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FAQ's

Mineral Owner Questions
Question
When leases are purchased whose name is typically used? Does the oil company's name appear?
Answer

Quite often the oil and gas company’s (operator) name is not listed as the Lessee on the oil and gas lease. Many Operators prefer to remain confidential to the public when they are in the leasing stage of an oil and gas exploration play. In order to accomplish that, operators will contract a lease broker to purchase leases on their behalf. Should a Lessor want to know who the eventual operator of the lease will be, the Lessor can inquire about this from the lease broker. Should the lease broker not divulge such information then it is up to the Lessor as to whether or not they want to lease to an entity that is not provided.
 

Bakken Basics
Question
What's the lifespan of these new Bakken wells? How many times can you frac a Bakken well?
Answer

Engineering analysis of the new Bakken wells indicates they will produce for about 30 years. Most new Bakken wells have been frac’d twice and many three times.
 

Bakken Basics
Question
What's the formation below the Bakken?
Answer

Devonian Three Forks, which is a Devonian age dolomitic silt stone that is found just below the lower Bakken shale. The Three Forks is considered part of the Bakken pool.
 

Bakken Basics
Question
What percentage of a barrel of Bakken oil is gasoline and diesel fuel?
Answer

A modern refinery can make about 95% of a barrel of Bakken crude oil into gasoline, diesel, and jet fuel.
 

Mineral Owner Questions
Question
What percent must be leased before they can force others to act? Explain risk pooling.
Answer

There is no specific percent required for an operator to pursue “force pooling” or “Recovery of a Risk Penalty” as it’s defined by the State of North Dakota Industrial Commission (NDIC).  The NDIC has authority to approve such an action pursuant to statute 43-02-03-16.3.  An operator does, however, need to have an interest in the drilling unit of the proposed well, whether it is by lease or mineral, in order to propose the forced action.

Obtaining NDIC approval requires the operator to provide a written invitation to participate in the risk and cost of a well.  If the party receiving the invitation to participate is not subject to a lease or other contract for development (mineral interest), the operator seeking such recovery action must make a good-faith attempt to lease said party.  The risk penalty for this interest owner is 50% of their share of the costs of drilling and completing a well, while an owner with an interest derived by lease or contract realizes a 200% penalty.

The written invitation to participate must include the well site location, depth and objective zone, along with estimated cost, projected commencement date, date the invitation must be accepted and a notice to the invited party about the plan to impose the risk penalty.  The invited party may convey its opposition to the proposed risk notice directly to the operator, or pursue its opposition with the NDIC through hearing.

An election to participate, by the invited party, must be returned in writing to the operator, and is binding provided the well operations are commenced within ninety (90) days after the date the operator advises it must be accepted.