Does anyone ever refuse to lease their Oil/Mineral Rights?

Been reading all these articles in the news about drilling in North Dakota, and it seems a lot of people are doing pretty well letting companies drill for oil on their land. Which makes me wonder... Does anyone ever *refuse* to lease their mineral rights to the oil companies? And if so, does anyone know what some of the reasons are?

Josh wrote:

Been reading all these articles in the news about drilling in North Dakota, and it seems a lot of people are doing pretty well letting companies drill for oil on their land. Which makes me wonder... Does anyone ever *refuse* to lease their mineral rights to the oil companies? And if so, does anyone know what some of the reasons are?

No never heard of someone turning down leasing...you would have to be pretty stupid not to lease. I have heard of people not leasing for awhile just to either negoicate more money or better terms or perhaps to put the oil well in a certain spot instead of where the oil company wants it but thats it...why would you turn down hundreds of thousands of dollars for free...in some cases millions of dollars..???? YOu ever see the beverly hillbillys show...???

I have heard of someone turning down a lease. But it was an older man that was a farmer. His reasoning was because of his morals. There are alot of people in North Dakota that want all the money they can make, but there still are a few in the older generation who still have this hope for the "clean" country-side. You can see for it yourself if you go up in Burke or Mountrail county. Every couple acres there's a rig up...not the prettiest thing to look at when your use to green grass and horses. Oh, I forgot to add most of the time even if they aren't willing to lease because of their morals they eventually give in because they realize they"re fighting a battle in a war they already lost.

Michelle wrote:

I have heard of someone turning down a lease. But it was an older man that was a farmer. His reasoning was because of his morals. There are alot of people in North Dakota that want all the money they can make, but there still are a few in the older generation who still have this hope for the "clean" country-side. You can see for it yourself if you go up in Burke or Mountrail county. Every couple acres there's a rig up...not the prettiest thing to look at when your use to green grass and horses. Oh, I forgot to add most of the time even if they aren't willing to lease because of their morals they eventually give in because they realize they"re fighting a battle in a war they already lost.

You must be rich....you have to be rich to think like that.

Michelle wrote:

I have heard of someone turning down a lease. But it was an older man that was a farmer. His reasoning was because of his morals. There are alot of people in North Dakota that want all the money they can make, but there still are a few in the older generation who still have this hope for the "clean" country-side. You can see for it yourself if you go up in Burke or Mountrail county. Every couple acres there's a rig up...not the prettiest thing to look at when your use to green grass and horses. Oh, I forgot to add most of the time even if they aren't willing to lease because of their morals they eventually give in because they realize they"re fighting a battle in a war they already lost.

I dont understand how they are losing a battle in a war they already lost??? i dont understand...please explain

I work for a company that does leasing. It does happen that people turn down a lease. The one thing that many people forget because of the excitement of an oil company ( in their minds... $$$) contacting them for a lease, is that just because you have a lease, doesn't imply that they will put a well on your land or land you have mineral rights in. More than likely it will expire and later on you'll lease it again to someone else.

MLS wrote:

I work for a company that does leasing. It does happen that people turn down a lease. The one thing that many people forget because of the excitement of an oil company ( in their minds...$$$) contacting them for a lease, is that just because you have a lease, doesn't imply that they will put a well on your land or land you have mineral rights in. More than likely it will expire and later on you'll lease it again to someone else.

Most people would be stupid to turn down a lease. Unless your rich already.

What's happening in Burke Co ND. Have only 2.5 acres and Permian Basin Acquisition Fund wants to buy rights for $500 Acre

Nate,
I have a question for MLS if he/she (or anyone for that matter) is still reading this post. Isn't one of the big advancements in drilling -- horizontal drilling so say I own the mineral rights on my land, but my neighbor only owns the surface rights. If I drill onto the neighbors land, is my company's job to find the person(s) who own the mineral rights and if those rights expire and no one has claimed the mineral rights, does the farmer who owns the surface rights now own the minerals rights -- through some prior sort of application process to obtain those mineral rights -- in case no one claimed upon expiration?
Let me know if this makes sense -- I can clarify...

North Dakota ex-pat wrote:

Nate,
I have a question for MLS if he/she (or anyone for that matter) is still reading this post. Isn't one of the big advancements in drilling -- horizontal drilling so say I own the mineral rights on my land, but my neighbor only owns the surface rights. If I drill onto the neighbors land, is my company's job to find the person(s) who own the mineral rights and if those rights expire and no one has claimed the mineral rights, does the farmer who owns the surface rights now own the minerals rights -- through some prior sort of application process to obtain those mineral rights -- in case no one claimed upon expiration?
Let me know if this makes sense -- I can clarify...

well first thing, if there is no clear title to the mineral rights on your neighbors place then that will have to be cleared up before the oil company will ever drill. If your neighbor owns the surface but the minerals are unclear then your neighbor can claim the minerals. If someone who sold your neighbor his land they could also claim the minerals....

If one mineral owner isn't leased, or refuses to lease a well can still be drilled on that land, as a matter of fact, only 1% of the mineral interests need to be leased to be able to drill. There are plenty of cases where the mineral owners cannot be found, they died without deeding and you're 5 generations down the line. A good faith effort has to be made finding these people but sometimes it's near impossible. Before drilling the company will try to find everyone who owns rights, if they're leased great, or they participate if they are found but not leased. If they cannot be found (and a well is producing), the money for that mineral interest goes into a suspense account, and after 10 years of not finding the owner, the money gets turned over to the state, and from that point on it goes to the state. ND has a law that does allow surface owners to reclaim abandoned mineral interests. BUT they have to follow a procedure, it's not automatic. An attorney will be needed to draw up the documents, but I've seen it done and come across it. For more info look into North Dakota Century Code 38-18.1

I have two questions related to the horizontal drilling topic above. If a well is drilled adjacent to land that I own the mineral rights to, how do I know if they're drilling into my area? Secondly, how does the driller pay in horizontal drilling situations - do they pay both mineral rights holder where the well is physically located as well as the holder for where he's drilled horizontally to? Seems a driller could end up paying double royalties in this situation, correct? Thanks very much for any insight.
Brian

bwl wrote:

I have two questions related to the horizontal drilling topic above. If a well is drilled adjacent to land that I own the mineral rights to, how do I know if they're drilling into my area? Secondly, how does the driller pay in horizontal drilling situations - do they pay both mineral rights holder where the well is physically located as well as the holder for where he's drilled horizontally to? Seems a driller could end up paying double royalties in this situation, correct? Thanks very much for any insight.
Brian

First of all, Where the well is physically located doesnt matter. First they have to lease your mineral rights before drilling. if they are drilling on your mineral rights, if they were, they should have contacted you before they started. Send me your location, Section township and range and i can check the state oil and gas website to see.

bwl wrote:

I have two questions related to the horizontal drilling topic above. If a well is drilled adjacent to land that I own the mineral rights to, how do I know if they're drilling into my area? Secondly, how does the driller pay in horizontal drilling situations - do they pay both mineral rights holder where the well is physically located as well as the holder for where he's drilled horizontally to? Seems a driller could end up paying double royalties in this situation, correct? Thanks very much for any insight.
Brian

I guess i didnt answer the rest of your questions. There is no such thing as "double royalities". And as i have stated in other threads on this topix site, The oil company will space the well on 640 acres or 1280 acres. So anyone with mineral rights within the 1 section or 2 sections get a share of the well.

The Big Fish wrote:

<quoted text>
I guess i didnt answer the rest of your questions. There is no such thing as "double royalities". And as i have stated in other threads on this topix site, The oil company will space the well on 640 acres or 1280 acres. So anyone with mineral rights within the 1 section or 2 sections get a share of the well.

Big Fish - Thanks for your answers, much appreciated. The area is Township 159 Range 95 west, sections 28 and 33. I checked the oil and gas website and it looks like there are two dry holes on 28 and one where the permit expired. Nothing on 33. I'm not sure when the dry holes were drilled - are there dates somewhere on that site? At first glance it looks like these two sections are situated between two more densely drilled areas...not sure if that means much, just an observation. Are you aware of activity in this area? Thanks again.
Brian

bwl wrote:

<quoted text>
Big Fish - Thanks for your answers, much appreciated. The area is Township 159 Range 95 west, sections 28 and 33. I checked the oil and gas website and it looks like there are two dry holes on 28 and one where the permit expired. Nothing on 33. I'm not sure when the dry holes were drilled - are there dates somewhere on that site? At first glance it looks like these two sections are situated between two more densely drilled areas...not sure if that means much, just an observation. Are you aware of activity in this area? Thanks again.
Brian

Since you were on the oil and gas website you need to look up any permits. i couldnt find any but you might be able to find them. Are you leased?

bwl wrote:

I have two questions related to the horizontal drilling topic above. If a well is drilled adjacent to land that I own the mineral rights to, how do I know if they're drilling into my area? Secondly, how does the driller pay in horizontal drilling situations - do they pay both mineral rights holder where the well is physically located as well as the holder for where he's drilled horizontally to? Seems a driller could end up paying double royalties in this situation, correct? Thanks very much for any insight.
Brian

I am a free holder in canada, and have to say, we have the rights and ability to negotiate our contracts to pay us if they find oil adjacent, our whatever terms you like. It's by right of capture who owns the oil. Put a clause in the lease to allow for sucking up the oil underneith you. They are not allowed to drill if everyone does not agree to a lease within a certain radius. Look at the freehold owners website for much helpful information on being a mineral rights owner.

The Big Fish wrote:

<quoted text>
Since you were on the oil and gas website you need to look up any permits. i couldnt find any but you might be able to find them. Are you leased?

I believe you can hover your mouse over the well in question , first select the inquire icon, or the question mark. Then select the well, and click it. A box will show up with very detailed information, like dates, depths, findings, measurements, etc.

Why not to lease if you own minerals? Being a farmer and ranchers wife, we own mostly the surface, a portion of the minerals and only a wee bit of the royalties. The royalties is where the money is and how it is disbursed. Ours is a 3rd generation farm, so the royalties are split between many generations of family members or other people. Therefore, even if you own all the minerals, we would get only $30 to $100 per month. And as surface owners, we are still responsible for all taxes and insurances on that well site whether we own minerals under it or not. Compare that to our surface which we farm and ranch and make a reasonable income off of. Do we want to take the risk of losing water to our cattle and to our farmsteads caused by drilling? To lose prime cattle pasture caused by dust of 100’s of trucks going by? To lose native soil land, wetlands, and prime hunting ground that could be destroyed by roads being made to these wells. Do you know if our native animals and wildlife wouldn’t die in these areas because oil sites are not fenced off and with the drought the animals may drink the anti freezing dripping off pipes or the salt water lying in shallow pits by the wells? The world is going green our county seems to want to go black. Yes, people there are many, many reason why not to sell your mineral acres and/or if you do, why not start putting some clauses in your leases to protect some of the damages that might arise out of oil production. Why just jump at any lease, money? Minerals is your piece of our earth, maybe the only piece you will ever have, just don’t sign on the dotted line before looking at all aspects of the bigger picture.

We have mineral rights to 350+ acres in Burke County, 161 93 and 161 94, but we have yet to lease our rights. I have been seeing some say that most of the rights have already been leased. Do you think that those who have not been approached will see activity in that direction now that oil is going back up again?