Now, For The Damages -- July 25, 2021

This story was published some days ago, in The Williston Herald, but for some reason I never posted it.

Posted now.

Last year the North Dakota Supreme Court upheld a lower court decision in the Wilkinson’s disputed mineral rights case that the state no longer has any claim to any minerals under Lake Sakakawea that lie outside the historical Missouri River channel.

But it also sent the case back to the lower court in Williams County, to consider damages.

Judge Paul Jacobson did just that on Thursday and Friday, hearing testimony from Wilkinson family members about their struggle to regain minerals that official records show the family retained after Lake Sakakawea was flooded in 1958.

To catch up on the story, see the tag,  "high water mark" or "riparian," although the latter was seldom used.

I considered this story the most egregious story to have come out of the Bakken up to that time, and I'm not aware of any story that is more egregious to this day. This was a "land grab" by the state, pure and simple; fortunately the court agreed.

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Whistle Register

Something to share with the oldest granddaughter who knows so much about music. I don't know if she knows about this, the whistle register.

At wiki.

Mineral Ownership Case Resolved: ND Supreme Court Rules In Favor Of Family -- August 28, 2020

Note: earlier in the Bakken, this was a big court case -- "high water mark" vs "low water mark." I never knew the story would get that big, and unfortunately I did not have a good tag for this issue. The closest I have is the "riparian" tag.  One can also search "egregious" on the blog, and also "land grab."

This was a top story of 2019:

The most egregious story to come out of the Bakken:

• North Dakota Supreme Court sides with state on mineral royalties;

From top stories, week 23, 2020:

Top North Dakota energy story:

• Land grab by the state (previously posted); see Geoff Simon's lead-off story;

From top stories, week 39, 2018:

Land grab:
NDIC accepts "ordinary high water mark study" results: the state owns 9,500 more acres than originally shown by the US Army Corps of Engineers; mineral owners along the river between New and Williston may find they don't have as many acres as they once thought they did

Others:

"Land grab" revisited.

 Original Post

 From Geoff Simon's top ND energy stories:

Wilkinson Mineral Ownership Case Resolved

ND Supreme Court Says Family Owns the Rights

Other Lakebed Mineral Claims Expected to be Filed

A long-standing case regarding ownership of minerals inundated by Lake Sakakawea has been resolved by the North Dakota Supreme Court in favor of the families that filed the claim.

The lawsuit dates back to 2012 when William Wilkinson and other plaintiffs sued the Land Board to determine ownership of the minerals under land they conveyed to the Corps of Engineers for construction and operation of the Garrison Dam, but reserved the minerals rights under the property. The state resisted the claim, arguing that the water that inundates the Wilkinson property is caused by the meandering Missouri River and not Lake Sakakawea.

The court determined that subsequent legislation passed by the 2017 Legislature (SB 2134) to define the ordinary high water mark of the Missouri River before the dam was built validated the Wilkinson claim. State law distinguishes land below the high water mark as that which "the high and continuous presence of water has destroyed its value for agricultural purposes, including hay land."

A lawyer representing the Wilkinsons was quoted by the Bismarck Tribune this week saying that the family is owed more than $1 million in oil and gas royalties now held in an escrow-type count, and that the case would likely result in hundreds of additional claims for millions of dollars.

Click here to read the Supreme Court decision.

It's Not Over Until It's Over -- The "Ordinary High Water Mark" Study -- October 26, 2018

Link at The Bismarck Tribune.

The Board of University and School Lands voted unanimously Thursday to contract with an engineering firm to do additional work related to a study of the Missouri River boundary, a process expected to take several months.

A new study of the ordinary high water mark of the Missouri River will require the North Dakota Department of Trust Lands to issue refunds or adjustments to bonus and royalty payments.

But Land Commissioner Jodi Smith said the study adopted last month by the North Dakota Industrial Commission does not give the commission enough information to proceed with those payments. The report does not allocate acreage above or below the ordinary high water mark.

Sounds like probate court, just at a higher level. 

I don't have a tag for this story. I never thought there would be so many articles on this.

Riparian. I do have a tag for "riparian." LOL.

Ordinary High Water Mark Study Accepted By The NDIC -- September 29, 2018

Disclaimer: there are opinions interspersed with facts in this post. It may be hard to separate fact from opinion. Do not make any financial or investment decisions based on what you read here. This is a layman's perspective based on newspaper articles. If this information is important to you, go to the source and get professional advice.

NDIC accepts "ordinary high water mark study" results: the state owns 9,500 more acres than originally shown by the US Army Corps of Engineers; mineral owners along the river between New and Williston may find they don't have as many acres as they once thought they did.

The study, directed by the Legislature, aimed to resolve disputes over oil and gas ownership by investigating the accuracy of the 1950s river survey conducted by the U.S. Army Corps of Engineers.

The Industrial Commission’s action determines the ordinary high water mark of the Missouri River. The final report concludes that North Dakota owns about 9,500 more acres than the corps survey of the river showed. The consultant did reduce the state’s ownership by about 900 acres based on “clear and convincing evidence” received during a public comment period last spring.

Josh Swanson, an attorney who represents several mineral owners, said Thursday he’s disappointed by the Industrial Commission’s decision, which he called sanctioning “a blatant taking of thousands of acres of mineral acres of private landowners.”

My understanding is that the study, at the NDIC website, which has been previously linked, is the study that the NDIC accepted. The links are at this post.

Two additional comments:

• it appears that some of the best oil locations in the Bakken are along the river between New Town and Williston
• 9,500 acres / 640 acres = 14 sections

How big is 14 sections? One of the very best fields in the Bakken is the Helis Grail; it is 30 sections in size (at the time of the original post).

Individuals who originally homesteaded may have had 160 acres, and over time, some successful farmers may have put together a section of land, or 640 acres (some may have done much, much better; I don't know). But if one's entire 160 acres were within the state's OHWM land, this would be an incredible blow.

If one bought mineral rights years ago in this contested area, and one has clear title to those mineral rights, I have no idea how that title-transfer process works. I guess that's why one buys "title insurance" when buying "real estate." Am I getting too far ahead of my headlights? See disclaimer above.

The original study was done in 1950? For almost 70 years that study was accepted by the state? I must be missing something.

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British Week At Central Market, Southlake, TX

New England Natural Gas Could Very Well Be The Story Of The Year -- Week 39: September 23, 2018 -- September 29, 2018

Vern Whitten quarterly package of photos; northwestern North Dakota here.

If you have time for only one post/story this weekend, read the September, 2018, Rystad Energy production newsletter at this link.

Peak oil? What peak oil? US hitting crude oil production records. So much for Hubbert.

US gasoline demand dropped precipitously.

Some of this has been previously posted.

US natural gas:

• fill rate well below 5-year average and the gap is not closing
• New England could face natural gas shortage over next month or so
• natural gas being diverted from New England to Florida
• Florida: #1 electricity producer in US; #2, Texas
• Florida: converting from coal to natural gas

Natural gas: this might be the story of the year -- lots of buzz, lots of talk -- from SeekingAlpha yesterday --

• a severe cold spell could raise Henry Hub natural gas prices to a range of $12-$16/MMBtu, “similar to where marginal generation costs of fuel oil and diesel would be,” says Citi’s Anthony Yuen
• and if bitter cold weather hits both the U.S. and “either Europe or Asia at the same time... spot LNG [liquefied natural gas] prices could surge to $20/MMBtu at the extreme," Yuen writes; Nymex U.S. natural gas currently trades at ~$3.00/MMBtu
• Yuen thinks a spike in gas prices this winter could lift shares of gas-oriented companies such as Range Resources, Southwestern Energy, and Cabot Oil & Gas
• shares of many gas companies, while up from winter lows, are still lower YTD, reflecting concerns that there is too much new gas supply to sustain a rally in the gas market

WTI: closes solidly above $73. Data points:

• "relentlessly climbs"
• Iranian sanctions: would remove 1.5 million bopd from global market
• Saudi Arabia will boost production by 0.5 million bopd in 4Q18

Saudi boost: Saudi Aramco to boost oil capacity by over one-half million bopd in 4Q18 -- link at Reuters

Iran: reported earlier that by November or so, South Korea would no longer be importing Iranian oil. Now it is being reported that China's top refiner will halve Iranian oil imports.

US crude oil production: staggering -- Rystad Energy. Link here.

US crude oil production, July, 2018: just short of 11 million bopd. 

Chevron: growing volume will support a growing dividend. -- SeekingAlpha.

US natural gas:

• fill rate well below 5-year average and the gap is not closing
• New England could face natural gas shortage over next month or so
• natural gas being diverted from New England to Florida
• Florida: #1 electricity producer in US; #2, Texas
• Florida: converting from coal to natural gas

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Back to the Bakken

Week 39

From Geoff's top North Dakota energy stories:

Back of the envelope:

• some folks suggest North Dakota production will level off at 1.5 million bbls / day
• unfettered, the Bakken should be able to produce 2.2 million bopd (early, early estimate)
• 2.2 million x 365 = 800 million bbls/year
• 40 billion bbls / 800 million bbls = 50 years of production
• 500-billion-bbl reservoir x 12% primary recovery = 60 billion bbls
• unfortunately many of us won't be around fifty years from now

Land grab:
NDIC accepts "ordinary high water mark study" results: the state owns 9,500 more acres than originally shown by the US Army Corps of Engineers; mineral owners along the river between New and Williston may find they don't have as many acres as they once thought they did

Records
SHD's Golden well pegs the company's natural gas pressure gauge
Bruin: almost 100,000 bbls of crude oil from one well in one month

Bakken 2.5
Slawson' sweet spot north of the river
XTO wants to unitize a large area of the Bakken -- good luck with that
MRO wells in Bailey oil field hitting 300,000+ bbls crude oil in one year
XTO's huge Sand Creek well;
CLR's Antelope wells -- Christmas in  July
Hess EN-Jeffrey wells; CLR Florida / Alpha wells
CLR's Kennedy-Miles wells
BR's Jerome wells
BR's CCU Corral Creek well
BR's Dodge well 
CLR's Hendrickson wells
Bruin E&P on a roll
Newfield Wisness well
QEP Tipi with 110,000 bbls in two months
Equinor picking up the pace: here; and, here; and, here; and, here;
PetroShale anticipates eleven (11) more wells on an existing 640-acre drilling unit
 
Fracking
Completion strategy for MRO wells in Reunion Bay

Refinery
East Coast refinery back in the news; taking advantage of the WTI - Brent spread 

Natural gas
ONEOK to build yet another natural gas processing plant, Demicks Lake II
ONEOK to increase natural gas processing in the Williston Basin

Bakken economy
Williston, Dickinson lead increase in August enplanements (boarding at airports) 

Miscellaneous
Awaiting results of the "ordinary high water mark" study
Legacy Fund deposits hit recent record

Other formations
Southwestern to target the Tyler

The Results Of The Ordinary High Water Mark Should Be Released Today Or Tomorrow -- September 27, 2018

Last Friday, September 21, 2018, we were told the NDIC would release the results of the "Ordinary High Water Mark" study "this week." This week ends tomorrow. At least "normal business hours."

Link here.

Final Missouri River Study To Be Released Next Week -- September 21, 2018

Updates

Later, 5:31 p.m. CDT: lots of issues here and folks have strong feelings on both sides; I don't have a dog in this fight. I may not have all the facts, but it is what it is. It will be fascinating to see how this plays out. To say the least. And the obvious.

Original Post

Top stories: here.

2017: here.

The most egregious story to come out of the Bakken: North Dakota State wants a "stay" on the mineral rights case. This was the case:

The state legislature, in an attempt to resolve disputed mineral rights that are hampering development of minerals in the Lake Sakakawea area, had commissioned a study of the historical, high water mark of the Missouri River prior to building Garrison Dam, which created Lake Sakakawea. Their legislation would also restrict the state’s mineral rights to that historical ordinary high water mark.

Williston Herald, April 29, 2018. New 

Update, The Bismarck Tribune -- September 21, 2018.

At this site, there are several links. The two first two links are the ones you are most likely interested in. The "word document" pdf will take a few minutes to download; it is 223 pages long. There is also a PowerPoint presentation which also loads very slowly. The data is very, very well done -- from my cursory view.

It is funny. Forgetting about the mineral rights for a moment, prospective landowners don't want land that is underwater; whereas prospective sellers will downplay the amount of land they are trying to sell that is likely to flood or is not particularly useful -- unless one plans to raise ducks -- because it is underwater.

Some years ago, this topic introduced me to the "riparian" biome -- and something our oldest granddaughter now knows well. LOL.

Also, this has nothing to do with "water rights" -- the allotment of water partitioned out to surface owners along the body of water.

ND Legislature Clarifies Minerals Under Lake Sakakawwa, Which Some Argue Is Not The Same As The Missouri River -- April 20, 2017

Updates

Later, April 22, 2017: it's nice the state legislature "corrected" this issue, but it seems this should have been settled by the ND Supreme Court a long time ago. Based on what little I know about mineral rights what the legislature did was a no-brainer and the courts should have agreed, and sorted this out years ago.

Original Post

 

A reader alerted me to this article in The Bismarck Tribune.

The North Dakota Legislature has approved a bill clarifying that the state does not own minerals under Lake Sakakawea, setting up a process to return an estimated $187 million in bonus, rent and royalty payments.

Supporters of Senate Bill 2134 say it’s about doing the “right thing” for citizens who retained their minerals when they lost land for the construction of the Garrison Dam, which created Lake Sakakawea.

“We need to make sure that we get the mineral ownership back to the rightful owner,” said Sen. Jessica Unruh, R-Beulah. “We need to clarify what the state owns and provide clarity and certainty for our judicial system.”

But opponents of the bill say the primary beneficiaries are likely the federal government and the oil industry, which was heavily involved with developing the legislation.

I have a lot of problems with that last statement but not worth the effort to discuss it. I have no dog in this fight.

There may have been some thought that this had to do with "the high water mark" issue, another "water issue" affecting mineral owners. This was also in the article:

The bill sets up a process to define the ordinary high water mark of the historic Missouri River channel as it existed before the Garrison Dam, starting with the 1950s survey of the river by the U.S. Army Corps of Engineers.

Riparian Justice! North Dakota Is A Low-Water Mark State

Updates

November 23, 2015: like North Dakota, Missouri is a "low-water state." From a pdf at this link: 

Missouri is a riparian water law state. This means that each individual landowner is entitled to make use of the water found on his property.

The laws that address riparian rights are therefore restrictive, in that the landowner cannot make unlimited or unrestricted use of that water in any way that he chooses. The right of a private individual to use and manage the water on or beneath his land is a “natural right,” which arises from land ownership and coincides with “riparian rights.”

“Riparian lands,”as defined by the courts, include all lands above underground waters and beside surface waters.

The riparian owner is free to use the water flowing across or under  his land so long as his usage does not interfere with the rights of other riparians.

To fully grasp the riparian concept, one must understand that the act of merely using water does not in itself constitute the ownership of that water. The limits on permissible usage and what specifically constitutes unreasonable use of water or land are generally the common focus in court cases.

To the extent that Missouri courts have addressed water use, they have generally followed the approach that all uses are allowable unless specifically prohibited, restricted, unreasonable, infringe upon the rights of others, markedly decrease the quality or diminish the quantity of water, or conflict with existing treaties, statutes or case law precedents. The riparian’s right to use the water in the future is not invalidated by disuse.

On the other hand, Florida is a "high-water state."

New Jersey is a "high-water state" and has an excellent handbook on the subject.  

Original Post

For background,

• This is not a land grab, February 3, 2013

The Bismarck Tribune is reporting:

A North Dakota Supreme Court decision releases millions in oil bonuses and royalties into the state coffers.

The high court said Thursday that the state owns minerals up to the ordinary high water mark on both sides of navigable rivers. Unless appealed to the U.S. Supreme Court, this ends a years’ long dispute while oil revenue that would normally have been paid out was withheld in special accounts.

The loser in this opinion are dozens of individuals, the city of Williston and Williams County who claimed minerals between the low- and high-water marks along the Missouri River in the Williston region, or what’s called the “shore zone” of the river.

Jan Conlin, the lead attorney for those individuals, said the ruling is disappointing and turns North Dakota’s own state law dating back to 1889 upside down.

She said at statehood states could choose to set themselves up as low- or high-water mark states and North Dakota, in a state law written 125 years ago, chose the low-water mark option.

“This sets North Dakota apart from all other states that set themselves up as a low-water state,” Conlin said.

I don't understand why Conlin would say this "turns North Dakota's own state law dating back to 1889 upside down." It sounds like she admits that at statehood, states could choose, and North Dakota chose to "think different."

I don't have a dog in this fight.

The decision means the state can allocate $135 million in lease bonuses that were set aside on the state Department of Trust Lands’ books and another $6.5 million in royalties that oil companies have been putting into escrow in the Bank of North Dakota since 2010.

Trust lands' director Lance Gaebe said prior to 2010, oil companies suspended royalty payments on river shore minerals claimed by both the state and private individuals rather than deposit them in escrow. He said companies weren’t required to report suspended payments so the total of those isn’t known.

He said the department will send notice to companies that the suspension ends with court’s ruling and the payments can be released to the department.

The dispute involves 150 wells so far.

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A Very Short Note to the Granddaughters

With the original story, posted back almost a year ago, our 10-year-old granddaughter learned about a new biome, the riparian biome. She wants to become a marine biologist. This is right up her alley creek.