SOLD
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Tract:
OG-14-00001, OG-14-00002
Gross Acres:
320.00
Net Acres:
240.00
Time Remaining:
Auction has ended
Start Time:
12/23/2013 2:30 PM CST
End Time:
1/6/2014 2:30 PM CST
Your Bid:
-
Highest Bid:
$510/acre
Starting Bid:
$50/acre
Bid Increment:
$10
Total Cost at Highest Bid:
$126,068
(Bonus + Agency Fees + Advanced Rental + 2% Buyer Premium)
Legal Description:
Tract Details
Lease No.
OG-14-00001, OG-14-00002
County, State
Billings, ND
Gross Acres
320.00
Net Acres
240.00
Royalty Rate
3/16
Lease Term
5 Years (Paid Up)
Rental/Acre (Per Year)
$1.00
Rental Due At Closing
$1,200.00
ND Administrative Fee
$20.00
Buyer Premium
2.00%
Additional Information
Notice: The State of North Dakota is leasing 240.00 net mineral acres. The acreage is included in a 1280 acre spacing drilling unit. The leases offered will be 3/16ths royalty rate. Continental Resources has submitted an AFE to drill and complete the Snider 1-21H1 well to be drilled as a single lateral horizontal well to test the Three Forks formation at an approximate vertical depth of 10,771'. Successful bidder will have the option to participate in a proposed AFE with an 18.75% WI 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 well was spudded on November 15, 2013. The successful Bidder will have 30 days from the close of auction date to notify Continental of their election to participate or not in the AFE.
The tract OG-14-00001, T141W-R98N-16 NE4, covers 160 net acres and 160 gross acres. The tract OG-14-00002, T141W-R98N-16 SW4, covers 160 gross acres and 80 net acres.
Notice: Tract OG-14-00001, T141W-R98N-16 NE4, is within an area identified as essential wildlife habitat, however the Department of Trust Lands does not manage the surface.
BIDDER ADVISORY: Please review the mock lease documents below, as they will reflect the form of the actual lease which will be issued, including a 3/16th Royalty.
Well Information:
Snider 1-21H1
Sections 16 & 21: T141N R98W
Billings County, ND
Location: Surface location is 350' FSL & 1980' FEL of Section 21-141N-98W, Billings County, North Dakota.
Operated by Continental Resources
NDIC Order Number: 26795
Formation: Three Forks formation
Field Name: Ukraina
Spud Estimated November 15, 2013
Lease Term | 5 years |
Royalty Rate | 3/16 |
Rental Rate | $1.00/acre/year |
Rental Due at Closing | 5 year |
Gross Acres | 320.00 |
Net Acres | 240.00 |
N.D. Admin Fee | $20.00 |
Buyer Premium | 2% of bonus bid |
North Dakota Drilling Non-Consent Provisions
Persons interested in bidding on Leases OG-14-00001 and OG-14-00002 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-14-00001 and OG-14-00002, 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-14-00001 and OG-14-00002 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 #3
1/6/2014 2:29:11 PM
$510
Bidder #7
1/6/2014 2:23:42 PM
$500
Bidder #3
1/6/2014 2:28:53 PM
$400
Bidder #7
1/6/2014 2:23:42 PM
$310
Bidder #3
1/6/2014 2:28:43 PM
$300
Bidder #7
1/6/2014 2:23:42 PM
$210
Bidder #3
1/6/2014 2:28:28 PM
$200
Bidder #7
1/6/2014 2:23:42 PM
$160
Bidder #3
1/6/2014 2:28:19 PM
$150
Bidder #7
1/6/2014 2:21:49 PM
$130