a 50% risk penalty which should be paid off at 150k barrels at todays prices. I am at 99,200 barrels right now after 6 months, which was 123 days of actual production. I will soon be receiving 100% royalty although I have to pay the extremely low production costs out of that. You wouldn't believe how low the day to day operating cost is. This is not my first carried interest well. The other is older and took 3.5 years to pay off. The old well cost $105 to operate and pay for surface equipment for 3 months and paid $1725 for 3.3 acres for 3 months. Figure 20% of that if you leased or $345. That's $115 a month vs my 540 a month, and that is if you bargained for a 20% royalty! I comfortably put back 50% of my well earnings for expenses now and in the future. The laws of ND are more generous to the mineral owner than elsewhere, study your state laws and consider that a lease may not be the very best you could do. Jed Clampit was an owner, not a lessor.

Mesa, AZ

#79 Jun 26, 2012
Good evening,

My family currently holds mineral rights in Harding County, SD. My question is, do mineral rights expire and if so what do we need to do to protect ourselves?

Thank you in advance,
kennedy 817

Hurst, TX

#80 Jun 27, 2012
SouthDakotagirl, I could not find reference to a dormany minerals act in SD. I think it's likely, but not certain that SD does not have one, as many states don't
Illinois heirs


#81 Feb 6, 2013
Our lease with a major oil company expires in May.
There are sections with active wells and sections with confidential wells. We would like to re-lease the unworked minerals to another company as we have a Pugh clause in the original lease. Should we call the leaseholder to find out what minerals remain unused, or does the new landman do that? The minerals are in Dunn & McKenzie counties.
kennedy 817

Hurst, TX

#82 Feb 7, 2013
Illinois heirs, if all your minerals are on one lease, even with a pugh clause your lease could be extended in the primary term if the operator is continuing operations to gain production. How long is the continuing operations grace period and when was the last time the operators did any work? The continuing operations grace period can extend a lease for years as long as the operator continues to drill or make preparations such as, build a pad, dig a pit, grade a road or drill a water well anywhere on the leased premises.

I hope it was your lawyer that wrote the pugh clause and the continuing operations clause and that the continuing operations clause timeframe is short, hopefully no more than 90 days. If your lessee wrote the clause, it may not protect you as it might seem at first glance. If the lessee wrote the clause, you should reread it and consider it carefully with the broadest possible interpretation.

Calling the lessee to see if they consider the non-productive acres to be free to lease again would certainly confirm if your pugh clause is effective in the lessee's eyes. It's worth a try. Good luck!
kennedy 817

Hurst, TX

#83 Feb 10, 2013
In fairness I have to report than in a well I went non-consent and am a carried interest that things did not go right. There was a mechanical failure. The operator plugged the wellbore of my producing well to try again to get much better production.

In the process the operator ran roughshod over my right to recover as much oil as possible from the well and even swore a false statement to a federa government agency that I had been notified. I was denied the chance to protest. The end result is that I negotiated a deal with the operator that I will not protest or turn them in for swearing false statements and in return I and my brother have NO RISK PENALTY for the old or new well/s wellbores.

If you don't lease, you still have rights and they have to respect those rights or there are consequences. If you lease you have an enormous cliff to climb before you can ever even state your grievance.
Illinois heirs


#84 Feb 11, 2013
Thanks Kennedy 817. Here are a couple more questions. Is $1,500 a net mineral acre a pretty good offer for the unused minerals when a lease expires? In another case, we leased our minerals in the MO River in 2010 and according to the map of the section on the ND gas & oil commission well search site, there is a pipeline running north to south thru it. Would we be entitled to royalties from this even if it is an old pipeline?
kennedy 817

Hurst, TX

#85 Feb 11, 2013
I. Heirs, It depends on where your minerals are. Out in the hinterlands there are places where people would jump at $1500, in better areas $4,000 an acre isn't enough.

The state owns the river and there have been lawsuits where the state has tried to claim the minerals also. The pipeline is probably in the river because there is no private surface ownership and it would be the surface owner who would be paid for a pipeline.

I don't have scientific proof but from observable data, some of the most productive mineral acres are next to and under lakes and rivers. If you ask yourself why the water is there, it's there because it's the low spot. If it's a low spot today, it's very likely it was a low spot millions of years ago also, a low spot where organics would have pooled. Some of the state land leased near rivers has leased for $12,000 or more per acre and at least 3/16 royalty. I have a friend who has acres near the river next to the states acres that leased for $11,000 and the operator only offered him $2,000. My friend participated for 10 acres went non-consent for the other 20. The funny thing is that the operator has paid him $50,000 already for the working interest and has yet to bill him for the working interest cost of $80,000. I told him to just bank the checks until he does receive the cash call and write them a check. My friend is essentially participating for nothing out of pocket. That's how unorganized oil companies are because they beieve that everything can be fixed later by a lawyer or by writing a check. Usually they are right, because people do not know their rights and lawyers don't want to secure your rights, they want to broker a deal which results in a win for the oil company, win for the lawyer, and maybe you didn't totally lose.
Illinois heirs


#86 Feb 11, 2013
Kennedy 817: Wahooo! I just received a division order from the oil company drilling at the river.
The well is on the shore and the pipeline I saw on the map is indeed our pipeline. In the case of the expired lease and my wanting to know if $1500 was a decent offer, it is in a productive area at the Dunn/Mc Kenzie line 148 95 & 96. I suspect that $1500 is good, but I'd ask for more and might get it. I appreciate all of your good advice and wish I knew as much about this oil leasing business as you do. But, I'm getting there little by little.
kennedy 817

Hurst, TX

#87 Feb 11, 2013
I have acres in 149 96 and they were going for more than $2,000 an acre 5 years ago. 148 95 is close enough to the center to be called core Bakken, which means that there is Bakken and Three Forks produceable zones.$4,000 per acre probably wouldn't be out of line. In 148 93 in Dun county I negotated $3,000 per acre and turned it down to go non-cosent back in Nov 2010. Last time I talked to the operator they told me I could leae at any time if I wanted. I wonder why they would offer me all that money? One of my wells there has produced alone 197,200 in 18 months. I'm about to have the really bad problem of trying to figure out what to do with all the money. I guess they want me to lease to save me from the money.$6,000 and 20% wouldnt be out of line in this area.

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