Server Time (CDT): Mar. 28, 11:59:05p

OG-14-00001, OG-14-00002

Billings County, ND
North Dakota Oil and Gas Lease Sale

SOLD

Property Schedule

Due Diligence Began 12/17/2013
Bidding Started 12/23/2013
Bidding Ended 1/6/2014 2:30 PM

Registration Status:

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Your Bid Status:

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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.

AFE: Snider 1-21H1

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.

Mock Lease Forms

Unit Map

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Area Activity Map

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Area Completions

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Area Drilling Rigs

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Area Permits

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"In the Bakken formation, the hydrocarbon-rich, but relatively impermeable upper and lower shales are widely believed to be the source rocks generating the oil that moved to the somewhat more permeable middle shale layer."
Excerpt from IPAA Article, The Mighty Bakken

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 Term5 years
Royalty Rate3/16
Rental Rate$1.00/acre/year
Rental Due at Closing5 year
Gross Acres320.00
Net Acres240.00
N.D. Admin Fee$20.00
Buyer Premium2% 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.

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 total 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
VP of Engineering / Government Lease Sales
440 Louisiana, Suite 600
Houston, TX 77002
(832) 403-3122

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


View 8 earlier bids...