ND Oil and Gas Advice Column

I own mineral rights on 320 acres in Divide County, ND at T163-R95. At present, it is leased to Empire Oil Co. The 5 year lease will expire in Nov. 2009. What would be fair terms for a new lease ($/acre and royalty percentage)? Thanks in advance for your response.

I have some land in McKenzie County and a company wants to run a pipeline across it. How much per rod is the going rate for damages. Also anything else I should be aware of?

Terry wrote:

I have some land in McKenzie County and a company wants to run a pipeline across it. How much per rod is the going rate for damages. Also anything else I should be aware of?

What kind of pipeline? What diameter? steel or plastic? what company?

Pat in Upstate NY wrote:

I own mineral rights on 320 acres in Divide County, ND at T163-R95. At present, it is leased to Empire Oil Co. The 5 year lease will expire in Nov. 2009. What would be fair terms for a new lease ($/acre and royalty percentage)? Thanks in advance for your response.

Right now leases arent bringing very much. The best offer i have heard of this year is 17.5%,$200 per acre for 5 years. Not bad but not the best offer. If you can get this i would think about it otherwise just let the lease expire and wait for a better offer.

The Big Fish wrote:

<quoted text>
What kind of pipeline? What diameter? steel or plastic? what company?

I wasn't home when the guy called. He is supposed to call back early this week. As I have never had anything to do with negotiating a pipline easment I am just looking for general information regarding damages, contracts, companies or anything else to look out for. Perhaps I should check back with my questions after talking to him.

We have some land without a lease in Divide County, North Dakota. We have been contacted about our land - and we are in negotiations. I know it is important to have a lawyer review the lease etc and I appreciate your information on the dollars, percentage and years.
My question is - if we are dealing with a "flipper" and sign an agreement - is it based on the flipper getting it sold off too someone else before we get the lease money - or a secure lease?

Terry wrote:

<quoted text>
I wasn't home when the guy called. He is supposed to call back early this week. As I have never had anything to do with negotiating a pipline easment I am just looking for general information regarding damages, contracts, companies or anything else to look out for. Perhaps I should check back with my questions after talking to him.

Well if its a plastic pipe, then i would take whatever they offer. If its a plastic pipe and your land is pasture or rocks then its nothing to worry about because the trench for the pipeline will be about 4 feet deep and about a foot wide made with a ditch witch. If its a 12" steel line then i would think about it.

Dakota Maid wrote:

We have some land without a lease in Divide County, North Dakota. We have been contacted about our land - and we are in negotiations. I know it is important to have a lawyer review the lease etc and I appreciate your information on the dollars, percentage and years.
My question is - if we are dealing with a "flipper" and sign an agreement - is it based on the flipper getting it sold off too someone else before we get the lease money - or a secure lease?

No, you SHOULD get your money if its a flipper and he cannot flip it. There are instants also when a real company leases and doesnt pay up either just because they cannot make a deal with the company that owns the adjoining leases.

Pat - Lone Tree Energy is making an offer on the same Township and Range as yours to land we own. They're doing a top lease as the current lease isn't up until September '10.
Big Fish - Would it be in our best interest to ask the current lease holder (Empire) if they want to make an offer?

Thanks, Joe, for the information you shared regarding a current leasing offer on your land in the same Township and Range as my in Divide Co.

Joe in Bismarck wrote:

Pat - Lone Tree Energy is making an offer on the same Township and Range as yours to land we own. They're doing a top lease as the current lease isn't up until September '10.
Big Fish - Would it be in our best interest to ask the current lease holder (Empire) if they want to make an offer?