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Tract:
OG-13-00307, OG-13-00308
Gross Acres:
174.07
Net Acres:
174.07
Time Remaining:
Auction has ended
Start Time:
3/14/2013 3:00 PM CDT
End Time:
3/21/2013 3:00 PM CDT
Your Bid:
-
Highest Bid:
$2,760/acre
Starting Bid:
$50/acre
Bid Increment:
$10
Total Cost at Highest Bid:
$490,225.93
(Bonus + Agency Fees + Advanced Rental + 2% Buyer Premium)
Legal Description:
Tract Details
Lease No.
OG-13-00307, OG-13-00308
County, State
McKenzie, ND
Gross Acres
174.07
Net Acres
174.07
Royalty Rate
3/16
Lease Term
1 Years (Paid Up)
Rental/Acre (Per Year)
$1.00
Rental Due At Closing
$174.07
ND Administrative Fee
$10.00
Buyer Premium
2.00%
Additional Information
Notice: The State of North Dakota is leasing 174.07 net mineral acres. The acreage is included in a 563.55 acre spacing unit consisting of Sections 30 and 31 of T150N-R104W. The lease offered will be 3/16ths royalty rate. Whiting Oil and Gas Corporation has submitted an AFE to drill and complete the Kuykendall 34-31-1H single lateral cross spacing unit horizontal well to test the middle Bakken formation. Successful bidder will have option to participate in a proposed AFE 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. Please check the following link to view the AFE.
Operator Statement Regarding AFE: The winning bidder will have 30 days from the date the auction ends to make their election.
BIDDER ADVISORY: Please review the mock lease documents below, as they will reflect the form of the actual lease will be issued, including a 3/16th Royalty.
Whiting Petroleum holds 1,100,000 gross acres and 700,000 net acres in the Bakken/Three Forks hydrocarbon system in the Williston Basin.
Well Information:
Kuykendall 34-31-1H
Sections 30 & 31: T150N R104W
McKenzie County, ND
Location: Surface location is in the SWSW of Section 32-T150N-R104W with bottom of hole estimated to be 240' FNL, 660' FWL of Section 30-T150N-R104W
Operated by Whiting Oil and Gas Corporation
NDIC Order Number: 18167
Formation: Middle Bakken
Field Name: Hay Creek
Spud Estimated March 31st, 2013
Lease Term | 5 years |
Royalty Rate | 3/16 |
Rental Rate | .00/acre/year |
Rental Due at Closing | 1 year |
Gross Acres | 174.07 |
Net Acres | 174.07 |
N.D. Admin Fee | .00 |
Buyer Premium | 2% of bonus bid |
North Dakota Statement Regarding River Boundaries
Under federal law, the state owns the beds of all navigable rivers and lakes, such as the Yellowstone and Missouri Rivers and Lake Metigoshe. The lease being offered is for the minerals between the ordinary high watermarks of the Yellowstone River.
The sovereignty of the minerals beneath the channel of the Rivers is not in dispute, but the State of North Dakota is currently involved in active litigation regarding the ownership of the shorezones, or that portion of land generally described as the area between the water's edge and the ordinary high water mark of navigable waterways.
Those cases being:
On January 28, 2013, in the consolidated cases of Brigham Oil & Gas v. Land Board and Reep v. State, the Williams County District Court granted the State's motion for partial summary judgment on title to shorezone minerals. However, if appellate courts reach a different conclusion, the bonuses received on acreages will be refunded accordingly.
Information regarding the rules and leasing of state minerals can be found on the website of the Minerals Division of the Department of Trust Lands: http://www.land.nd.gov/minerals/oilandgasleasing.aspx.
North Dakota Drilling Non-Consent Provisions
Persons interested in bidding on Leases OG-13-00307 and OG-13-00308 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 Leases OG-13-00307 and OG-13-00308, 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 Leases OG-13-00307 and OG-13-00308 and their interests, and if so the amount of the risk penalty, would be addressed at a hearing held by the Industrial Commission.
Bid History (Top 10)
Bidder
Placed
Amount
Bidder #8
3/18/2013 3:49:21 PM
$2,760
Bidder #5
3/21/2013 11:25:05 AM
$2,750
Bidder #8
3/18/2013 3:49:21 PM
$2,510
Bidder #5
3/21/2013 9:57:17 AM
$2,500
Bidder #8
3/18/2013 3:49:21 PM
$2,010
Bidder #5
3/20/2013 11:20:31 AM
$2,000
Bidder #8
3/18/2013 3:49:21 PM
$1,760
Bidder #5
3/20/2013 10:46:31 AM
$1,750
Bidder #8
3/18/2013 3:49:21 PM
$1,510
Bidder #5
3/19/2013 1:15:09 PM
$1,500