Hello,
If any one knows.....Im looking to find out if there is a chance there could be additional wells drilled on the property listed below and if we could renegotiate the lease. Our lease is a "paid up" lease, 5 years and expires Sept 2013. We were originally given $175/acre in 2008 What is the current going rate per acre for the area and what is the spacing for this section ie # of wells. There is currently one well in production.
- State - ND
- County - Williams
- Name of the operator of the well - Hess
- Well Name Go-Johnson 15-22H
- Location - TS 157N R97W Sec. 22
- Total Acres in the unit or pool - 160
- Number of acres owned in the unit or pool - 160
Thank you for your help
Lisa, you already have a well so your lease is almost certainly held by production (HBP) and in it's secondary term "and as long thereafter as oil or gas are produced", in which case there will be no more negotiations and no more bonuses. You are in a 1280 acre spacing composed of your section 22 and section 15 just north of you.
The last month I can see production for is April 2,205 bbl oil, total cumulative production of 92,576 bbl oil. Water that must be gotten rid of 72,900, which I don't consider too bad. Every last bit of gas, 150,875 mcf (mcf =1,000 cubic feet) shows to be flared, burned off which since I believe the value of the usually rich ND gas would make that equivalent to about $750,000 up in smoke. For 19 months production the well is not a disaster but there are probably alot of other spacings higher on the list that Hess would prefer to drill infil wells in. I believe that you will have another well drilled but I would not hazard a guess as to when that would be. I hope this helps, I believe where you are at now there is nothing to be done but check the mailbox and cash the checks and pay your taxes.
Thank you Mr. Kennedy.
I can see we are now, for the last 3 months being paid for gas as well as oil. The pay out is anywhere from 10-20% of the oil payout. Do you know if the gas royalties is something that could also continue or increase with time. Also I was wondering if there is a site you can share that you are pulling your numbers from. They are very close to mine but not exact.
Thank you again for your timely response.
Lisa
Lisa, I have a basic subscription to the NDIC Oil and Gas Division, it costs $50 a year. The numbers I gave you were for what was produced, I recall that the operator sold more oil than was produced in April, which means it was leftover from previous months, your checks would be based on sales and not production. The operator may not be reporting the sale of gas to the state yet. I would suggest that you call the NDIC O&G Division about this, reporting to the state encourages an accurate accounting. The amount of gas being sold could increase (because with no reporting to the state I don't know if they sold all they produced), stay the same or decrease, the operator could go back to flaring gas for lack of a market, just no way to call it. I hope this helps.
Mr. Kennedy and I know of a lease for over $19,000/acre, but where that posting is remains to be found.
There are seemingly no dry holes in the Bakken formation, so it should be a leasor's market.
ND Land Trust - Lease Rates
I see current land lease rates obtained by the land trust of ND in the same township for $5K-9K. Could this be the going rate or am i reading this incorrectly? TS 157N R97W
Its low in comparison to that posting awhile back!
Lisa, what they are willing to pay the state at auction and what they are willing to pay you are two different things. If you can get more than one party wanting your lease the numbers you could negotiate can be much higher, probably half of what the state gets. Lisa, the area your minerals are in do not seem wildly productive but they are still profitable to good. Rough guess, they should offer around $1500 per acre and 20%, and will probably actually offer $1,000 and 3/16.
As I recollect, that high priced lease was after a producing well was in production, so the producer wanted to lock things up tight in some location under water.The posting is here someplace.
Larry, that other area was a fantastic area. If all those state leases were 20% instead of .1667 I think the prices would be lower yet. The NDIC Director thinks almost all the prime areas are leased and drilled or nearly and the production phase has begun in earnest, or that's what I gathered from the presentation anyway.
Larry Wagenman said:
Its low in comparison to that posting awhile back!
Robert,
That makes sense.The posting is here someplace.
Did you travel to ND yet to get a handle on things ?
No Larry, my inconsiderate brother tried to die on me with more blood clots in his lungs than the doctor could count and I had to stick around and remind him that he can't escape that easily. He is alot better now. I'm just waiting for some papers in the mail before I set out. My other brother Tom is going to follow me by about a month, maybe we can double team them.
I suppose I should tell people that I'm joking about my brother being inconsiderate. He is very dear to me. You never know how people will take it when you are kidding.