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North Dakota

Oil leasing and drilling activity around the McKenzie Cou...

Permits are slow and the further NW you go the fewer rigs you find drilling. They don't care about us anymore.  (Feb 9, 2011 | post #915)

North Dakota

Oil leasing and drilling activity around the McKenzie Cou...

Top leasing almost 2 years out. Wow! No, I haven't. What that says is that the companies really want to keep someone in the fold. ======== Top leasing for general knowledge is where one is already under lease, but the company holding the leases offers and gets the mineral owners to sign a new lease before going on the market.  (Feb 8, 2011 | post #908)

North Dakota

Oil leasing and drilling activity around the McKenzie Cou...

Go with Kennedy; I confused Montana rules - the 12 1/2% etc. Sorry  (Feb 8, 2011 | post #905)

North Dakota

Oil leasing and drilling activity around the McKenzie Cou...

Jerome. I should have said 50+%. So 51% sign - in ND that is enough. So 4 people equally share a quarter - 160 acres. Three need to sign for that 160. The other three quarters of said section need to be resolved on their own. ======== If the original quarter, hypothetically, we're subdivided already into two 80's; Then the first had one owner. That owner has to sign for the operator to include them. Otherwise we get into penalties being assessed for the cost of drilling, except that I believe that an automatic 12 1/2% is that 80 acre mineral owners royalty until the cost of the well/fraccing etc is fairly recovered. Then the second 80 has five owners. Three need to sign. Let's say that 2 sign for X royalty. Its not enough. Later the other three - who root for the other political party at Thanksgiving and Christmas, sign for XX royalty. Company A, who has not signed the first 80 owner, but has signed three from the second 80, now has 80 NET acres it can declare on its stock prospectus. Company A will have to pay all the owners of the second 80 the same. The first 80 owner will get the minimum 12 1/2% until their well cost expenses are paid off or they give in and sign a lease. DYODD. Big grain of salt. I think this is the way it is.  (Feb 7, 2011 | post #903)

North Dakota

Oil leasing and drilling activity around the McKenzie Cou...

jerome: Everyone shares in the 4 wells. Not always equally. You could have 1/8th, 1/6th, 1/5th and 3/16th. Additionally, there could be a lot of different percentages of different parcels within the section. For instance one person could own a quarter (160 acres) and have a recent lease where they are on a 1/5th royalty. Then I have a 10 acre share of a trust that is on a 1/6th royalty. The long and short of that is that the guy with the quarter and the better lease would get nearly 20 times more than I would. Even though he has only 16 times the acreage. moral of the story. Pay attention to the royalty, perhaps more so than the bonus. This is especially true with so many areas having 100% success rates. =========== Now as I understand it, there can be exceptions. For instance on the 10 acre portion I have of a trust if I sign with a landman for X terms {I'm stupid and sign right away}, then the rest of the family is smarter and signs for 2X terms. I believe that now I'm in for the same amount as the rest of the family IF the 2X company is the driller. Over 50% of a parcel is the key. Don't bet the farm on that. Big grain of salt as I've only heard that from a landman.  (Feb 7, 2011 | post #900)

North Dakota

Oil leasing and drilling activity around the McKenzie Cou...

Shirley: Going to T152N, R99W at http://www.land.nd .gov/ I see where sections 24, 25 and 31 were just leased last year for $2,300 and $3,100 bonus/acre respectively in Feb for 24/25 and November for 31 - last year. Again, respectively by Continental and Kodiak. Both 1/6th royalty 5 year leases. This is the state land auction. ---------- Looking at the https://www.dmr.nd .gov/oilgas/ GIS Map it shows very good activity in neighboring sections 19, 22, 23, 24, 25, 26 and 27. Your section 28 is in a 1280 spacing unit with section 33. Hope that helps some.  (Feb 6, 2011 | post #893)

North Dakota

Oil leasing and drilling activity around the McKenzie Cou...

Dale: Sorry, I cannot. My apologies for not having a clue. Could you try this forum? Bakken Shale Discussion at http://groups.goog le.com/group/bakke n-shale-discussion Someone there may be of help.  (Feb 6, 2011 | post #891)

North Dakota

Oil leasing and drilling activity around the McKenzie Cou...

Well the number of rigs sure is encouraging.  (Feb 6, 2011 | post #889)

North Dakota

Oil leasing and drilling activity around the McKenzie Cou...

Charles: Slawson is a mystery to me. They want to be that way. They are very independent and good for them. They have dropped the Puma and Lancer Federal permits but applied for the Rampage 1-28-33H permit that is close to Lancer. Rampage is on the border. (Mont side), about 3 miles SSSW of your ND Property. So they still have some interest in the area. I am not aware of any Slawson plans for actually drilling in our area. Again, I think they may be sidetracked with Niobrara over in Colorado/Wyoming.  (Feb 3, 2011 | post #883)

North Dakota

Oil leasing and drilling activity around the McKenzie Cou...

Shirley: Don't know. The basic process is: Secure leases from the mineral owners, as many as possible, Apply for and get spacing unit(s) Apply for and get drilling permit - sometimes requires co-enviro paperwork, Survey then Set up the pad - could entail getting 3-phase power in, roads, set up some temp tanks, a big catch basin for any accidents and some mud and so forth. Actually drill the well, Then Frac it in most cases. ============ You're waiting on the permit, which still doesn't mean anyone is going to drill. (see below)  (Feb 3, 2011 | post #882)

North Dakota

Oil leasing and drilling activity around the McKenzie Cou...

Charles; That's interesting about the special attention those partial sections are getting for spacing units. Trivia; If you look at the GIS Map go down about three miles into T156/R104W. Note the odd spacing unit that is 2 1/2 sections and runs east west. I don't know anything about it but it is interesting. =========== Shirley, I've seen that wording a hundred times but I don't know what it really means. But I'll put my right foot in my mouth beside my left. I think that is the standard legalese for applying for 35 spacing units. The eliminating the set back refers to how the new technology is in the process of changing the old rules. There used to be set backs to stop or limit the amount of oil that could be 'taken' from someone else. This was based on the thought that oil was in a pool and typically a 660 foot set back from the edge of a spacing unit would be appropriate to protect neighbors. Now we find that in these Bakken and Three Forks 'pools' etc aren't really pools. Even after fraccing it looks like 500 feet out is possibly max. So some sort of reduction in the set back at the start and end means greater utilization. Common sense. tool error and relief I don't know what exactly that could be about. All the best  (Feb 2, 2011 | post #878)

North Dakota

Oil leasing and drilling activity around the McKenzie Cou...

The first bakken wells drilled were in the 1950's. On Mr. Bakken's property. Seriously. What you really asked about are the first horizontal multi-fracc wells drilled. These are only a couple of years old so no one really knows what their lifespan is. ================== this might be helpful: "Bruce Oksol said... The big question is whether IPs / 24-hour backflows have any relationship to the total ultimate recovery of a particular well. We will not know for several years. The oldest wells in the current boom were drilled in 2006, but only recently have they gone to multi-stage fracturing, and I still don't think there is any consensus on optimum number of stages or mix of proppants. And, of course, the geography of every well is different. CLR, perhaps the "face" of the Bakken, clearly states that "IPs Correlate with Higher EURs." CLR could not be an clearer. That is the title of slide number 37 of the 79-slide presentation by CLR for the Investor Day 2010 Conference. You can access the presentation at the CLR website: http://phx.corpora te-ir.net/phoenix. zhtml?c=197380 &p=irol-presen tations. November 16, 2010"  (Feb 1, 2011 | post #874)

North Dakota

Oil leasing and drilling activity around the McKenzie Cou...

A heads up. To anyone reading this make sure your relatives don't sign right away if you share mineral acres. If a company can get over half to sign on a property then they're good to go. You could get stuck with what someone else signs for with regard to the royalty and that's without a bonus. For your sake I hope you didn't discuss politics over the holidays and you still get along with immediate family and even in-laws. =========== Historical: 10 years ago about all that was available was 5 years leases - now 4 and especially 3 year are common. Think 3 as if the signing company doesn't act you're back on the market quickly. Again a few years back a 1/7th royalty was the standard with a few better leases like the BIA mandating a 1/6th. (This meant that Indian lands were avoided because of that higher royalty and also for other reasons). We've moved through those to 3/16th and now 1/5Th (20%). If you are in a hot area you probably should hold out for 20%. This is usually the most important item as many of these operators are getting 100% success rates in their prime areas. The bonus is what gets everyones attention as that means money in a month or two. We signed for a Montana Roosevelt Property for $150/acre bonus in early 2007. I think it is worth $700 now and might be worth 3,000 if the area gets some wells producing from the Bakken. We were offered a $350/acre bonus for a ND property 14 months ago, then started negotiating and eventual were included in an auction and got $2250/acre. ============ It strikes me that everything about the offer to Spyder is a glaring red flag when looking at the neighboring state lease auction figures.  (Feb 1, 2011 | post #872)

North Dakota

Oil leasing and drilling activity around the McKenzie Cou...

Jim O: " is there any way they can use this spacing to by pass my acreage when they frac.? I don't think so. Even if it is a company different than the one leasing your mineral acres they have to pay everyone in the spacing unit. I am not aware of any spacing units being set up in the modern era that avoid, say a quarter section. I believe the Royalty rate you would receive from a company that drills and succeeds but does not have you signed or is not in an agreement with the company that does have you signed, is 1/8th. But it gets complicated with the fee that can be charged for development of the well if your company is not in agreement with the drilling company. "can I still get a permit to drill vertical on my 160 acres? Yes but you are going to be in a one section spacing unit and will have to share with the rest of the section Mineral Holders. Its the law in North Dakota. The other thing is I am getting several offers to sell my mineral rights so I would like to find a way to calculate what an average well......." Please consider that you are probably going to be giving up oil revenues in 2-4 other strata besides your first well. That America's oil needs are most probably going to still be there for a couple decades. Most of us consider it very foolish to sell mineral rights in the Williston Basin.  (Feb 1, 2011 | post #862)