Jump to content



Photo
royalties richest 100 u.s. counties mineral rights

  • Please log in to reply
7 replies to this topic

#1 Hum

Hum

    totally wAcKed

  • 63,015 posts
  • Joined: 05-October 03
  • Location: Odder Space
  • OS: Windows XP, 7

Posted 04 October 2012 - 13:29

STANLEY, North Dakota (Reuters) - The retired men shooting the breeze at Joyce's Cafe in Stanley don't look like oil barons but appearances can be deceptive, especially in North Dakota.

Take Robert Western, a farmer who was dressed in rumpled overalls and a baseball cap as he sipped coffee and discussed the oil boom that has transformed this once sleepy town.

"Some of the younger people buy a lot more - machinery, vehicles, things like that," said the 75-year-old Western. "The rest of us, I guess it doesn't alter our lifestyle a great deal. I don't have a lot of needs."

After he left, his friend Earl Rogstad remarked to a visitor: "It's too bad Robert didn't have his airplane ready... He offered last summer to fly me over and see (the oil wells) from the air."

Western did not mention that he is co-owner of a Piper single engine propeller plane, according to FAA records. He did admit to receiving oil royalties from wells on his farm but locals said he is far from the richest man in town. It is not clear whether Western is a millionaire or merely wealthy.

"You can't tell the average Joe farmer from the average Joe millionaire," said Ward Heidbreder, Stanley city coordinator.

Average income in Mountrail County, the hub of the North Dakota oil production boom, roughly doubled in five years to $52,027 per person in 2010, ranking it in the richest 100 U.S. counties on that basis including New York City, and Marin, California.

The boom could be creating up to 2,000 millionaires a year in North Dakota, said Bruce Gjovig, founder of the Center for Innovation at the University of North Dakota.

Many oil region residents receive $50,000 or $60,000 a month in oil royalties and some more than $100,000, said David Unkenholz, a senior trust officer at First International Bank & Trust in Watford City, the seat of McKenzie County, which is the No. 2 oil producing county in the state behind Mountrail.

The oil is so plentiful that in Stanley, where the population has about doubled to 3,200 in the last five years, a well drilled under the town means that many homeowners could receive a small oil royalty check.

A lot of North Dakota's new wealthy simply stash the cash in savings and checking accounts with "ridiculously large" balances, banker Unkenholz said.

The monster homes, ostentatious diamond rings or luxury sports cars of California and New York are virtually nonexistent in North Dakota. Looking for wealth here is a subtle exercise.

Locals point to pickup trucks. The boom has boosted truck sales decked out with extras at Stanley's Ford dealer, Prairie Motors Inc, co-owner Gary Evans said.

"They are a lot more elaborate, a lot more loaded up than what they used to be, even the accessories," Evans said. "There is a big demand for accessorizing a pickup truck - everything from running boards to grill guards to chrome wheels."

Evans, 66, a part owner of the dealership since 1970 and manager of the services business, said most residents have not changed their buying habits, especially those over 50.

"Some of these people you could look at and you don't even know if they have an oil well or not, and they may have several," said Evans, who grew up on a family farm west of Stanley and also has some mineral acres.

One reason rich locals do not brag about their money is because some residents do not own precious mineral rights to the land and have missed out on the boom. Land and mineral rights can be separated and sold in North Dakota and often are.

Royalties are paid based on oil produced and sold mainly in sections of land of one or two square miles in size. The owner of the mineral rights receives the royalties. It can be a complex exercise to divide rights among multiple land heirs.

In simple terms, a well producing 100 barrels of oil per day sold at $80 a barrel would generate $248,000 in a 31-day month. The state collects taxes on extraction and production of about 11.5 percent. From there, if the rights holders have one-fifth royalties, they would receive $43,896 a month.

more


#2 Growled

Growled

    Neowinian Senior

  • 41,508 posts
  • Joined: 17-December 08
  • Location: USA

Posted 05 October 2012 - 00:30

Nothing worse than redneck millionaires. At least act the part. :D

#3 Secular Humanist

Secular Humanist

    Neowinian Senior

  • 3,799 posts
  • Joined: 17-June 09

Posted 05 October 2012 - 00:43

Not sure how it works here since i have never been part of that side of things, we have 25 or so wells on our 2000 acres here but DO NOT own mineral rights. I have been told we lost those in the 50's. I doubt that's as simple as that but damn, for that kind of money i should be looking into a bit more instead of my grandparents who don't really double check legal things too much.

#4 Growled

Growled

    Neowinian Senior

  • 41,508 posts
  • Joined: 17-December 08
  • Location: USA

Posted 05 October 2012 - 00:51

I know several of the older people in our community that sold their mineral rights in the 50's and 60's. Apparently some speculator bought them just in case.

#5 Raa

Raa

    Resident president

  • 12,863 posts
  • Joined: 03-April 02
  • Location: NSW, Australia

Posted 05 October 2012 - 00:51

Geez, I wish I had a couple of square meters of land there! :/

#6 OP Hum

Hum

    totally wAcKed

  • 63,015 posts
  • Joined: 05-October 03
  • Location: Odder Space
  • OS: Windows XP, 7

Posted 05 October 2012 - 13:15

Nothing worse than redneck millionaires. At least act the part. :D


"Come and listen to a story about a man named Jed

Poor moutaineer, barely kept his family fed

Then one day he was shooting at some food

And up from the ground came bubbling crude ...

Oil that is, Texas tea ...." :laugh:

#7 bobbyJJ

bobbyJJ

    Resident One Post Wonder

  • 1 posts
  • Joined: 11-January 13

Posted 11 January 2013 - 22:20

That's a pretty good article, but the reality of the boom in ND is not all rosy. Lots of folks are getting left out of the money side, while still dealing with all the new residents, trucks, and high cost of living. Not to mention, these are areas that are traditionally quite rural, and are now exploding. That's not likely to change any time soon.

Here's an interesting post about it. Check the comments after the post too.

http://www.bakkendis...s-energy-future

#8 Growled

Growled

    Neowinian Senior

  • 41,508 posts
  • Joined: 17-December 08
  • Location: USA

Posted 12 January 2013 - 04:53

Thanks for the update. Like everything else, a few get rich and everyone else barely gets by.