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  • North Dakota Petroleum Council - About Oil Can!
    Oil Can About Oil Can The Oil Can program is designed to open the lines of communication and improve understanding between the petroleum industry of North Dakota and key stakeholder groups such as property owners policy makers community leaders media reporters and the general public View our new Oil Can website and commercial at www northdakotaoilcan com The Oil Can program is built on three guiding principles Listen first The petroleum industry will provide stakeholders with various avenues from which to provide input and feedback e g town hall meetings interactive website mail based and internet based surveys phone e mail and Oil Can mailings Rather than focusing primarily on sending information to stakeholders the petroleum industry will focus primarily on receiving information from stakeholders Based on this listen first approach the industry will gain a better understanding of any issues or concerns thus the industry will be in a better position to respond accordingly Develop partnerships The Oil Can will not be the sole responsibility of one organization or entity Instead the program will be open to any and all organizations in the petroleum industry who seek to build positive working relationships with key stakeholders and the general public

    Original URL path: http://www.ndoil.org/oil_can_2/aboutoilcan/ (2016-05-01)
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  • North Dakota Petroleum Council - FAQ
    Properties Members Become a Member Committee Sign Up Oil PAC News Clipping Service Legislative Action Center Buyer s Guide Buyer s Guide Home Oil Can FAQ Frequently Asked Questions FAQs Ask the Experts video footage of industry and state professionals answering commonly asked industry related questions Click on a topic below or use the search bar at the bottom to find answers to your petroleum industry questions Surface Owner Questions These questions are related to the surface owner of the land being drilled on Mineral Owner Questions These questions are related to the owner of the minerals in which the oil comes from Regulatory Questions These questions are related to legal regulations involved with the different aspects of drilling a well in North Dakota Bakken Basics These questions are related to the Bakken formation and the process behind drilling in the Bakken Royalties and Tax Questions These questions are related to tax distribution of North Dakota s oil and gas tax revenues as well as royalties paid owners Oil and Gas Production These questions are related to oil and gas production in the state of North Dakota Roads Pipelines and Electrical Transmission Questions These questions are related to North Dakota

    Original URL path: http://www.ndoil.org/oil_can_2/faq/ (2016-05-01)
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  • North Dakota Petroleum Council - Royalty Owner Information Center
    to prove up their title Frequently a mineral owner s lessee or the operator of a well will help a mineral owner in determining what steps are necessary but unless there is some other agreement the mineral owner is generally responsible for curing title problems that affect that owner s title This process of curing title can take some time to complete Usually royalty payments are suspended or held back until the title problem is cured 4 What happens when a well starts producing After a well starts producing the operator determines who is entitled to production payments from the well Usually the operator will obtain a division order title opinion from an attorney that spells out who owns the production Such an opinion is based on the drilling title opinion but contains greater detail on who is entitled to be paid for production from the well and what curative may be required for any title problems Sometimes a company will prepare its own division order without waiting for a division order title opinion but this generally depends upon the complexity of the title and the resources available to the company Depending upon the complexity of the title and the ability to hire a qualified attorney to prepare a division order title opinion this process can take some time to complete After the ownership of the production is determined a division order is prepared A division order is an instrument executed by the operator the royalty owners and any other person having an interest in the production directing the purchaser of oil or gas to pay for the products taken in the proportions set out in the division order Under North Dakota law royalty payments may not be withheld simply because a royalty owner has not signed a division order and a division order may not alter or amend the terms of the lease However in many cases signing a division order may be one easy way of curing a title problem In those cases signing a division order may result in the payment of royalties that otherwise would be suspended While a division order is binding after it is signed it can be revoked at any time The company paying royalties will need the social security number or tax identification number of the person being paid royalties If such a number is not provided Federal law requires a substantial tax withholding to be made Depending upon the circumstances and the agreements between the relevant parties royalties may be paid by the purchaser of oil and gas by the operator of a well or by each individual lessee included in a well To determine who is responsible for the actual payment of royalties you should contact your lessee 5 When are royalties paid The payor usually tries to begin payment of royalties as soon as the ownership of the royalties is determined Although every company may have slightly different practices royalties are usually disbursed monthly and checks are written and

    Original URL path: http://www.ndoil.org/oil_can_2/royalty_owner_information_center/ (2016-05-01)
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  • North Dakota Petroleum Council - Surface Owner Information Center
    or a photo copy must be carried at all times by a member of the crew during the period of geophysical exploration and must be shown if requested by the landowner or tenant operator or county or state official The permit holder shall notify the county auditor or the auditor s designee at least 24 hours excluding Saturdays and holidays before beginning geophysical exploration Notice must include the approximate schedule and location of the planned activity 3 What do North Dakota laws say regarding measurement and payment of surface damages for seismic and or oil and gas drilling operations Although notice requirements for seismic and oil and gas drilling operations are different the measure of any damages and compensation to the surface owner for such activities are both governed under the Oil and Gas Production Damages Act in Chapter 38 11 1 of the North Dakota Century Code specifically Section 38 11 1 04 This statute requires that the operator pay the surface owner for the loss of agricultural production and income lost land value lost use of and access to the surface owner s land and lost value of improvements caused by drilling operations The statute does not provide a specific formula for reaching an agreement on appropriate compensation recognizing that 1 land values vary throughout the state 2 land uses range from irrigated property to dry land farming to pasture land 3 land has varying income producing potential and 4 land has other unique factors However the statute provides that the amount of damages may be determined by any formula mutually agreeable between the surface owner and the mineral developer For reference a summary of Section 38 11 1 04 addressing compensation to the surface owner is presented below The mineral developer shall pay the surface owner a sum equal to the amount of damages sustained by the surface owner and the surface owner s tenant for loss of agricultural production and income lost land value lost use of and access to the surface owner s land and lost value of improvements caused by drilling operations The amount of damages may be determined by any formula agreed upon by the surface owner and mineral developer When determining damages consideration must be given to the period of time during which the loss occurs and the surface owner may elect to be paid in annual installments over time However the surface owner must be compensated for harm caused by exploration only by a single sum payment The payments contemplated by this section only cover land directly affected by drilling operations Payments are intended to compensate the surface owner for damage and disruption any reservation or assignment of such compensation apart from the surface estate except to a tenant of the surface estate is prohibited In the absence of an agreement between the surface owner and a tenant as to the division of compensation payable under this section the tenant is entitled to recover from the surface owner that portion of the compensation attributable to the tenant s share of the damages sustained 4 Is there a way to compare the value of an offer of surface damage payment with other land value estimates There are two generally available reports that are updated regularly and provide valuation data relevant to surface owners They are presented here for reference Please note that there are other sources of information for determining fair land value including local real estate brokers and appraisers Surface owners are advised to consider several sources of information as they consider offers of compensation for surface use The North Dakota Farm Business Management Report is compiled by North Dakota regional colleges and provides surface valuation data based on detailed farm records by region and by crop Follow this link to the home page and scroll down to 2008 Region 4 Summary The USDA North Dakota Annual Report is a more general analysis based on an annual survey of farmers and ranchers that lists land values and cash rent values on a county by county basis 5 Why are my payments from the oil and gas operator for use of my land different from the payments others have received from wind turbine operators and cellular telephone companies Under North Dakota law the oil and gas beneath the surface of the land are separate property that can be sold or leased separate from the surface As noted above land can be sold with the oil and gas mineral acreage severed from the surface acreage When the minerals are severed from the surface a decision by the North Dakota Supreme Court recognized this relationship by stating that the owner of the minerals has inherent surface rights to find and develop the minerals which rights must and do involve the surface state See Hunt Oil Company v Kerbaugh 283 N W 2d 131 135 N D 1979 In other words when someone buys or leases the mineral rights to a piece of land they also buy or lease the right to access those minerals from the surface in order to drill a well to extract the minerals Companies constructing wind turbines and cellular towers do not have the same legal rights because unlike the owners of mineral rights they do not own any property and do not have a legal right to access and use the surface Instead wind turbine operators and cellular telephone companies must buy a usage right from the surface owner to access and use the land for their wind towers and cellular towers And while oil and gas operators who own or lease mineral acreage have the right to access and use the land state law does protect the surface owner Since 1979 North Dakota law has required that oil and gas operators pay the surface owner for damages to crops and certain other losses caused by oil and gas operations that necessarily take place on the surface The amount the oil and gas operator must pay to the surface owner is based on the amount of actual loss that the surface owner faces as a result of the oil and gas operations See above for a reference to common acreage values based on actual agricultural usages In contrast the amount offered by wind turbine and cellular telephone companies is not based on any actual losses suffered by the surface owner In addition to the working acreage the wind and cell phone companies also must purchase an easement from the surface owner in order to access and use the land A surface owner is free to negotiate whatever price he sees as fair when selling an easement and the wind and cell phone company is free to accept or reject an offer based on what it finds fair and reasonable Often the surface owner can negotiate payments from wind and cell phone companies that are greater than any actual losses caused by the wind turbine or cell tower because the payments not only compensate for losses but also for the purchase an easement necessary for the wind or cell phone company to access to the land 6 How is the location of a well determined and what are the regulations Companies that hold mineral rights to a parcel of land evaluate the prospect of new well development based on several factors including favorable geology manageable investment risk and a reasonable expected return on that investment Once a decision to proceed has been made the surface location of the well is determined by a number of factors including To prevent drainage of oil or gas from adjoining lands and to protect correlative rights the North Dakota Industrial Commission NDIC has established drilling and spacing rules that must be complied with for every well drilled See NDCC 43 02 03 18 The NDIC spacing rules set out the minimum distance that well bore must be located from the drilling spacing unit boundaries Here s an example for a 1280 acre spaced horizontal well the wellbore is normally located 500 feet from the north south spacing unit boundaries and 1220 feet from the east west boundary Standard spacing units are 80 acres 160 acres 640 acres one square mile or 1280 acres depending on the depth and length of the horizontal lateral Units normally follow government surveyed section lines Given the NDIC spacing unit and minimum distance that the wellbore can be located from the spacing unit boundary the drilling company has a defined area within which to find a place for the surface location of the well With horizontal wells there is some flexibility for the surface location Vertical wells on the other hand must be located directly above the target geologic structure for the well to produce most effectively Depending on the type of well to be developed an average area required during the drilling and completion phase is four to six acres of land That area can then reduced back to about two to three acres once the well is put on production also see question number 6 below Finally the NDIC requires that the wellhead location is not within 500 feet from any occupied building 7 How is the location of a well access road determined Once the surface location of the well is determined then a route is designed for the access road based on several factors including Placement of the access road ideally follows the shortest most direct route possible from the existing public road system to the well location to minimize the amount of surface disturbance If there are existing roads or trails that can be used to access the well site they will be utilized whenever practical and possible Where the well access road is to intersect with the public road consideration must be given to the line of site distance and vehicle speed from hills and curves for safety reasons The width grade and radius of the curves on the access road must be considered to allow for safe travel for large trucks and equipment on the access road With the factors noted above the operator will try to work with the surface owner to reach a reasonable agreement on an acceptable route for the access road 8 How much surface land is typically needed for drilling and production operations Acres needed for drilling operations The number of acres needed for drilling operations are dependent on several factors Those factors include size of the rig needed to reach the target geologic formation depth size of the stimulation completion technique economic factors operational feasibility spacing rules natural resource concerns and safety considerations The size of a typical single well pad for a Bakken horizontal well is approximately 4 6 acres This pad size will accommodate a 1 000 to 1 500 horsepower rig and its accompanying support equipment Typically the support equipment includes drilling mud tanks a reserve pit and trailers for rig and company personnel For a multiple well pad several wells drilled from one pad the acreage required is approximately 5 7 acres to allow for additional well heads and tanks Reserve pits are generally used for storage or disposal of water drilling mud and geologic cuttings during drilling operations Many operators in North Dakota now use a closed loop drilling system that uses portable storage tanks to handle the drilling fluids reducing the size of the reserve pit Acres needed for completion operations Completion of the well involves stimulating the well bore typically through hydraulic fracturing technology Typical equipment needed to frac a well requires the entire 4 6 acres of a well pad and includes high pressure pumps sand storage tanks water storage tanks and fuel tanks for the pump engines Acres needed for production operations Once a well is producing the surface footprint can be reduced by approximately 25 depending on actual site conditions and the operator s future plans for the site such as additional drilling The location size must still accommodate oil storage tanks air emissions equipment pipeline equipment if available and allow for oil and water hauling trucks Productive wells periodically require maintenance and workover operations that require access for the smaller workover rigs and supporting equipment on the site 9 What sequence of events is typical for developing an oil or gas well from beginning to end What can I expect regarding notice surveying construction post production A company will begin the process of building a new well location by hiring a licensed surveyor to identify the boundary of the construction area A representative of the company or the surveyor contacts the surface owner to schedule the survey and to provide general information about the well pad location and access road If the surface owner is not present when the location is outlined or staked the company rep will explain where staked well is located and why The surface owner after reviewing the proposal is asked to approve the well pad location and the access road The staking of a proposed well pad and access road location includes Survey stakes are placed at the four corners of the pad A stake is also placed at the center of the pad The location of the proposed well head is also marked or staked If an access road is required center line stakes are placed that indicate where the road will be located At this point a Surface Use Agreement SUA is typically negotiated between the company s Land Department or its representative such as a land broker and the surface owner of record The SUA is a private contract between two parties and it can vary from operator to operator and between surface owners The SUA typically provides information such as the conceptual design of the well pad and access road requirements an agreement for land disturbances and payment for damages or lost value of the land In some cases an SUA can be a very detailed agreement that includes other issues such as safety and environmental concerns use of easements electrical and power requirements reclamation goals and other provisions Requirements for the company regarding its responsibilities in reaching an agreement with the surface owner can be found in Chapter 38 of the North Dakota Code see questions 1 3 above Once the SUA is in place and a staked well location is approved the notice of drilling operations is sent to the surface owner and operations begin The NDIC requires a notice be provided to surface owners at least 20 days before beginning operations The notice can be waived if both parties agree to begin operations sooner or if regulations or an expiring lease require the well to be spudded sooner see questions 1 3 above Construction of the well pad and access road occur before the drill rig can be moved onto the location Construction of the well pad and access road can take as little as one week or as many as several weeks depending on the season weather conditions and work needed to create well pad that is level and stable After the well is drilled and completed the footprint of the well pad can be slightly reduced depending on topography and future plans for the location Where practical and allowed an operator might consider locating more than one well on a pad As a result the size of the production pad might not be reduced if the operator intends to drill additional wells Once the well is no longer producing and the operator declares the well to be plugged and abandoned the disturbed area of the well pad will be reclaimed to the approximate original condition or as agreed between the operator and surface owner After final reclamation the operator s bond is released if NDIC finds that the reclamation objectives have been met and the work is approved 10 Once a drill rig shows up how long does drilling and completion take How long will the well continue to produce Drilling In the past wells were drilled as nearly vertical as was feasible However today s technology has advanced to the point that directional drilling to a target thousands of feet laterally away from the surface location of the rig is common practice Directional drilling is an important enabling technology for development of the Bakken formation and a horizontal well is the ultimate directional well From the surface the well is drilled vertically for up to 2 miles or more until the target formation is approached Then the drill bit is diverted until it is moving horizontally and kept within the upper and lower boundaries of the formation for as much as 1 to 2 miles There are a number of factors that can impact the amount of time required for drilling a horizontal well but typically a Bakken well can be drilled in 15 to 30 days As the industry gains experience and knowledge the length of time for drilling decreases Completion After the drill rig has reached total vertical and horizontal depth and the well bore is lined and sealed to prevent contact with its surroundings the rig is released disassembled and moved off site Completion operations can then begin Actual start of completions however are dependent on crew availability weather conditions materials inventories and other logistical considerations It s not unusual for example of delays of up to 6 months after drilling for completions to commence Once a completion crew and equipment is on location a typical completion takes approximately 30 days Those 30 days typically consist of the following operations Equipment mobilization and set up 7 days Service rig work 3 days Hydraulic fracture 5 days of 24 hour day operation Initial production and well flow back 3 days of 24 hour day operation Frac plug drill out 4 days of 24 hour day operation Install production equipment including tank batteries pump jack controllers and power connections 4 days Production Once a well is producing its operation is regular and routine Traffic to and from the well

    Original URL path: http://www.ndoil.org/oil_can_2/surface_owner_info_center/ (2016-05-01)
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  • North Dakota Petroleum Council - ProgressZone
    the use of multiple methods and mediums to build public awareness including billboards newspapers and broadcast outlets Ron Ness president of the North Dakota Petroleum Council NDPC says the ProgressZone campaign helps re enforce the message that oil country is a work in progress Many improvements in oil country are planned over the next few years says Ness With the help from the State s new budget and other sources of revenue oil country will undergo major reconstruction including road repairs and infrastructure improvements additional gas plants and more pipelines The State s 2011 2013 executive budget proposal plans to spend a total of 371 million from the Permanent Oil Tax Trust Fund for state county and township road construction and maintenance in the 17 oil producing counties Additionally the oil industry has made tremendous improvements to help ease traffic risks for everyone Recent investment in pipelines and the Stanley Rail System have allowed for a more effective means of transporting the oil thus reducing the number of semi trailers on the roadways To help educate drivers and keep motorists safe the ProgressZone campaign will focus on the following key messages Pass with Caution Be Patient Slow Down Roads Shared Lives Spared and Buckle Up Every Time Safety of the traveling public is the number one priority of this campaign By following these tips many crashes can be prevented and lives can be saved says Francis Ziegler director of the North Dakota Department of Transportation Drivers may not be accustomed to the higher traffic volumes experienced in western North Dakota and the ProgressZone campaign asks all drivers to be patient and share the road While the expanding oil industry has produced many beneficial results an increase in traffic especially heavy truck traffic has contributed to a number of crashes some

    Original URL path: http://www.ndoil.org/oil_can_2/progresszone/ (2016-05-01)
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  • North Dakota Petroleum Council - Pick Up the Patch!
    the community to help keep our communities and roadways clean with huge community wide events Adopt a Highway programs or just by stopping to pick up trash as needed The Program also encourages companies to create a no litter culture by Including trash disposal in employee training Making a staff person responsible for cleaning work areas Reminding crew not to litter during daily briefings and include trash bags in company vehicles Taking part in statewide efforts like Adopt A Highway and Keep North Dakota Clean Working with local communities Launched in April 2012 the program has been a great success Thousands of miles of roadways have been cleaned and the program won a Chairman s Stewardship Environmental Partnership Award from the Interstate Oil and Gas Compact Commission in 2013 We remain committed to helping keep our communities and roadways clean and we urge you to join us 2016 Scheduled Events Click here for a list of scheduled Pick Up the Patch or associated clean up events Does your community have a clean up day scheduled for 2015 and you would like some help Email Alexis at abrinkman ndoil org and we ll help spread the word Are you a company

    Original URL path: http://www.ndoil.org/oil_can_2/pickupthepatch/ (2016-05-01)
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  • North Dakota Petroleum Council - Easement Information Center
    the Northwest Landowners Association and Dunn County Landowners Association Over the course of several months the task force identified lack of information and unclear communication as one of the roadblocks between landowners and companies looking to obtain easements With that in mind this page and the following documents were created This information is intended to serve as background and a starting point for landowners entering the easement process In another effort to facilitate communication between industry and landowners we ll be working to create a easement resource liason in each county Resources Easements 101 Easement and Pipeline FAQ Land Agent Code of Conduct This code of conduct has been provided to North Dakota Petroleum Council member companies and is what a landowner should expect when working with a land agent Summary of the Project Scope This document has been provided to North Dakota Petroleum Council members and should accompany an easement offering As a landowner please feel free to print this document and use it to gather essential information on the proposed project Pipeline Company Contact Information Contact information should accompany any easement offering or contract but we understand that this information may be lost or change over time In

    Original URL path: http://www.ndoil.org/oil_can_2/easementinfocenter/ (2016-05-01)
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  • North Dakota Petroleum Council - Mediation Service
    of expensive and time consuming litigation The mediator appointed by the NDMS is a neutral and impartial third party with extensive experience in the mediation process The mediation process cannot begin until both parties have consented Trained in problem solving techniques the mediator helps create an environment in which the disagreeing parties can resolve their differences Participating in voluntary mediation does not waive either parties rights under the North Dakota Oil and Gas Production Compensation Act including the operator s right to access the surface estate upon complying with the terms and provisions of Section 38 11 1 05 20 days written notice to surface owner offer of settlement damages et al The NDMS has posted an 84 percent agreement rate on agricultural issues during the past five years The cost of this mediation program is minimal If your company does encounter a dispute with a surface owner you may want to consider this alternative dispute resolution process For further information on the program please contact the North Dakota Department of Agriculture at 701 328 4158 You can also visit www nd gov ndda program mediation services to learn more about this service How does the process work 1 Any party eligible for mediation may request services from the administrator of the NDMS The request must be made in writing and should contain contact information for the party with whom mediation is being requested opposing party 2 Upon receipt of a request for mediation the NDMS will contact the opposing party and inform them of the mediation request 3 If the opposing party declines to participate in mediation the requesting party will be notified in writing of their decision 4 If the opposing party agrees to participate in mediation the NDMS will assign a mediator 5 The mediator shall manage

    Original URL path: http://www.ndoil.org/resources/nd_mediation_service/ (2016-05-01)
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