Andrew:
One reason is the lack of infrastructure in the Williston Basin area. In other words, existing pipelines not able to carry the amount of crude produced so rail and trucking gets expensive. Hoping this will change in the future.
300% penalty in Montana vs. 50% in North Dakota.
So Louise, I would say non-participation in a Montana well would be 250% worse than doing so in North Dakota.
RE ND; Mark Skipper noted that “…forced pooling law apparently is extremely , extremely advantageous for unleased mineral owners included in a unit…”. Is this also true of MT? If a mineral owner stays unleased will the oil company make them demand payment once the well costs are satisfied or will they be notified? thanks for any information.
Zeb, you are welcome to your opinion on force pooling, but for me getting 75% as much as those who leased from the first barrel and reaching payout on well cost and penalty in 2 to 2 1/2 years and receiving 100% royalty less cost of production and operating [ extremely low ] from then on, well lets say in my opinion it’s an advantage to make 4 to 5 times as much off my oil. Lets put it this way, we all know oil companies are poor, right ? I will be making 16% to 20% more per acre than the oil company because…I don’t have to pay anyone but me a royalty on my acres.
Zeb, out of curiosity, where are you getting your information ? Can you provide some reason why you hold the opinion that not signing a lease and being force pooled has no advantage regardless of where you are ?
rw and Zeb:
I can understand both sides each of you presented. I think what Zeb is saying is that the “risk” factor involved in forced pooling is greater than he wants to deal with. Participating in a well involves alot of understanding regarding different legal agreements such as the Joint Operating Agreement, Gas Balancing Agreements, etc. Some mineral owners just want the best bonus/royalty available for thier area and not worry about the legal aspects of the participating partnership.
Zeb, when the mineral owner pays, it’s called participation.
If you are carried, the operator is footing the bill, that is why he is entitled to the risk penalty, my portion of the well and penalty have to pay out and I will be getting my 100%, less the amazingly low costs of production, before I have to pay anything out of pocket. If I am carried the life of the well and it never retires the penalty, I am not paying the cost to plug and reclaim the drillsite either. I still wonder where you are getting such information to the contrary.
Right Charles, I see that some with hold some acres from participation, a percentage, and in doing so balance that higher risk with lesser risk. RW what i meant by pay was being penalized.
Joel, if I understood your question, even if the same company was involved and you are being carried/nonconsent, you are not liable out of pocket for cost of the well or anything out of pocket. The liability you need to be concerned about is “after” they have collected your participation cost and the penalty. You then have a working interest and all the crap in the JOA becomes even more important and you NEED to protect yourself from all the same lawsuits that the operator is liable for. Except for gross negligence that didn’t involve you. Insurance, form a LLC or Trust…basically, you need to consult a mineral attorney at that point. While you are being carried you don’t have personal liability.
Ok a little side-step … has anyone used the online commercial ‘Daniels Cty’ data bases for paperwork research? And if so are they worth using? Thx
Glen:
This is somewhat common for this area in regards to permit applications. Most likely, the company will observe other well completions in the area prior to drilling unless the majority of the acres is nearing expiration then the story may be different. Permits to drill are easy to aquire as is renewal of a permit. At this point, it is sometimes had to second guess these companies as to what their next actions might be. I am at the point that when a drilling rig arrives and spuds, you will most likely get a well. Good luck.
Thanks Charles, that’s about what I figured. We are not even 1 year into a 4 year lease and know the activity in the Bakken is very busy with areas more proven than ours. Isn’t it still about a year after/if they start producing before we would see a royalty check anyway?
Charles, I have minerals, (need to probate) in Roosevelt County, really close to Wolf Point. How long do I have before I need to get this done, in your opinion?
Joel, the answer would be no. The operator would only have a lien against the minerals he tried to produce. Your minerals leased or unleased in another spacing are not fair game. Each spacing is it’s own economic entity.
I know this question has been asked before but I don’t have a clue on how to search the answer in this forum. Anyway, we have been recently notified that an exploration and drilling permit has been applied for in our spacing unit. What might be the typical scenario be from this point? I understand this could be all over the board as far as what to expect from this point but what might the best and worst scenario be? We are in Richland county.
Glen:
Most likely, if you are into only 1 year on a four year lease, it will be sometime before drilling will occur unless several others in the unit have expiring leases in the near future. After these wells are drilled, the lag is in the fracking procedure as the lack of frack crews results in many wells waiting several months for completions. I have minerals in Roosevelt County (to the North of you) and I keep up with MT fairly closely. The activity is just now picking up in this Eastern MT area and hopefully, things will be on the upswing if a few very good wells are drilled. We still may be over a year away from any extensive drilling in the MT area.
Andrew:
I don’t know the exact amount of time you have to probate but I would take action immediately. If you need legal assistence regarding this matter, I used Laura Christoffersen in Culbertson, MT. The law firm did a great job and the price was reasonable.
Sometimes these Oil companies are actually “fronts” for other companies. For example, SunDance Oil is the company we signed our lease with several years ago…which was a front company for Xenergy Oil at the time…Thus, not sure who Grace Oil is…or who they might be fronting for!!
All,
Anyone heard of Grace Oil out of Dickinson? Out of nowhere I’ve gotten a solicitation to lease or sell and can’t find any info on them. Thanks in advance.