Hello… We have a new lease from Lone Tree/Petro Harvester for our mineral acre’s in Burke Cty 161N township. Just wondering what type of clauses or anything new that we should have on the lease to make sure we are covering our rights. I have all the royalties, per acre, length all settled. I sent our lease off to a lawyer we’ve used before but it’s doing on almost 2 months that she hasn’t got at it or gotten back to me even though I’ve called and emailed. Is there somewhere that I can check what is needed nowadays for a lease? Continual drilling if started, etc. Thanks in advance! Beth
Curious what the terms you negotiated and bonus? I had a lease with Petro but let it expire. Who is lonetree?
Many of us will negotiate based upon the draft lease from the company. They are rarely in the mineral owner’s favor. I want a depth clause limited to zones that are producing, not penetrated, limit on shut in time, no free use of water, oil or gas, Pugh clause, limit the warranty clause , no option to renew, no top lease clause-just to mention a few. I would prefer a no post production clause, but that is very difficult to get in North Dakota. If I cannot get it, then I want a higher royalty to compensate.
Thank you so much for that info M. Barnes. My family is now looking into the post production clause and am not glad but interested in hearing it is difficult to get in ND.
Our lawyer whom is very fluent in doing mineral leases from Powers Lake stated: “There is no provision in the lease for the costs associated with the drilling. So the oil company would deduct expenses from the royalty payments. I could inquire whether they would be agreeable to do the payments “at the mouth of the well” which means that transportation costs would not be included.”
I’m not sure if “at the mouth of the well” is something we want too. Is this really something we should pursue from your perspective? We’ve got the Pugh Clause, limited the warranty clause, no option to renew, no top lease clause and a 20% royalty right now. But you said this no post production clause is difficult to get in ND?
We feel that Petro Harvester/Rockall will be drilling within the year, our surface owner of the land has already signed a lease for it.
Any info or insight is greatly welcomed!! Beth
I am not an attorney, so cannot give legal advice. ND law will prevail. Generally, the operator and working interest owners bear all the costs of drilling. Post production costs are the costs associated with getting the product to market. Some states like Texas and North Dakota generally allow the operators to charge mineral owners those costs unless you negotiate them out of it in the lease. In states like Oklahoma which is “an implied covenant to market state”, the operators are generally not allowed to charge post production charges unless they put it in the lease-so opposite. The words “at the mouth of the well” are critical to Texas and ND leases. Your attorney should know how to word the lease correctly.
Thank you so much for all the clarity on this matter. We do have the “at the mouth of the well” wording in our lease. Your knowledge has helped me with another relative that wants to keep pursuing post production costs. We have a lawyer out of Powers Lake that has done other leases for us, and we feel she has included everything we need for now, at least I feel that way. You helped a lot! Thanks!! Beth
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