Wednesday, May 29, 2019

North Dakota Board To Hear Case On Extension Of Leases -- May 29, 2019


May 31, 2019: MRO denied.

May 30, 2019: see this note. 

Original Post 

From The Bismarck Tribune:
North Dakota's Board of University and School Lands is set to decide on an oil company's request for a leasing extension that the state land commissioner said may set precedent, if granted.
Marathon Oil Company has had four leases to about 470 mineral acres in Dunn County since May 2013. The Badlands-area tracts north of Killdeer have proven difficult to develop for a variety of reasons, such as rough terrain and locating a drill pad. Marathon Oil has spent more than $4 million related to the tracts.
Mineral tracts leased through the North Dakota Department of Trust Lands expire after five years, with two 180-day extensions available under certain conditions.
In March 2018, the Land Board, comprising five state elected officials with Gov. Doug Burgum as chairman, negotiated and granted a one-time 360-day leasing extension to Marathon Oil under amended contractual terms.
Rough terrain? Considering where oil companies drill around the world, it's hard to believe that "rough terrain" is that "rough" in North Dakota. This will be interesting to follow. It's likely I will miss the results of the hearing -- if I fail to post the decision, hopefully some reader who catches it will let me know.


  1. Unclear how much it is being held up by govt restrictions, like species stuff. Article mentions some of that. Things can be a catch-22, like Feds complaining about flaring lost $$ and then stopping gathering pipes from being run on reservation.

    I don't think it is a big deal if they negotiate an extension or just put the acres up for new 5 year contract. Either way it is just a $$ decision for Trusts or for MRO.

    If situation is catch 22 (or marginal economics), than that will limit value of the acres in a rebid or what MRO will pay for an extension.

    Probably cleanest thing is to just put up for new 5 year bid. If situation is hard for developers they won't get much for the acres but oh well. MRO may also have some power if they have surrounding land (they are most efficient developer then). But oh well on that also

    1. I tend to agree; will comment more later. I'm being rushed by family commitments but wanted to get your comment posted. Thank you

    2. Thank you for a great note. I wish I could provide a great back-story to maybe why MRO has been unable to drill here, but .... well, see this note:

  2. A friend sent me your postings -- I have first hand knowledge of this project and hold the "rights" to the book and movie. Beside all the range wars between the Tribe, Allottees, the BLM, the NDIC, Trust Lands Dept, land swap negotiations and nasty geography, it also has sub-plots of irritable squatters and invisible mating butterflies. Upton Sinclair