SOLD
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Tract:
NDSWC-0001
Gross Acres:
80.00
Net Acres:
40.09
Time Remaining:
Auction has ended
Start Time:
9/11/2013 3:00 PM CDT
End Time:
9/18/2013 3:00 PM CDT
Your Bid:
-
Highest Bid:
$11,610/acre
Starting Bid:
$50/acre
Bid Increment:
$10
Total Cost at Highest Bid:
$474,954.25
(Bonus + Agency Fees + Advanced Rental + 2% Buyer Premium)
Legal Description:
Tract Details
Lease No.
NDSWC-0001
County, State
McKenzie, ND
Gross Acres
80.00
Net Acres
40.09
Royalty Rate
1/5
Lease Term
5 Years (Paid Up)
Rental/Acre (Per Year)
$1.00
Rental Due At Closing
$200.45
ND Administrative Fee
$0.00
Buyer Premium
2.00%
Additional Information
Notice:
The North Dakota State Water Commission is offering 40.09 net mineral acres for lease. The acreage is included in a 2,533.89 acre spacing unit consisting of Sections 4, 9, 16, & 21 T153N-R101W, McKenzie County, North Dakota.
The lease will carry a 1/5th royalty.
Continental Resources has submitted Four (4) AFE's to drill and complete four wells from a single ECO-Pad® located in Section 16 (see plat). Each of the four proposed wells has their own participation election per the orders established by the NDIC.
The proposed wells are:
Columbus Federal 2-16H - Drilled as a single lateral horizontal well to test the Three Forks formation at an approximate vertical depth of 10,607'. Surface Hole Location 2508' FNL & 222' FEL Section 16.
Columbus Federal 3-16H - Drilled as single lateral horizontal well to test the Middle Bakken formation at an approximate vertical depth of 10,543'. Surface Hole Location 2469' FNL & 199' FEL Section 16.
Tallahassee 2-16H - Drilled as single lateral horizontal well to test the Middle Bakken formation at an approximate vertical depth of 10,518'. Surface Hole Location 2547' FNL & 245' FEL Section 16.
Tallahassee 3-16H - Drilled as a single lateral horizontal well to test the Three Forks formation at an approximate vertical depth of 10,632'. Surface Hole Location 2585' FNL & 268' FEL Section 16.
Successful bidder will have option to participate in the proposed AFE's or decline to join the AFE's 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.
Continental Resources Drilling AFE's for 4 Wells
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 lease document below, as it will reflect the form of the actual lease which will be issued, including a 1/5th royalty.
McKenzie County Drilling Rigs, Permits and Completions
Rigs
Permits
Completions
Click to Enlarge
Four AFE's for 4 wells all drilled from one ECO-Pad® as follows:
Columbus Federal 2-16H
40.09 Net Mineral Acres in a 2533.89 Acre Unit made up of Sections 4, 9, 16 & 21 T153N-R101W McKenzie County, North Dakota
1.58213% Working Interest
Surface Hole Location 2508' FNL & 222' FEL Section 16
Net AFE Cost $150,244.37
Columbus Federal 3-16H
40.09 Net Mineral Acres in a 2533.89 Acre Unit made up of portions of Sections 4, 9 & 21 T153N-R101W McKenzie County, North Dakota
1.58213% Working Interest
Surface Hole Location 2469' FNL & 199' FEL Section 16
Net AFE Cost $149,595.68
Tallahassee 2-16H
40.09 Net Mineral Acres in a 2533.89 Acre Unit made up of portions of Sections 4, 9 & 21 T153N-R101W McKenzie County, North Dakota
1.58213% Working Interest
Surface Hole Location 2547' FNL & 245' FEL Section 16
Net AFE Cost $138,979.44
Tallahassee Federal 3-16H
40.09 Net Mineral Acres in a 2533.89 Acre Unit made up of portions of Sections 4, 9 & 21 T153N-R101W McKenzie County, North Dakota
1.58213% Working Interest
Surface Hole Location 2585' FNL & 268' FEL Section 16
Net AFE Cost $138,750.03
Lease Term | 5 years |
Royalty Rate | 1/5 |
Rental Rate | $1.00/acre/year |
Rental Due at Closing | 5 years / Paid-Up |
Gross Acres | 80 |
Net Acres | 40.09 |
Buyer Premium | 2% of bonus bid |
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 #19
9/18/2013 2:59:42 PM
$11,610
Bidder #31
9/18/2013 2:59:56 PM
$11,600
Bidder #19
9/18/2013 2:59:42 PM
$11,510
Bidder #31
9/18/2013 2:59:43 PM
$11,500
Bidder #19
9/18/2013 2:57:55 PM
$11,260
Bidder #31
9/18/2013 2:59:27 PM
$11,250
Bidder #19
9/18/2013 2:57:55 PM
$11,210
Bidder #24
9/18/2013 2:59:25 PM
$11,200
Bidder #19
9/18/2013 2:57:55 PM
$11,110
Bidder #25
9/18/2013 2:59:09 PM
$11,100