I recently had a lease in Divide County lapse. The company had an option for another 2 year lease but did not exercise it. After it expired, the same company contacted me with an offer to lease my minerals for one year at a lower royalty rate (16% - prior lease was 18%) The landman said I better take it or I would be forced into a lease later and it will be the same terms but for 5 years. Landman said the company WILL NOT negotiate. Take it or leave it. I have leased this land (80 acres of minerals) several times and have never had such a “hardball” offer. What are my options?
It sounds like he is referring to your minerals being force pooled if you don’t lease with them. Generally, being force pooled is not ideal, but North Dakota’s force pooling statutes are more mineral owner friendly than other states. You could certainly refuse to lease and continue to negotiate or seek out another lessee. I, too, would be concerned about the royalty rate.
Do you know who they are leasing for? What lands are involved? I ask because there is not much current drilling activity in Divide County and someone would only take a lease for one year if they knew drilling was imminent. If that is the case, there will certainly be others who would lease your minerals.
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If you share the section, township and range, or at least the township and range, we can look up nearby activity. Sounds like he is offering the minimum royalty of 1/6th. 16.6667%?
Thanks for the comments maxroyalty. They were helpful and pretty much align with my thoughts. Yes, he was referencing forced pooling. I do not know if North Dakota requires a certain percentage of a spacing unit (I believe ours is 1280 ac.) to be leased before they can force pool a mineral owner. I am in no hurry to sign a lease and there are a couple other companies leasing in the area so I’ll take my time. Thanks again!
Hello M_Barnes. Thanks for responding to my question. Unfortunately, I am not being offered 1/6th. I am being offered 16% royalty. Land is in 160-102. A question I have is, “In North Dakota, is there a certain number of acres (percentage) in a spacing unit that need to be leased before companies can force pool other mineral owners?” I think I understand to some degree pooling, but I DO NOT know how “forced pooling” works. Thanks.
Hi PJames
my family has minerals in Divide County also - can you let me know what companies are currently leasing? Our last lease was with Hunt but no longer leased. Thanks in advance for the info
Here are some FAQ about pooling in ND.
16% may be the minimum royalty in ND. It has been a while since I did a lease there.
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The leasing companies will vary by location. If they want to lease, they will find you. What township are you in and I can look to see if there are any recent leases.
I would suggest getting NORTH DAKOTA OIL & GAS LEASING CONSIDERATIONS it will explain some things.
Oil and Gas FAQs, Web Help and Demos also has all sorts of things.
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Which section(s)? There are only eight sections in that township that aren’t held by an existing well.
To sum up your options, if you lease you get the lease bonus plus the negotiated royalty rate on all production from the wells. If you get force pooled, you get either the higher of the weighted average of the other lease royalty rates in the unit or 16% PLUS once the operator recoups its cost of drilling plus 50%, you get the 84% going forward. If the well is a boomer, getting force pooled can result in more production in the end. On the other hand, if you lease you get the lease bonus and the well might not ever pay out. I own some minerals in this same township as well and I can tell you it is not top tier acreage so that decision is tough.
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Great info. - thanks. I have minerals in Sections 2, 10, & 11. Section 10 is the only one they are interested.
north dakota also has a very active noth west landowner’s association. you may want to also contact them with your questions.
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2-Active leasing by KODA Resources Operating in 2019 10-Ditto, 11-Ditto
No new drilling or leases filed since then.
Does anyone know if there is leasing going on around Beach?
Thank you!
Give Section township and range please.
Hi,
Range 140N, 105W
Hit too fast
Section 7 in Township 140N, Range 105W
Thank you
I only see one well in sec 31 drilled back in 1998. No leasing or permits since then. Last leasing was in 6, 16, and 21 back in 2018.
North Dakota is a state where you have to claim your dormant minerals every 20 years or they can be reclaimed by the surface owner.
Hi,
Thank you for the info.
I claimed these rights about 10 years ago, leased them for 5 years, but now interest has just evaporated.
Is it just a drilled out/dead area now?
Thank you
More of a “not drilled” area. No permits since 1998.