Server Time (CDT): Mar. 29, 6:41:01a

OG-12-01183

Williams County, ND
North Dakota Oil and Gas Lease Sale

SOLD

Property Schedule

Due Diligence Began 7/18/2012
Bidding Started 8/9/2012
Bidding Ended 8/16/2012 2:30 PM

Registration Status:

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Your Bid Status:

You have not bid on this lot

Tract:

OG-12-01183

Gross Acres:

80.00

Net Acres:

80.00

Time Remaining:

Auction has ended

Start Time:

8/9/2012 2:30 PM CDT

End Time:

8/16/2012 2:30 PM CDT

Your Bid:

-

Highest Bid:

$7,003/acre

Starting Bid:

$1/acre

Bid Increment:

$1

Total Cost at Highest Bid:

$571,534.80
(Bonus + Agency Fees + Advanced Rental + 2% Buyer Premium)

Legal Description:

Tract Details

Lease No.

OG-12-01183

County, State

Williams, ND

Gross Acres

80.00

Net Acres

80.00

Lease Term

1 Years (Paid Up)

Rental/Acre (Per Year)

$1.00

Rental Due At Closing

$80.00

ND Administrative Fee

$10.00

Buyer Premium

2.00%

Additional Information

Update: An AFE for the P Jorgenson 154-98-5-14-23-16H well has been received by the State of North Dakota from Kodiak Oil & Gas Corp. Please click the following link to view the AFE.

AFE: P Jorgenson 154-98-5-14-23-16H; NDIC #: 21817

Update: Operator Statement Regarding AFE

Notice: This lease is contained within the unit of a recently spud (6-27-12) well. The acreage is included in a 1280 acre spacing unit consisting of Sections 14 and 23 of T154N-R98W. The WI for the successful bidder is 6.25%. The lease offered will be at a 3/16 royalty rate. The Division of Interests and Approvals shown on the AFE reflect WI ownership prior to lease expiration. Successful bidder will have option to participate in the AFE at 6.25% or decline to join the AFE and be subject to the risk penalty described below. The risk penalty will not apply if the successful bidder joins the AFE.

Well Information:
P Jorgenson 154-98-5-14-23-16H
Sections 14 & 23 - T154N - R98W
Williams County, ND
NDIC File No. 21817 API No. 33-105-02435-00-00
Location: SWNW 14-154-98 Footages: 1788 FNL 285 FWL Latitude: 48.163857 Longitude: -103.258131

Operated by Kodiak Oil & Gas Corp.
Spacing order: 13704
Formation: Middle-Bakken
Field Name: Truax
Spud on 6-27-12

State's Interest: 154-98-14: E2NE4 (80 ac.) 100%

Lease Term5 years
Rental Rate$1.00/acre/year
Rental Due at Closing1 year
Gross Acres80.000
Net Acres80.000
N.D. Admin Fee$10.00
Buyer Premium2% of bonus bid

Property Information Update

North Dakota Drilling Non-Consent Provisions

Persons interested in bidding on Tract OG-12-01183 should become familiar with "risk penalty" provisions found in Section 38-08-08 of the North Dakota Century Code (NDCC) and Section 43-02-03-16.3 of the North Dakota Administrative Code (NDAC).

Provided certain conditions are satisfied, NDCC 38-08-08 allows the owner to impose a penalty on other interests in the well's spacing unit if those other interests decline to join in the risks and costs of drilling.

The North Dakota Industrial Commission oversees application of the risk penalty law and has adopted a rule to implement it. The rule is found in Section 43-02-03-16.3 of the NDAC.

NDCC 38-08-08 states that if the nonparticipating owner's interest is not subject to a lease, the risk penalty is 50%, and that if the nonparticipating owner's interest is derived from a lease, the risk penalty is 200%. These risk penalty percentages are applied to the nonparticipating owner's share of the reasonable actual costs of drilling and completing the well, and may be recovered only out of production from the pooled spacing unit.

In order to enforce a risk penalty, the owner, must make an unsuccessful, good faith attempt to have the unleased owner execute a lease - or - must make an unsuccessful, good faith attempt to have the leased owner join in and participate in the risk and cost of drilling. "Good faith attempt" is more fully described in NDAC 43-02-03-16.3.

As it pertains to Tract OG-12-01183, the Commissioner of University & School Lands, cannot warrant which risk penalty will be assessed for non-participation.

The procedures and process outlined in NDCC 38-08-08 and NDAC 43-02-03-16.3 should be referenced and followed. Risk penalty disputes are decided by the North Dakota Industrial Commission. A dispute whether a risk penalty attaches to Tract OG-12-01183 and its interests, and if so the amount of the risk penalty, would be addressed at a hearing held by the Industrial Commission.

Important Notices Pertaining to North Dakota Department of Trust Land Lease Auctions

  1. The tracts available for lease are sold on an as is basis, with no representations or warranties regarding the quality of title, ownership, or the accuracy and completeness of the information provided by the State;
  2. The tracts available for lease are subject to the restrictions found in North Dakota Century Code (NDCC) Chapter 15-05, Leasing Coal, Oil, Gas, and Other Rights (www.legis.nd.gov/cencode/t15c05.pdf) and Administrative Rule Chapter 85-06-09 (www.land.nd.gov). Sample lease forms are available at www.land.nd.gov.
  3. The burden of due diligence is the bidder's responsibility prior to any auction;
  4. The lease execution date of all State leases is the effective date of auction as designated in the transactional documents; and
  5. The successful bidder must make payment by wire transfer or automated clearing house (ACH) for all bonus, rental, and bidder's premium owed to the State within 7 days. The State will accept payment from only one bidder per tract; however, a bidder may make multiple payments in one wire or ACH, provided the bidder indicates which tracts are involved in the payment.
Notice: A 2% Buyer Premium, calculated as 2% of the bonus bid amount, will be added to the cost of this lease.
Contact Information
North Dakota
Drew A. Combs
Director of Minerals Management
1707 N. 9th St. - PO Box 5523
Bismarck, ND 58501
(701) 328-2800
EnergyNet
John S. Munroe
V.P. Engineering / State and Federal Leasing
440 Louisiana, Suite 600
Houston, TX 77002
(832) 403-3122

Bid History (Top 10)

Bidder

Placed

Amount

Bidder #8

8/16/2012 1:53:03 PM

$7,003

Bidder #17

8/16/2012 2:24:02 PM

$7,002

Bidder #8

8/16/2012 1:53:03 PM

$6,751

Bidder #17

8/16/2012 2:23:23 PM

$6,750

Bidder #8

8/16/2012 1:53:03 PM

$6,501

Bidder #17

8/16/2012 2:22:36 PM

$6,500

Bidder #8

8/16/2012 1:53:03 PM

$6,251

Bidder #20

8/16/2012 2:08:13 PM

$6,250

Bidder #8

8/16/2012 1:53:03 PM

$5,605

Bidder #20

8/16/2012 2:07:39 PM

$5,604


View 85 earlier bids...