North Dakota Board To Hear Case On Extension Of Leases, Update -- May 30, 2019

See this post for background. See more at this post.

There are two parts to this long note. Be sure to read the second part, which is perhaps even more interesting.

First part:

A reader writes me to provide some background to the case.

Apparently the case is being heard this morning and and decision should be made fairly soon.

The reader provided a lengthy back-story to this whole issue. I would like to print it in full, but I prefer not to become a target of any gun owner who might be offended.

Suffice it to say that the reader who knows the area under discussion very, very well, suggests that the problem is more likely to be related to "access" -- finding a road or easement into the area.

The reader agrees with me that "rough terrain" may not be the issue -- unless by "rough," MRO means the personality of some of the locals. Wow, you can take North Dakota out of the wild west (some consider North Dakota to be the midwest), but you can't take the wild west out of North Dakota.

[Another digression: somehow, Deadwood, SD, due south of Williston is definitely part of the Old West, but Williston is considered to be the Midwest by those who live in Montana.]

By the way, that reminds me of a story. A few years ago I was hired to take some photos of real estate in the Bakken area. On one particular Saturday morning I got very, very lost. I finally decided to ask for help, and proceeded down a long gravel road to a homestead; at the entrance of the long gravel road there was some sign saying it was private property and perhaps it would be best to seek help elsewhere. But I decided to chance it.

About a mile down the gravel road, on the south side of the river, I turned in toward the homestead, to be greeted by two barking dogs, the kind that look like they are not barking "welcome" but rather, "maybe, best, you stay in your car."

I was momentarily distracted until I heard gun shots. LOL.

An older gentleman (with ear/hearing protection) was pistol shooting at a target -- the target was between the gentleman and me. I'm glad to say that he must have been a good shot -- no bullet holes in the car (or me).

I must have talked to him; he must have been friendly; I must have gotten directions but I have no recollection of anything that happened after driving into the homestead.

Second part:

This is language from the agenda.  (I was going to pull up the ND Oil and Gas maps and haven't - may not get that done today)

The Commissioner and Department staff met with Marathon on January 22, 2019, and were made aware of concerns to obtain commercial production before expiration of the amended terms. The Commissioner and Department staff met with Marathon on January 25, 2019, and Marathon requested permission to explore the opportunity to place an off unit pad north of Enerplus’s well pad located on State surface. 

Department staff contacted Enerplus and requested a formal response to Marathon’s request to locate an off unit pad north of Enerplus’s well pad. 

In a letter dated February 12, 2019, Enerplus denied the request stating a violation of correlative rights and therefore opposed Marathon’s proposed pad location. On March 26, 2019, the Commissioner and Department staff met with Marathon to discuss concerns that commercial production would be obtained prior to the expiration of the amended terms. On April 4, 2019, the Commissioner received a formal request for extension from Marathon. The Commissioner responded on April 16, 2019, to Marathon’s request for an extension that the determination had been made that circumstances do not warrant extension of the leases per the Amendment of the Oil and Gas Lease dated May 4, 2018.

From the reader:

Here's part of a lengthy blurb from today's proposed agenda.  It goes on for many more paragraphs, but they just recap statute, so here's an excerpt of what I find relevant.

Marathon Oil Company Request for Lease Extension in Dunn County T148-R95W-16: All In May of 2013, Marathon Oil Company (Marathon) entered into four leases with the Board of University and School Lands (Board) (OG13-00342, OG13-00343, OG13-00344, and OG13- 00345). These leases cover 469.52 acres of Common Schools mineral tracts in T148N-R95W-16, Dunn County, North Dakota, and Marathon paid a total bonus to the Board of $3,850,064. Marathon states their total expenses to date are in excess of $4 million (bonus, surveys, archeological surveys, etc.). Marathon experienced extreme difficulties in developing these mineral tracts, including; complex stakeholders, environmental concerns, and rough terrain which have impeded timely development of the area. The North Dakota Department of Trust Lands (Department) has been working with Marathon since late 2015 in search of a viable solution to develop the section. On November 20, 2017, a formal request was directed to Commissioner Gaebe requesting a 365- day extension. On January 23, 2018, Commissioner Smith received another formal request for a 365-day extension.

Paydirt (pardon the pun)

So - that land is 2 to 3 miles north and 1 to 2 miles west of Lost Bridge.  (Lost Bridge is on Section 34).  That whole tract  is listed as State of ND Wildlife Management.  It's the western 469 + acres of Section 16. The remaining eastern slice is Ft Berthold Reservation.  (The eastern 18 sections of that township is FBIR, and the reservation boundry picks up about a quarter mile into each adjoining section north to south)

Once Highway 22 continues north of the river, it veers east about 2 miles.  So - any access from Hwy 22 is through the reservation.  The section immediately south of 16, Section 21, is USA land, but you can't get to that unless you go through the Reservation. 

This is the area we are discussing:

But look at that. There's already an existing MRO pad even closer than the Enerplus pad. I must be missing something or the whole story is not being told. 

The reader mentioned that "Lost Bridge" is in section 34: