Mr. Murray, since we are talking verticle wells, it would depend on your exact legal descriptions. If you owned the minerals of the entire sections then yes, I would say you were owed royalty.
That should of course be vertical wells. I don't know what gets into my internal spellcheck sometimes.
Perhaps I am mistaken, but I thought that having a unit in place meant you would get some royalties from the overall unit production, not just if a well happened to be on your precise property.
I do see that someone is starting to drill horizontal wells in the neighborhood. Some of the vertical wells have been there a long time and most seem to be dry holes or abandoned.
If you have minerals in a section with the lateral from a long lateral horizontal well, it's almost a given that you would receive royalty.
The unit boundary for a vertical well or wells can be drawn in a nultitude of various ways and if you don't own all of the mineral rights or at least an undivided interest in all of the mineral rights in the section in question, you could be outside the unit boundary.
A lease my family had with EOG has expired- the end of November. Burke County T159N R90W Section 22. Do I need to send EOG a request for a Release and Surrender of Oil and Gas Lease form? I'm sure this was asked before, I just can't recall the answer. There are wells to the north and south of this property. I have the subscription to the Basic ND information service. Using the Eser website http://www.eser.org/22-159n-90w-burke-county-north-dakota
I believe that some of the leases in that section were extended although our lease ran out after the 5 year term. EOG renewed some permits in this area so I wonder when they will be coming back to this area.
Mary Beth, you can request a release but you may not get it. If a company does not need or want something from you, they often treat you like the newspaper from yesterdays fish. On the bright side, there are no permits in the spacing 21-22 so barring something out of the ordinary in your lease, landmen should be able to see that your lease expired according to it's own terms. I don't think you need do anything. I hope this helps.
My lease with Oasis expired due to lack of activity (shut-in). Even though the NDIC records show this status, and that the lease has clearly expired, another company that wants to lease the rights will not do so because Oasis has not filed a "Release Of Lease" form with Burke County. So R.W. Kennedy is quite right in that one becomes yesterday's fish wrapping. I am trying by phone and mail with Oasis to get the release with negative results so far.
Hal, I hate to say it but you may need to get a lawyer and record a notice of lease forfeiture to which Oasis would have 20 days to respond to the county recorder saying that the lease has not expired, it may help in leasing.
Thank you R.W. I'm waiting for a call back from Oasis to see if they respond to my request (wishful thinking on my part perhaps). I will say this about Oasis, strictly from my dealings- for others they may be the best operator on the planet. When I talked on the phone to NDIC I was told that they had mailed Oasis in Nov. of 2012 that Oasis had to either "1. Promptly return the well to production, or 2. Apply and receive Commission approval to abandon the well, or 3. Plug the well and reclaim the site." As of Nov, 2013 Oasis had not responded. If they won't respond to the NDIC I doubt that they'll listen to my pleas.
Hal, operators don't pay much attention to the NDIC because the NDIC rarely enforces any regulation. Looking in the well files I see three or four notices of violations and requests for the operators to comply. If the operators still treat the NDIC with contempt, then the NDIC sends the operator a cool and somewhat biting letter but still no action is taken. It takes a monumental act of deliberate negligence, probably of a scope and size where the NDIC could face trouble for not making the operator comply before the NDIC will act, just my observation.
I have seen a well that has maintained temporary abandoned (TA) status for over two years when I thought that one year was the maximum with extensions? We pay their salary but the NDIC does not work for us. I expect to see many people "retire" from the NDIC and start getting a paycheck from their second job working for an oil company. Once again, just my opinion but it happens many other places and I see no reason it would not happen in ND.
Shhhhh! They might hear you! God forbid any government entity enforce regulation against big business and it’s lobbyist. Still trying to figure where royalty tax dollars are going. They get taxed prior to my check then again out of my income. Not too mention the sales tax and etc. Thanks RW, you have turned me cynical on a Friday.
You are entirely wecome. I think it's helpful sometimes to remind people that the 11.5% production and severance taxes plus the state income taxes means the state benefits almost as much, if not more than you do from your lease and production. When you get a well, it's like the state just got a well of their own. Of course the state wouldn't like to see "their" well plugged because nothing of value can then come out of it. If they allow irregular TA status, someone might try to re-enter and fix the well if they don't have to drill out the plug and packers.
I want to thank the people who answer all of the mineral rights owner's questions, after inheriting and then coming in to this subject this has been a really interesting education. Knowing that I needed to buy membership to the recorder's records in this county, and doing searches, and paying for the well production information, it is all a LOT to understand. I've advertised my mineral interests on this website, and have received an offer. Researching the leases written and understanding it all subject by subject has taken a lot of time. I do see a lot of people sign whatever is handed to them, and others are adding their own Exibit A to the lease. If not for this website I would not have known any of this information existed. I'm hoping for a little better offer on my property, I am still boggled by the $34,000 an acre in the Mountrail county BLM sale. I must mention that after calling EOG for a release of my lease they were extremely helpful, polite, and even called me back to be sure I had been helped alright the next day. They sent the release I requested, and which I have filed at the recorder's office. Later and Thanks again all!!
A bit of a follow-up on a well (Rebne-117H) that was shut-in by Oasis in August, 2011 after producing about 67,475 barrels since it fired up in May, 2010. I figured that it was a good ride, I enjoyed the income and that was that. Then, in late 2013 I received an offer to lease the mineral rights to another company. Inasmuch as the lease with Oasis had expired due to the lack of production for over a year, I signed the draft check and the new lease. (Interestingly, or not, the first lease was for all 320 acres and five years. The new offer was for 160 acres and three years.) I waited for my new funds to come and the Division Order followed by lavish revenue from some unknown oil company. (I'm old enough, but I never learn.) Instead I got a notice that the new landman felt that there wasn't clear title because of the lease with Oasis. I explained that the lease had expired due to lack of activity but that wasn't good enough, I needed to have a "release of lease" from Oasis. So now I go off to do battle with Oasis, who doesn't give a hoot about the lot of some little ole mineral rights owner. And, in all fairness to Oasis, why should they? I write letters, I send emails, I phone (I get a name but phone calls are dumped into voice messaging). More emails, letters, phone calls to "the name" with no response. Finally, I Google Oasis and armed with the names of the president & CEO and the other executive officers I email "the name" and tell him that perhaps I'm speaking to the wrong person and perhaps I should go directly to the CEO. I receive a reply within 24 hours and 48 hours later FedEx delivers an envelope with the notarized "Release Of Oil And Gas Release" form. I send this to the Burke County Recorders Office and am now waiting for the money to start rolling in. Like I said, I never learn :o)
I wonder (I wonder a lot these days) if one should include in their initial lease wording to the effect that if a well is shut-in or not producing for (insert time frame here) it would be mandatory under the terms of the lease that the lessor send the lessee a written "Release Of Oil And Gas Lease." Certainly could save a lot of potential grief and legal expenses down the road.
Hal, some people have been adding that crelease clause to their leases for years and it should not be objectionable to the lessee because it is a small thing and the issue might not come up for decades.
I do not subscribe to a monthly journal for ND but once again am wondering about oil/gas production for T160 94W Sec 6 and the Points Well. Opened 1 year now, it appears production has been slashed greatly compared to being told it would go gangbusters.
Realizing weather and mechanical problems hamper movement and production, if anyone is out there aware of conflicts I'd appreciate a spot to go to as Continental is tight lipped.
Mr. Starkweather, the wells decline has been a steady progression, partly because there has not been a pump installed.
Your well is still producing a goodly amount of gas which is important for pushing oil to the wellbore, I would expect your well to do better except for........
Your well was a sand frack, 15 stages, they didn't spend as much on completion as they might have which means that the oil will have a harder time getting into the wellbore. Yours was not a 9 or 10 million dollar well, possibly 6/10ths of that. They went cheap on you with this well. Whether they drill better wells in the future is anybodies guess.
Believe it or not, for what they put into it, yours is a good well. The fact that there is the gas pressure there and the oil having a hard time making it to the wellbore leads me to believe that this well will produce for decades at a low rate. I think it may be that your acreage has been stockpiled with a low producing well to hold it for long term.
This is a good example of what I mean when I say that leasing has risks, the risk of a low producing well, the risk that the operator will not spend the money necessary [ceramic propant and or limited frack stages] to make it the best well it reasonably can be. The risk of being stockpiled with a one and done drilling program.
If leased, your appreciating asset has become their appreciating asset. Your well is going exactly according to the operators plan, to hold the acres as cheaply as possible.
The question now is how long before the operator installs a pump. the well being on 640 spacing at 1,142 barrels production in january would be equivalent to 2,284 barrels of oil for a 1280 and that is respectable production. The operator may not feel the need to place a pump on your well before production slows to 750 barrels a month which might take another year or two as the rate of decline slows with the age of the well.
Continental does drill these cookie cutter wells alot, quantity over quality.
If it makes you feel any better, I have 5 similar wells, one per 1280 spacing, pumps not installed for 4 years, with the difference that there are multiple wells drilled in surrounding spacings that produce twice as much oil twice as fast. Double the oil in only 2 years, not 4 years.
All we can do is watch.
On the bright side, when a pump is installed it will be much more efficient than on a 2 mile lateral and you get twice as much royalty per barrel than you would in a 1280 spacing. Imagine getting half as much as you receive now and be glad you aren't in a 1280.
I wish I had something better to tell you. You might pay for the $50 a year subscription and print off the entire wellfile, but I believe I gave you an accurate description of what is happening. If they show up tomorrow with a pump and next month with a rig to drill you an all out well with 20 frack stages and ceramic propant, I can't think of anyone who would be more happy to be wrong or happy for you other than your close family and friends. I just don't believe that will happen.
I have a lease in the East Flaxton Madison Unit, Burke County Anyone else have a lease or interest there? Anyone now have Enduro buying the lease from Magnum Hunter? Endure recently took over for us and we are two months behind on payments. Is this normal?
RW,
Caught up in trying to complete my taxes for 2013, I wasn't paying attention to comments made on this forum. Again, your input and reply, heartfelt in nature I believe, has always been significantly better than that offered by Continental no matter who I was in touch with.
Not subscribing to a journal or having the ability to decipher what it is that I really need to know, the description you have stated about the Points well in particular is well thought out and appreciated by this novice. It makes perfect sense then as I would have known to begin with...with Continental owning or having access to the lion's share of minerals, it is at their whim, not mine or siblings to produce or not produce whether now or 50 years from now. Going cheaply and not putting a pump guarantees they are in control and the mineral rights holder will be at bay.
On one hand it's a crying shame that novice mineral holders have to struggle so hard for an understanding. Landmen are salespeople and not really out for my or other holder's best interests.
In the meantime, 3 email notes to the landmen or tax advisers for assistance have resulted in nothing. If not for this forum and those supporting it, I'd be thoroughly in the dark. Again thanks for the great description. As it is, 40 years ago when my father talked about the luxury of maintaining the mineral rights in the advent oil and gas would be withdrawn, I never gave credence to any benefit. Something is better than nothing but boy, the game that is played along the way.
Knowing now that ND enacted legislation to ensure oil companies distribute 1099-misc with State tax withheld, I won't spend quite as much time on my taxes next year. For the first time in my life I am paying in a whopping amount. Some say they would rather have the benefits and struggle with the end result but not having to make estimated quarterly payments is an unheard of situation for me. How anyone else cope's is a true testament to stamina..ha!