I’ m new to the forum so bear with me please. My brother usually handled all of this oil leasing business & knew his way around the " oil field" as he drilled all over the world. He is no longer with us so it is up to me to try & get the deal I can for my sister & myself. We have a small parcel of mineral rights in McKenzie County: T146 N, R98 W, 5th P.M., Section4: Lots 1,2, S2 NE, SE. In reading some of the information that Mr.Kennedy has to say about leasing vs carrying I think I am way over my head in this. I may have to fly up to Williston to speak with an attorney who specializes in this type of thing. Any advice would be helpful. My sister & I are retired & live on a fixed income so I can’t afford too many mistakes. Thanks, MK LaPointe.
Ms. Laponte, you gave enough information with the legal description for me to look at all the producing wells surrounding you. 1) 75,000 barrels in 2.5 years, 2) 57,772 barrels in 2 years (aprox), 3) 20,724 barrels in 6 months, these three wells have pumps on them according to the NDIC, 4) 39,O86 barrels in about two years for a well with no pump. This area is not producing a fantastic amount of oil. I think you would be ahead in leasing for about 10 years and after that I would rather not be leased. For the short to mid term, leasing would be the obvious winner. The other side of the coin is best described when I informed my brother that our worst well could be 10 years before we started receiving 100%, he told me, "Bob, I don't see myself not needing money in 10 years". I know what it is to live on a budget, I was never rich and I live off about 1/4 of my oil royalties because I am suing an oil company and my royalty's from 5 wells that have been producing up to 5 years are in suspense. I used to spend more on tools and transportation than I live on now. I'm 47 but in my family, the men generally don't live long past 60. I think I will live long enough to get it all worked out and leave something for the next generation. I am only here so people can make an informed decision. My advice to you is if you need the cash up front money, lease because I think it will take 10 years or close to it before being non-consent would pay off for you and if you don't have a large enough interest to hire someone to handle it for you at that time, it probably wouldn't be worth your time to be a working interest, although I think that with enough time that anyone could learn to handle their interests if they wanted to. I just have one piece of advice to add to this, if you lease, make sure you get paid. Do not give them the executed lease without having cash in the bank from an honored/paid draft or at least a company check in hand. If you go for the up front money, make sure you get the up front money. If you are on a fixed income you can't afford to sue oil companies to get your bonus. I say this because I and my brother started out leasing and we are zero for 3 when it comes to getting paid for leases and why I am suing an oil company now. Not getting paid is a fairly common problem, a search of the term cold draft should turn up a great deal of information. In your situation, there is no right or wrong decision, pick the one that best suits your needs. Good luck with your decision.
Ms. LaPointe,
It a ppears that you executed an Oil and Gas Lease in favor of Marathon Oil Company which expires 07-07-2013. Continental Resources, Inc. has filed a permit on said 1280 acre unit (Sections 04 & 09-T146N-R98W). Said well named the Chandler #1-9H within the Ranch Creek Field. It is possible, with 5 other permits filed by Continental in the area, that your unit will be drilled within the primary term. Based on the current production in the area, production of oil is low relative to other areas. To your optimism, most of the control points (Wells) viewed were drilled in 2010 or earlier and completion techniques have greatly improved.