Hi gang, Been outa pocket for a few weeks here, trying to catch up... Hello Sykes and welcome. Not sure if you are aware that surface owners are not out in the cold with regard to compensation when a well goes in on their surface when they have no mineral assets underneath. They do indeed get paid, by the oil company, for the surface being used. They get a lump sum (I am unsure of the tax applied to t his situation - can someone backcheck me on that issue?), in the neighborhood of $6-8-10 thousand dollars (sometimes more, I have heard) for 2-5 acres initially, scaling back to 1-2 acres at the conclusion of drilling. AND they get that whether the well is dry or wet. Mineral owners get their lease monies. Then they don't get another drop until, and here is the big issue, IF, there is production. So, essentially, the surface owner is getting a 'sale equivalency value' of somewhere between 3-5K per acre. That is pretty darn big bucks for a coupla acres.. and I would say that is quite fair. When rural families decide whether or not to sell any or no mineral assets when they sell the surface, is used to be a non- issue. It has only become a hot issue since the recent (now and the 1980's boom) discoveries have made the nightly newscycle. I do not think that penalizing the mineral owners when the surface owner has been properly compensated would make good legislation. The surface owner does not get taxed for extraction, production, and income taxes on the production that comes from under his land. The surface owner are compensated. When there is no production, they are compensated more thoroughly, in the past, than the mineral owners who get a dry well, no well, or, oh yippy, a salt water disposal well. There is absolutely no way to tax 'theoretical production' on any fair and consistent basis. And until there is something available to and usable by a means accessible to the owners, such as oil, coal, gasoline, rubber, in the same manner that 'earth' is usable to the farmer, rancher, dairy farmer, horse rancher, etc., govt just cannot go there. It is not ND's place to look at my assets and adjudicate what they think it might be worth should it be reachable 'someday' by technologies that currently do not exist.. it is ND's purvue to adjudicate a fair and equitable, and repeatable basis, from which to assess tax basis. No one knows what the production 'can be' until it actually 'is'. If the surface owners were not getting paid a reasonable compensation to access nominal acreage, that would be another story. But, just because they live 'above' my assets, does not entitle them to any percentage thereof, not even from the tax base, that's just 'redistribution' .... ND also had best look to using their haul on supporting and maintaining the infrastructures that allow for the continued development of these resources. For ND to tax the mineral owner to give portions to non-mineral owners as consolation is not a sound economic move... Giving the non-entitled surface owner a piece of my mineral asset is just a variation of a version of 'eminent domain' - taking from an owner and giving it to another.... I do,however, agree that the state must make infrastructure support funds to counties in the 'adverse impact' zone in a prorated proportion. Without, let's say, hwy 22 from Dickinson to Stanley, how is the industry going to continue. There also needs to be some studies done as to the accidents rates since the new boom on those roads, and the mortality rates within those stats. I have heard that the accidents on that stretch have been on the rise drastically in the past two-three years. If this industry is to grow, the state must take that more seriously than tweaked surface owners....
Going back to the top of this string, there has to be a diligent and provable attempt to locate absent mineral owners, this is what landmen specialize in -- I'm sure there are some stories of people who have been able to take over mineral assets, but there are many, many more stories of long lost descendants being tracked down by landmen and companies to learn that they have fractional mineral shares that have come down through generations... and the state does mandate that the oil companies must place in trust any production proceeds that would go to un-found owners for x amount of time while the process works. One cannot just go to the courthouse and lay claim to any vacated minerals. Hey SweetbutCrude --- hey buddy - dja'miss me? Rufus On Oct 31, 3:07 pm, sykes <[EMAIL PROTECTED]> wrote: > Howdy, new poster to this blog. Great blog, been reading for months. > > Thought I'd toss this idea. ND gov't takes 11.5 percent off the top > (ignoring any initial drilling incentives). Maybe ND should consider > only taking 8 or 9 percent and give the actual surface owner the > remaining. It might not help when the surface owner is an out-of- > stater (such as myself), but it would help those folks who have 0 > percent interest of mineral acres. The gov't already is taking the > money from the other mineral owners, so it's only on the State of ND > to implement this. And this would help distribute mineral dollars into > the township that has earned it. If you want to be restrictive, ND > could deny any payment to surface owning cooperations and or out-of- > state owners. Or ND could reduce payment by amount the surface owner > receives in royalties. Chew on that. ;) > > On Oct 30, 3:20 pm, shamlet <[EMAIL PROTECTED]> wrote: > > > > > there would be an automatic problem with assessing tax on mineral ...- Hide > > quoted text - > > - Show quoted text - --~--~---------~--~----~------------~-------~--~----~ You received this message because you are subscribed to the Google Groups "Bakken Shale Discussion" group. To post to this group, send email to [email protected] To unsubscribe from this group, send email to [EMAIL PROTECTED] For more options, visit this group at http://groups.google.com/group/bakken-shale-discussion?hl=en -~----------~----~----~----~------~----~------~--~---
