My husband found out about 4 or 5 months ago that he has mineral rights in Williams county and it is stuck in probate and we are located in Indiana. We do not know much about the leases are needing to speak to a good trust worthy lawyer to answer some of our questions. We are also planning a trip to Williston in a few weeks. Does anyone have a good referral for a lawyer, that would prefably give us a free consultaion first, to know what we are looking at, then possibly hire to represent us. Any advice on probate, royalty, lawyers, Diamond Resources would be much appreciated. Thank you.
I am not able to help you with your question but there are several here that will provide you with some excellent input. I just wanted to tell you that finding a place to stay in Williston and that area is very difficult. Be sure to have something arranged prior to your trip (prior to you even getting tickets).
Also, you mention Diamond Resources - are they "knocking" on your door? Have they presented an offer? I would also suggest posting here as much information as you can; such as, where exactly are the mineral acres located, how many acres, and details of any offer you are receiving. Williston is big time boom town USA. Big money there in oil. Good luck.
Wilson
Thank you Wilson, It is a very complicated situation, since it is stuck in probate. We do know that there is 8 people in the probate and the acres are Township 157N, Range 98W. Secton 30: lots 3& 4 SE 1/4,SW 1/4. Also Section 31 Lots 1 NW 1/4, NW 1/4. There is 199 total acres. In the beginning when we first found out that this was going into probate, we recieved an offer from Diamond resources, and we were told that it was just a contract/lease for them to get permission to drill on the land, to see if there was anything there. The lease said that we would get $1000 bonus per acre, and that we only owned 1.34 acres. DR told us that it only said 1.34 acres, because it is still in probate, and undetermined how many people it would be divided between. Now we are being contacted by the original family, that set it in motion for probate, sating we need to help pay for the lawyer doing the probate. We were then told about the 8 people involved in the probate and DR told us that the well has been producing. The $ for the producing well is being kept in an account until the probate is completely finished. Upon hearing this, my husband and I have been doing research and have talked to a company owning the rights to an adjusent property and found that their well is one of the highest that they have and produces over 1,000 barrells a day. Their bonus per acre is $3600. He said that was 2 years ago, and would be considerably higher than that now, per acre. So after going back to first contract we see that we signed a lease for $1000 per acre, but this is the one that also states that we only have 1.34 acres, until probate is finished. We have contacted the layer involved int he probate and he really will not give us much information, the family member that is the contact person over the estate doesnt not seem to know much about the leasing and is willing to settle for whatever is offered. Like I said in my original post we are planning to bring our original documents, stating claim to the estate, plus the leases to the mineral rights from DR, and try to talk to a lawyer in Williston. We really need some direction. Are we locked into this lease, even tho it is not correct in acreage? We understand that each of us has the opportunity to negociate our percentage of the acres. We just do not want to make a mistake, if we havent already.
We are using Crowley Fleck law firm located in Williston to handle the probate for both mother and father. I cannot compare to any other law firms, but seems they are doing fine. Still in the process. Expect it to take quite a long time (6 months to a year) as there is a huge backlog in ND of similar cases due to the oil boom. You indicate that your husband has mineral rights that are "stuck in probate". Do you mean probate in Indiana...or North Dakota? Since the minerals are located in ND, the transfer of mineral rights ownership MUST be done in ND. If doing primary probate in Indiana, you'll need to have the attorney in Indiana work with ND attorney to do Ancillary Probate in ND. This is what we are doing with our mother's estate.
We have multiple tracts and have not used an attorney for anything other than handling probate. You can find most of the answers you need by doing your own research. This website is a good forum. You can get lots of info from the ND Oil & Gas Division website, and other websites. Also talking to the leasing and/or oil company representatives will give you some info. For an attorney, you need someone specifically knowledgeable about oil and gas in North Dakota. I think you will find that these attorney's are far and few between; booked solid, and/or already supporting the oil and leasing companies; won't have time to take on a small client; and it will cost an arm and a leg. Perhaps cost more than what your oil/gas are worth.
As for Diamond Resources....we recently signed a lease with them. Diamond is not an oil company...they are a broker. In our case, they are brokering for Continental Resources who is the oil company (operator). The lease is signed through Diamond, but the royalty checks will come from the operator.
Have you received a lease offer and/or Division Orders? Do you own rights in one tract or multiple? Mineral rights only or also surface rights?
Michelle,
James says you can learn it all on the forum and no need for an attorney and then asks you a bunch of technical questions you probably think might as well be in Greek.
You'll want an attorney. At stake is massive money. I have recently read of sign bonuses for leasing rights in North Dakota of $14,000/acre!!! 25% royalties is likely common place there. But what is critical are MANY components of the lease contract. It is very complicated and I have been researching this subject for years.
In addition, the O/G people will give you documents heavily weighted in their favor. It's is all legal, but you can end up on the short end of the deal. For example, you may have signed a deal with DR for $1,000 an acre?!!
What isn't clear to us, is what you have, how situated, where the producing well fits in etc.
But frankly, celebrate the opportunity and it appears you are going to be part of a OIL WELL that is currently producing!
I'll stop here because I don't have expertise especially in ND. You'll get some great advice, consider it all carefully and my opinion - use an attorney.
oh and remember what I said about how hard it is to find a place to stay there - boom town~!!
Wilson
James Brown said:
We are using Crowley Fleck law firm located in Williston to handle the probate for both mother and father. I cannot compare to any other law firms, but seems they are doing fine. Still in the process. Expect it to take quite a long time (6 months to a year) as there is a huge backlog in ND of similar cases due to the oil boom. You indicate that your husband has mineral rights that are "stuck in probate". Do you mean probate in Indiana...or North Dakota? Since the minerals are located in ND, the transfer of mineral rights ownership MUST be done in ND. If doing primary probate in Indiana, you'll need to have the attorney in Indiana work with ND attorney to do Ancillary Probate in ND. This is what we are doing with our mother's estate.
We have multiple tracts and have not used an attorney for anything other than handling probate. You can find most of the answers you need by doing your own research. This website is a good forum. You can get lots of info from the ND Oil & Gas Division website, and other websites. Also talking to the leasing and/or oil company representatives will give you some info. For an attorney, you need someone specifically knowledgeable about oil and gas in North Dakota. I think you will find that these attorney's are far and few between; booked solid, and/or already supporting the oil and leasing companies; won't have time to take on a small client; and it will cost an arm and a leg. Perhaps cost more than what your oil/gas are worth.
As for Diamond Resources....we recently signed a lease with them. Diamond is not an oil company...they are a broker. In our case, they are brokering for Continental Resources who is the oil company (operator). The lease is signed through Diamond, but the royalty checks will come from the operator.
Have you received a lease offer and/or Division Orders? Do you own rights in one tract or multiple? Mineral rights only or also surface rights?
The probate lawyer that we have over the estate is in ND. So we are good there, he just only wants to deal with the estate go-to person and that "cousin" isnt easy getting information from. So we have stated, we are not going to pay until we see some paper work. But my real questions are in the leasing of the mineral rights. We do not have surface rights. I do not know what you mean by tract, we only have rights to what I stated in my second post. I really would like someone who knows and understand ND leasing, to look at our contract and see if we are locked into it, or if since it is still in probate and the acreage is not correct, if we are still going to be able to nogotiate on the $1000 per acre, which we feel and were told was way too low, or if we are locked into it for 3 yrs. All of the adjoing properties have active and high producing wells. We did recieve an offer of purchase from another company for $3000 per acre, which we have no interest in selling.
Michelle, sad to say the mistake has probably already been made. There is probably a clause in the lease that says more or less so that you leased all you owned and at most you would be paid more of the $1,000 bonus per acre for all of the acres it turns out you own. I recommend that you not go to williston or hire a lawyer [both would be expensive] until the probate is complete. If different generations are involved the division of the 199 acres will be uneven. Have you considered that the 199 acres may be gross and not net to begin with? Many people did not hold 100% rights to their minerals because part of the minerals were reserved at the time the acres were bought. I believe that at one time the state reserved part of the minerals of homesteaded land. As to paying for part of the probate, I would as long as I were co -representative and had acess to all information. If the present personal representative is not keeping up with the details, at least you would be able to as co representative. You have a pretty good well but you won't net as much as you may think, you do not get commodity price for oil, the state takes 11.5% production and severance and possiby as much as 4% income tax, then there is federal tax, your home state tax if applicable, any deductions that the operator is allowed to subtract from your royalty for conditioning and transport of production to make it sellable. If you use one of the online royalty calculators I wouldn't expect to keep more than 60% of the number it came up with. I don't want to be the voice of gloom but you need to learn exactly what is at stake before you plan trips and hire lawyers because you could spend more than you ever would realize from your minerals. Bright side, your well the Mathewson 1-30H, operated by Continental Resources has produced 46,113 bbl oil as of August, 2,467 in 8 days production in August. Not bad for 6 months production but not a monster well. I hope you learn as much as you can without spending a great deal of money before you decide to spend alot of money. Good luck.
Michelle,
There is a well in Sections 30-31 T157, R98W operated by Continental Resources. It was begun in 1/12. If you have a valid lease, and I note that Continental has recorded some leases in the unit with royalty of 20%, there is nothing you can do about the lease at this point. A deal is a deal. I don't know how good the well is but since it is a producer, your husband may get some revenue if the Division Order Title Opinion shows an interest in his name. Correspondingly, it is a good thing that the will probate is underway. He would most likely had to have one done sooner or later. The probate will likely determine his net mineral acreage amount and that will determine his share of the well proceeds pursuant to the Division Order Title Opinion regardless of what the lease says.
I recommend that you just relax and share in the probate cost then when it is completed, numbers can be run that will determine your husband's potential income. The good news is that whatever he has through probate can't be taken away as long as he is truly in the legal chain of mineral title. However, I would also refrain from selling anything until you know exactly what your share is to be. A buyer is bound to know a lot more about things than you know.
Feel free to contact me through MRF once you get a probate document or Division Order. I will gladly let you know your options at that point.
Michelle - I concur with the input from Mr. Hutchinson and Mr. Kennedy. a) As both gentlemen stated, there is nothing you can do at this point about the lease...it is what it is. b) Don't set to high of expectations. It is likely that after all the dust settles, with probate and title search of the county records, your share will not be as great as you might think. Although the 1.34 net mineral acres (nma) quoted by Diamond Resources may not be exact, I have no doubt that it was based on a title search of county records and won't be that far off the mark. If the nma is in the ballpark, once the dust settles, the royalty checks will be nice...but nothing to retire on...and probably not worth the expense of hiring an attorney or making special trip to Williston. d) I have worked with both Diamond and Continental and have found them to be trustworthy...though difficult to contact at times (due to being overloaded). It is likely that since the lease agreement is done, your future dealings will be direct with Continental (they will send the royalty checks and issue Division Orders).
Finally, I reiterate Gary's suggestion to relax and share in the probate cost...and be patient. Once the probate is done, you will be paid retroactively for all royalties generated from the time well production began.
James,
You say "d) I have worked with both Diamond and Continental and have found them to be trustworthy..."
Yet DR got them to sign a lease they didn't have any idea what they were signing and apparently it was for $1,000 an acre when that appears not close to the "going rate". What is trustworthy about that?
Also, why not suggest that they have that "lease" reviewed by an attorney to see what they just signed up for? You guys that have this stuff down, seem to think everyone else can figure it out - well this is another example of someone not working with an attorney and getting a very trustworthy deal at $1,000 an acre.
Perhaps nothing else for them to do until probate settles, but if it was me I would be looking into it a bit deeper to understand what the potential was. if they have a well and if they have now leased whatever minerals were remaining, etc, then their might not be much more they can do, but how do they go about determining if there is or isn't?
hmmm....
Wilson
James Brown said:
Michelle - I concur with the input from Mr. Hutchinson and Mr. Kennedy. a) As both gentlemen stated, there is nothing you can do at this point about the lease...it is what it is. b) Don't set to high of expectations. It is likely that after all the dust settles, with probate and title search of the county records, your share will not be as great as you might think. Although the 1.34 net mineral acres (nma) quoted by Diamond Resources may not be exact, I have no doubt that it was based on a title search of county records and won't be that far off the mark. If the nma is in the ballpark, once the dust settles, the royalty checks will be nice...but nothing to retire on...and probably not worth the expense of hiring an attorney or making special trip to Williston. d) I have worked with both Diamond and Continental and have found them to be trustworthy...though difficult to contact at times (due to being overloaded). It is likely that since the lease agreement is done, your future dealings will be direct with Continental (they will send the royalty checks and issue Division Orders).
Finally, I reiterate Gary's suggestion to relax and share in the probate cost...and be patient. Once the probate is done, you will be paid retroactively for all royalties generated from the time well production began.
Wilson,
Trustworthy or not, it's not the job of the oil company to notify you of the going rate for leases in the area. If the mineral owner doesn't do his/her homework before signing random paperwork sent their way, then it is nobody's fault but their own. It's always an easy scapegoat to blame the oil company.
As for Michelle's situation, I'd have to agree with the others. I took a quick look at NDRIN and found one lease from a gentlemen in Indiana under the descriptions she provided. It would appear as if Michelle is confusing the difference between gross and net acreages, and that her husband is indeed locked into the lease he agreed to.
But gene,
That is precisely my point, they aren't trustworthy. Thus it is necessary for a mineral owner to do as you have stated "do their homework". But people like you and I that have experience and awareness of this need, HAVE, to continue to try to warn people of that need; that they must not trust the O/G/Landman etc - and it is necessary to research, get educated, talk to neighbors, consult an attorney etc. It is a shame it is that way, but it is. In this case, the OP (original poster) believed what the landman said and signed an unfair lease. Yes, untrustworthy fits.
oh and how dare you blame the OP for getting taken advantage of by a landman. tsk tsk tsk...
Wilson
Gene O. said:
Wilson,
Trustworthy or not, it's not the job of the oil company to notify you of the going rate for leases in the area. If the mineral owner doesn't do his/her homework before signing random paperwork sent their way, then it is nobody's fault but their own. It's always an easy scapegoat to blame the oil company.
As for Michelle's situation, I'd have to agree with the others. I took a quick look at NDRIN and found one lease from a gentlemen in Indiana under the descriptions she provided. It would appear as if Michelle is confusing the difference between gross and net acreages, and that her husband is indeed locked into the lease he agreed to.
Further to the comment from Gene: when I use the term "trustworthy"...it isn't to imply that the oil company will give you the highest offer out of the chute. They are companies out to make a profit and won't give you their top dollar with the first offer. Before I became engaged, my mother-in-law and other family members routinely signed the first offers without question or negotiation. I suspect many if not most of the mineral rights owners do likewise (as it sounds like Michelle's husband did). That doesn't make DR or any other oil companies untrustworthy...just means that prior to signing ANY contract, you should first do some research and make a counter-offer if the first offer is not to your liking. Earlier this year I was sent an offer from Diamond, also for $1,000. I submitted a counter-offer on the bonus, royalty and other contract terms...and without any kind of fight, Diamond came back with a revised, better offer on all counts. Just had to ask. So when I say "trustworthy"...I'm really suggesting that I believe DR and Continental to be honest and not fly by night shylocks.
Our family has multiple lease contracts with Continental/ (Diamond Resources), Murex, Whiting, XTO, Hess (Empire Oil) and Dale. They all use a pretty standard boiler plate lease agreement. The lease agreement that I signed with DR is probably nearly identical to what Michelle was offered. It is a typical agreement with a lot of legaleze...but risk to you is actually pretty small. Our family is living with boilerplate lease agreements signed years ago by earlier family members. Other than the (unfortunate) fact that the royalty % and bonus check weren't as good as they could have been, none of the other terms have had any negative impact.
One thing about all of the lease agreements that I've seen....the lease remains in effect after the oil company begins revenue production and as long as they continue to produce (there is more to it than that in the fine details...but is the essence). Since Continental has already started producing on the land, the 3 year lease term becomes moot. The lease remains in effect until, and if, Continental ceases all operation on the land. There will be no new lease agreement in 3 years and no new bonus monies. You are also "stuck" with whatever royalty figure that was agreed.
Michelle - In short, I wouldn't be overly concerned with the terms. Yes, you probably could have gotten a bit better bonus and perhaps royalty (if you got 20% or better...feel good). Unless the cousin knows and willing to divulge the net mineral acres that the deceased relative had, it is really difficult to determine the potential from your mineral rights...i.e., you have to wait for probate in order to even investigate potential.
That was a good response James; thorough and thought out. Thanks.
I agree with you that "trustworthy" is not being used to suggest Continental is a "fly-by-night" scammer. Now I can't say about DR, I have heard some negative things about them - but I don't know. Trustworthy in this discussion is being applied to the leasing tactic.
Trustworthy does apply (not in a fraudulent way), but when they present the boiler plate lease and imply "this is a good deal", "this is what everyone is getting", "this is all I can do", "just sign it so we can begin drilling" and etc. this is what is not trustworthy.
As you have learned, but family/generations before you didn't, was that you should not believe and sign what you are initially given by any O/G landman. It is imperative that we warn mineral owners to be careful, thorough and seek help from experienced experts. As a minimum, that means finding sites like this and at a maximum using an expert attorney. I also always strongly suggest speaking with neighbors and joining them in negotiations.
I just want to see guys like you and gene working hard to educate the mineral owners that they can do better. Not only in the terms but in the protection in the lease terms. You have been fortunate; 1. that you have expeience with so many different companies and 2. that you know now to do your due dilegence and 3. that you haven't had to rely on any of the "protections" of a lease (or excluded!). However, we know that a good lease will include these protections as a matter of course.
Anyway, thanks for your input and helping mineral owners here. I appreciate it.
Wilson
James Brown said:
Further to the comment from Gene: when I use the term "trustworthy"...it isn't to imply that the oil company will give you the highest offer out of the chute. They are companies out to make a profit and won't give you their top dollar with the first offer. Before I became engaged, my mother-in-law and other family members routinely signed the first offers without question or negotiation. I suspect many if not most of the mineral rights owners do likewise (as it sounds like Michelle's husband did). That doesn't make DR or any other oil companies untrustworthy...just means that prior to signing ANY contract, you should first do some research and make a counter-offer if the first offer is not to your liking. Earlier this year I was sent an offer from Diamond, also for $1,000. I submitted a counter-offer on the bonus, royalty and other contract terms...and without any kind of fight, Diamond came back with a revised, better offer on all counts. Just had to ask. So when I say "trustworthy"...I'm really suggesting that I believe DR and Continental to be honest and not fly by night shylocks.
Our family has multiple lease contracts with Continental/ (Diamond Resources), Murex, Whiting, XTO, Hess (Empire Oil) and Dale. They all use a pretty standard boiler plate lease agreement. The lease agreement that I signed with DR is probably nearly identical to what Michelle was offered. It is a typical agreement with a lot of legaleze...but risk to you is actually pretty small. Our family is living with boilerplate lease agreements signed years ago by earlier family members. Other than the (unfortunate) fact that the royalty % and bonus check weren't as good as they could have been, none of the other terms have had any negative impact.
One thing about all of the lease agreements that I've seen....the lease remains in effect after the oil company begins revenue production and as long as they continue to produce (there is more to it than that in the fine details...but is the essence). Since Continental has already started producing on the land, the 3 year lease term becomes moot. The lease remains in effect until, and if, Continental ceases all operation on the land. There will be no new lease agreement in 3 years and no new bonus monies. You are also "stuck" with whatever royalty figure that was agreed.
Michelle - In short, I wouldn't be overly concerned with the terms. Yes, you probably could have gotten a bit better bonus and perhaps royalty (if you got 20% or better...feel good). Unless the cousin knows and willing to divulge the net mineral acres that the deceased relative had, it is really difficult to determine the potential from your mineral rights...i.e., you have to wait for probate in order to even investigate potential.
Hi, my little brother is turning 18 in 6 months, he is heir to 1/5th of 880 acres in the bakken area, there is 1 well producing and 4 others named but not drilled yet I guess, he wants to know how to find out about his share of everything, probate was over 3 years ago and he is just waiting, but should we just sit back and wait for some kind of letter when he turns 18 or should we also get a lawyer?
Gary L. Hutchinson said:
Michelle,
There is a well in Sections 30-31 T157, R98W operated by Continental Resources. It was begun in 1/12. If you have a valid lease, and I note that Continental has recorded some leases in the unit with royalty of 20%, there is nothing you can do about the lease at this point. A deal is a deal. I don't know how good the well is but since it is a producer, your husband may get some revenue if the Division Order Title Opinion shows an interest in his name. Correspondingly, it is a good thing that the will probate is underway. He would most likely had to have one done sooner or later. The probate will likely determine his net mineral acreage amount and that will determine his share of the well proceeds pursuant to the Division Order Title Opinion regardless of what the lease says.
I recommend that you just relax and share in the probate cost then when it is completed, numbers can be run that will determine your husband's potential income. The good news is that whatever he has through probate can't be taken away as long as he is truly in the legal chain of mineral title. However, I would also refrain from selling anything until you know exactly what your share is to be. A buyer is bound to know a lot more about things than you know.
Feel free to contact me through MRF once you get a probate document or Division Order. I will gladly let you know your options at that point.
Gary L Hutchinson
Minerals Management
Daniel - If you provide the specific section number (Township/Range/Section) and name of your brother, I can do a little checking in the NDRIN website to see what documents were recorded in his name as well as check the ND Oil & Gas website to get more info on the well(s) and operator. You probably won't need a lawyer if all appropriate documents were recorded with the county. More than likely will just need to contact the appropriate oil company and, if necessary, provide them with copies of the recorded documents.
Jim
t151n-r94wsec.32 and t149n-r93 sec.29 and its Joel Hosie J.r.
As for wells: 151-94-32 is in 1280 acre spacing unit along with 151-94-29. There is a well physically located in 151-94-29 called Delores Sand. It began production in April this year. It has legs that go into 151-94-32...so royalties would be generated from this well for your brother. The operator of this well is WPX Energy.
In section 149-93-29, there are 4 Confidential wells called Morgan, Arabian, Mustang, and Pinto. Being confidential, it means that information about the well is still unavailable, and is not yet completed or in production. When it might be is anyone's guess. Enerplus Resources is the operator for these wells.
I am unfamiliar with either of these oil companies. If you do a web search, you should be able to come up with contact information for both.
I found nothing in the county records under your brother's last name. In fact, not a whole lot at all in the records for these two properties. Any other names (like the person for whom probate was done) that I might search?
Joel hosie s.r. was our dds name, s.r did get a bonus of $100,000.00 as did his siblings it may be under the name tina waters, our dads mothers name, guess I dont know what to say, but we do have all sorts of paperwork from joel s.r. before he died, we used to be leased with peak energy of north dakota but have been traded to others. Guess we should call WPX Energy...any idea of how much oil has been produced from delores-sand? Thank you very much.
or ambrose hosie, tena waters hosie
Daniel Stclaire said:
Joel hosie s.r. was our dds name, s.r did get a bonus of $100,000.00 as did his siblings it may be under the name tina waters, our dads mothers name, guess I dont know what to say, but we do have all sorts of paperwork from joel s.r. before he died, we used to be leased with peak energy of north dakota but have been traded to others. Guess we should call WPX Energy...any idea of how much oil has been produced from delores-sand? Thank you very much.