SOLD
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Tract:
OG-14-00535, OG-14-00536, OG-14-00537
Gross Acres:
160.00
Net Acres:
80.00
Time Remaining:
Auction has ended
Start Time:
9/9/2014 2:30 PM CDT
End Time:
9/16/2014 2:30 PM CDT
Your Bid:
-
Highest Bid:
$1,260/acre
Starting Bid:
$50/acre
Bid Increment:
$10
Total Cost at Highest Bid:
$103,246
(Bonus + Agency Fees + Advanced Rental + 2% Buyer Premium)
Legal Description:
Tract Details
Lease No.
OG-14-00535, OG-14-00536, OG-14-00537
County, State
Divide, ND
Gross Acres
160.00
Net Acres
80.00
Royalty Rate
3/16
Lease Term
5 Years (Paid Up)
Rental/Acre (Per Year)
$1.00
Rental Due At Closing
$400.00
ND Administrative Fee
$30.00
Buyer Premium
2.00%
Additional Information
Notice: The State of North Dakota is leasing 80.00 net mineral acres. The acreage is included in a 1,268.39 acre spacing drilling unit. The leases offered will be 3/16ths royalty rate. Baytex Energy USA Ltd. has submitted an AFE to drill and complete the Nelson 7-6-161-98H 1XB well to be drilled as a single lateral horizontal well to test the Plummer-Bakken Pool formation at an approximate total vertical depth of 8,676'. Successful bidder will have the option to participate in a proposed AFE with an 6.31% 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: Baytex has spud the Nelson 7-6-161-98H 1XB well on August 9, 2014. The successful Bidder will have until September 25, 2014 to notify Baytex of their election to participate or not in the AFE.
T161N-R98W-7:
          OG-14-00535 S2NE4 containing 40 net / 80 gross acres
          OG-14-00536 NE4SW4 containing 20 net / 40 gross acres
          OG-14-00537 SE4NW4 containing 20 net / 40 gross acres
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:
Nelson 7-6-161-98H 1XB
Sections 6 & 7: T161N R98W
Divide County, ND
Unit Size: 1,268.39 Acres
Location: Surface location is 289' FNL & 2,075' FEL of Section 18-T161N-R98W, Divide County, North Dakota.
Operated by Baytex Energy USA Ltd.
Formation: Bakken
Field Name: Plummer
Spud Date: August 9, 2014
Lease Term | 5 years |
Royalty Rate | 3/16 |
Rental Rate | $1.00/acre/year |
Rental Due at Closing | 5 year |
Gross Acres | 160.00 |
Net Acres | 80.00 |
N.D. Admin Fee | $30.00 ($10 per Lease) |
Buyer Premium | 2% of bonus bid |
North Dakota Drilling Non-Consent Provisions
Persons interested in bidding on Leases OG-14-00535, OG-14-00536 and OG-14-00537 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-14-00535, OG-14-00536 and OG-14-00537, 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 OOG-14-00535, OG-14-00536 and OG-14-00537 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 #15
9/16/2014 2:27:41 PM
$1,260
Bidder #21
9/16/2014 2:29:24 PM
$1,250
Bidder #15
9/16/2014 2:27:41 PM
$820
Bidder #17
9/16/2014 2:29:07 PM
$810
Bidder #15
9/16/2014 2:27:41 PM
$740
Bidder #14
9/16/2014 2:29:01 PM
$730
Bidder #15
9/16/2014 2:27:41 PM
$710
Bidder #17
9/16/2014 2:28:17 PM
$700
Bidder #15
9/16/2014 2:27:41 PM
$670
Bidder #14
9/16/2014 2:27:07 PM
$660