I recently read a thread about a bonus payment not paid and the lease was signed. Advice was to find out if it recorded and try to null the lease before the fact. This is what I was trying to avoid with Exterra. I want an escrow. I will pay for the escrow costs, just so I have the money before I release the papers. Now this poor guy has to figure out what to do and the advice ranged from hiring an attorney to recording a null on the lease or don't release papers until the money was paid. I had this issue back in 2009 with Exterra and I didn't sign, now we come to the same issue again with them telling me they will not do an escrow. I guess I will never come to an agreement with them if I cannot do an escrow.
Another troubling thing is if your lease if flipped several times, who pays you royalities? How would you know who to look to for payment.
What's with these landman and escrows? Show me the money and I will show you the papers. No, they want all papers signed and delivered to them. They have 90 days to pay and if not you have 30 days after it is due to file a protest. What's with that?
Waiting for papers from the landman with the offer that Exterra is making on behalf of Noble oil. Can't wait. Although I did tell them that the escrow situation may be a deal breaker with me.
Ms. Redmond, sincre you even offered to pay the escrow fees, I think that the lessees refusal to do business that way is an admission from them that they can't be trusted. I would say wait and document that you tried to lease in a manner that would give you some security, in case there is a force pooling hearing one day. Dealing with oil companies, you need to document. I recommend dealing with the potential lessees by mail and e-mail as phone calls are he said -she said unless you record them, check your state law if you intend to record calls. Not being leased beats having to sue lessors who do not pay.
thank you so much for the verification that I needed. They do not take any risk if I pay for the esrow. I even told them I would send them a copy of the signed lease. But the originals would stay in escrow until the money hit. I have e-mails from the first go round in 2009 when Exterra refused to do the escrow. Now they are back and still no dice. I am waiting for the new paperwork with the increase in percentage he offered and they had to correct a legal description. As for the bonus, I don't know what that will be but $500 per mineral acre was offered.
Once they get the lease in hand they have 90 days to pay you, during that time they can go bankrupt, out of business, etc. Oh, since he told me Noble oil was the one wanting the lease, I told him to make sure the lease is in Noble's name, not Exterra. We'll see what happens, but I am not going to jump into this even though my percentage of ownership of the minerals is very small. The rest of my family signed in 2009 for $65 per MA and 1/6 percentage. I didn't sign because of the way they did business, look how much my family left on the table. And what really fries me is that I asked my family to speak as one and let me negotiate. Pat on the head and "little old ladies know nothing about this complicated stuff, back to the kitchen for you". Thanks again for the response.
You sound like a good, smart business woman. Hang in there. Don't let them get the best of you. Shame on family members. The word is"No". Escrow or put a check in my hand. Period.
Everyone should remember "Your signed lease is delivered ONLY AFTER payment is in hand." If the leasing broker or oil company refuse that simply request you should refuse to lease with them.
As to using an escrow agent, Mr. Joyson many banks provide this service for a fee of about $30 to $50. If you're out west in "oil country" many, if not most, banks are familiar with providing this service.
Hi, here in Phoenix we have Noteworld. They handle transactions including collection of loan payments for a very reasonable fee. I believe they are Noteworld, I dealt with Mike Murphy there, don't know if he is still there but you can give him a call if you need a third party escrow. 602 296-1234 , 2700 N. Central Ave. Suite 400, Phoenix, AZ 85004. They look at your deal and decide if it is appropriate to handle. Mine was. I think the total cost for what I did was around $70.00. I sent them the originals and they had instructions to hang on to it until the payment was received. I gave them the amount Exterra was going to pay and then just waited. And waited. When it was obvious that Exterra was not going to send the money, I cancelled the escrow, and they sent me my paperwork back. I think the drill will be the same this time also. If this helps in a forced pooling situation, I am covered. Thanks all for your comments.
I wholeheartedly agree with you and everyone here! This just makes me crazy!! I would seriously, like to know how in the heck this got started anyway, but more importantly, I would like to see if any oil co. would hand me an executed document that I could record and potentially, hang them out to dry - if I chose to, without paying them first! We all know the answer to that one! They wouldn't and neither should we!
This is only good business sense to protect yourself.
As we all know, this would cloud the title, preventing you from leasing to any other company which, could end up costing you to lose out on a much better deal! Demanding this is not only unreasonable, but very slanted, to only one side, theirs!!
Ok, here is the history. I was told back in 2009 that no oil lease would go through escrow. Period. That, what I was asking was not how they did business in Weld County. I even hired a landman to look out for my interest and that of my brother and sister. He even said this is not customary. So.....all of my family signed with Exterra and yes eventually, they were paid. Leaving me looking like a jerk. Remember they would not back me and use one voice to negotiate 320 acres. Exterra did the title work and found all the cousins. Over the years, like 80 or 90, our family was asked to lease the land for oil. Our family (my grandparents etc) did. No oil. So when this hit, the cousins were not concerned that oil would be found. Whether or not oil would be found, was not my issue. As a real estate broker with 40 years experience in two states, I knew this was a land transaction, pure and simple. I don't do anything without an escrow being set up. So I was floored when my offer to open escrow on my poor little interest was refused. Flat out, no deal. So, I just let it lay. My relatives said 'whatever" and moved on. I am the loose cannon in the family. Now, if I told them that the last, written offer to me was $500. a mineral acre, plus 18.75% when they settled for $65.00, a MA, and 12%, they would be dumbfounded. Not to mention my Aunt, who doesn't have that many years left, could use the better offer. But they all signed. Then comes Exterra who tells me that EOG, who wanted the leases, flipped them over to Noble.. What a surprise. The fact that payment was made, does not influence me. Good on them. But I come from the real estate world where the money hits and the documents are handed over. And when they signed, no relative was at the debtor's prision doors. There was no urgency to do this, other than the history of over the years leases were given and expired. The way business has been done with landmen and oil companies may need to change to protect the mineral rights and land rights holders. Remember, you cannot manufacture more land. Another weakness is who do you look to when your lease if flipped? There needs to be notice that your lease has changed hands and to me, you need assurances that the party taking the lease is able to perform.
The part of the lease that says at the end of the term of the lease if there is a producing well, ....more technical terms (check your lease, it is standard boilerplate), they pay you $1.00 per acre and the lease cannot be terminated (check your lease).. I couldn't believe those terms. Who would do that? Then the collection of monies is a complicated matter. All of this in favor of the oil companies. Now I get that they put up the money for the drilling and all expenses related to the developement of the well. But from what I see they hold the mineral rights owners hostage for...ever.. rolling over the lease year after year with the original percentage etc. I read all the drilling permits and pending drilling permits in Weld County, and found leases from 1970 as being in effect as right to drill. Of course if the wells hit, everyone wins, but do they? The lease states that expenses are first before any monies are given. That's great. Who is in charge of the expenses. The oil companies. And anyone who has had a business knows expenses can be manipulated. They can expense that well down to zero, meaning no profits. In the meantime, I wait for Exterra to send me the new docs.. Or maybe not.. I did the first of the "Things not to do", by pissing him off regarding his e-mail address. Anyway, that is the story.
I can and have seen both sides of this coin. I am willing to do escrow , most are not. Here is the reason why most companies will not pay at signing. Because running mineral title is hands down 100 times harder than surface title. Another reason is so many mineral owners think that they own mInerals when they do not, Because someone years ago in their family had royalties then passed on and their family would convey them as minerals etc etc etc. And realistically when that happens,“& it happens alot, usually months down the road. How many mineral owners still have the cash in hand from the transaction? I would say , maybe 1.” and the rest of them declare bankruptcy or get sued, and then the oil company is the monster once again. So while I am for escrow when available to put the lessor at ease, will they want to keep it in escrow for as long as due diligence takes to clear title? “sandridges Kansas acreage for instance will take a firm three years” it is 367 pages on a cd." so honestly , the system works good. When dealing with a company who is reputable and has been around. I rarely hear of two things an oil company not paying a bonus," even if it takes longer than you would like, and mineral owners handing the bonus money back when it turns out they were a stranger to title. I am not really picking a side , just showing you a different view. Thanks
regina redmond said:
Ok, here is the history. I was told back in 2009 that no oil lease would go through escrow. Period. That, what I was asking was not how they did business in Weld County. I even hired a landman to look out for my interest and that of my brother and sister. He even said this is not customary. So…all of my family signed with Exterra and yes eventually, they were paid. Leaving me looking like a jerk. Remember they would not back me and use one voice to negotiate 320 acres. Exterra did the title work and found all the cousins. Over the years, like 80 or 90, our family was asked to lease the land for oil. Our family (my grandparents etc) did. No oil. So when this hit, the cousins were not concerned that oil would be found. Whether or not oil would be found, was not my issue. As a real estate broker with 40 years experience in two states, I knew this was a land transaction, pure and simple. I don’t do anything without an escrow being set up. So I was floored when my offer to open escrow on my poor little interest was refused. Flat out, no deal. So, I just let it lay. My relatives said 'whatever" and moved on. I am the loose cannon in the family. Now, if I told them that the last, written offer to me was $500. a mineral acre, plus 18.75% when they settled for $65.00, a MA, and 12%, they would be dumbfounded. Not to mention my Aunt, who doesn’t have that many years left, could use the better offer. But they all signed. Then comes Exterra who tells me that EOG, who wanted the leases, flipped them over to Noble… What a surprise. The fact that payment was made, does not influence me. Good on them. But I come from the real estate world where the money hits and the documents are handed over. And when they signed, no relative was at the debtor’s prision doors. There was no urgency to do this, other than the history of over the years leases were given and expired. The way business has been done with landmen and oil companies may need to change to protect the mineral rights and land rights holders. Remember, you cannot manufacture more land. Another weakness is who do you look to when your lease if flipped? There needs to be notice that your lease has changed hands and to me, you need assurances that the party taking the lease is able to perform.
The part of the lease that says at the end of the term of the lease if there is a producing well, …more technical terms (check your lease, it is standard boilerplate), they pay you $1.00 per acre and the lease cannot be terminated (check your lease)… I couldn’t believe those terms. Who would do that? Then the collection of monies is a complicated matter. All of this in favor of the oil companies. Now I get that they put up the money for the drilling and all expenses related to the developement of the well. But from what I see they hold the mineral rights owners hostage for…ever… rolling over the lease year after year with the original percentage etc. I read all the drilling permits and pending drilling permits in Weld County, and found leases from 1970 as being in effect as right to drill. Of course if the wells hit, everyone wins, but do they? The lease states that expenses are first before any monies are given. That’s great. Who is in charge of the expenses. The oil companies. And anyone who has had a business knows expenses can be manipulated. They can expense that well down to zero, meaning no profits. In the meantime, I wait for Exterra to send me the new docs… Or maybe not… I did the first of the “Things not to do”, by pissing him off regarding his e-mail address. Anyway, that is the story.
I can and have seen both sides of this coin. I am willing to do escrow , most are not. Here is the reason why most companies will not pay at signing. Because running mineral title is hands down 100 times harder than surface title. Another reason is so many mineral owners think that they own mInerals when they do not, Because someone years ago in their family had royalties then passed on and their family would convey them as minerals etc etc etc. And realistically when that happens,“& it happens alot, usually months down the road. How many mineral owners still have the cash in hand from the transaction? I would say , maybe 1.” and the rest of them declare bankruptcy or get sued, and then the oil company is the monster once again. So while I am for escrow when available to put the lessor at ease, will they want to keep it in escrow for as long as due diligence takes to clear title? “sandridges Kansas acreage for instance will take a firm three years” it is 367 pages on a cd." so honestly , the system works good. When dealing with a company who is reputable and has been around. I rarely hear of two things an oil company not paying a bonus," even if it takes longer than you would like, and mineral owners handing the bonus money back when it turns out they were a stranger to title. I am not really picking a side , just showing you a different view. Thanks
regina redmond said:
Ok, here is the history. I was told back in 2009 that no oil lease would go through escrow. Period. That, what I was asking was not how they did business in Weld County. I even hired a landman to look out for my interest and that of my brother and sister. He even said this is not customary. So…all of my family signed with Exterra and yes eventually, they were paid. Leaving me looking like a jerk. Remember they would not back me and use one voice to negotiate 320 acres. Exterra did the title work and found all the cousins. Over the years, like 80 or 90, our family was asked to lease the land for oil. Our family (my grandparents etc) did. No oil. So when this hit, the cousins were not concerned that oil would be found. Whether or not oil would be found, was not my issue. As a real estate broker with 40 years experience in two states, I knew this was a land transaction, pure and simple. I don’t do anything without an escrow being set up. So I was floored when my offer to open escrow on my poor little interest was refused. Flat out, no deal. So, I just let it lay. My relatives said 'whatever" and moved on. I am the loose cannon in the family. Now, if I told them that the last, written offer to me was $500. a mineral acre, plus 18.75% when they settled for $65.00, a MA, and 12%, they would be dumbfounded. Not to mention my Aunt, who doesn’t have that many years left, could use the better offer. But they all signed. Then comes Exterra who tells me that EOG, who wanted the leases, flipped them over to Noble… What a surprise. The fact that payment was made, does not influence me. Good on them. But I come from the real estate world where the money hits and the documents are handed over. And when they signed, no relative was at the debtor’s prision doors. There was no urgency to do this, other than the history of over the years leases were given and expired. The way business has been done with landmen and oil companies may need to change to protect the mineral rights and land rights holders. Remember, you cannot manufacture more land. Another weakness is who do you look to when your lease if flipped? There needs to be notice that your lease has changed hands and to me, you need assurances that the party taking the lease is able to perform.
The part of the lease that says at the end of the term of the lease if there is a producing well, …more technical terms (check your lease, it is standard boilerplate), they pay you $1.00 per acre and the lease cannot be terminated (check your lease)… I couldn’t believe those terms. Who would do that? Then the collection of monies is a complicated matter. All of this in favor of the oil companies. Now I get that they put up the money for the drilling and all expenses related to the developement of the well. But from what I see they hold the mineral rights owners hostage for…ever… rolling over the lease year after year with the original percentage etc. I read all the drilling permits and pending drilling permits in Weld County, and found leases from 1970 as being in effect as right to drill. Of course if the wells hit, everyone wins, but do they? The lease states that expenses are first before any monies are given. That’s great. Who is in charge of the expenses. The oil companies. And anyone who has had a business knows expenses can be manipulated. They can expense that well down to zero, meaning no profits. In the meantime, I wait for Exterra to send me the new docs… Or maybe not… I did the first of the “Things not to do”, by pissing him off regarding his e-mail address. Anyway, that is the story.
Thanks Tom. Exterra did all the title search in 2009, so they were satisfied as to owners. Yes, I did tell them I would hold the escrow open until they did their thing, in fact I think it was open for 90 days, but they refused to "do business that way". In, what I consider luring the family in, their first offer to each family member was way more than actually paid. In other words the big bucks were put on the table to get everyone's attention, then the splits began to happen as relatives were verified. Anyway, that number was reduced down considerably for each of them according to their percentage. And I think by that time, the papers were signed and delivered to them. There was a form that basically stated Exterra was authorized to correct, upon discovery, the amount offered. So that covered them from the original offer to what was actually paid out, but again the papers were already signed.
Correct me if I am incorrect but it sounds like they made a per acre offer on minerals of your family, "lets say 10 nma" and ant first lets say there were 2 owners but when title showed someone had passed possibly, the division of acres were less per individual and therefore the $ was reduced accordingly." Or they just flat out misrepresented the offer and handled the leasing unethically. But, if they did I just don't see them working for such respectable companies.
Ok, Exterra send me papers again. First, they put their name as Lessee. I asked for Noble because their landman said that was who hired them. Second, the percentage was not what I was offered and accepted. Third, they still had the original $500 per MA, when my research indicated offers made in the $1,000 range. So I am sitting on the papers. I did e-mail him to point out the percentage error. I want this to end. If I am forced pooled, I will go to Greeley or Denver and attend the meeting. I think the way business is done should be changed on many levels.
As far as I can determine, Exterra does not drill for oil, has no equipment to do so, does not have fixed assets to tap, etc. So why would I give a lease to them for drilling oil. I know they will flip it. Advice please
I am of the mind to do that. I don't get out of bed for $2300. and this guy knew what I wanted on the lease. I think he is setting me up for forced pooling. He did say he had to prove he made a reasonable offer. I asked my relatives if anyone else did not sign and the one who would know, said "no".. I was the only one. But Exterra indicated that others were out there. But the real topper for him would be for me to place the paperwork at Noteworld and have him pay them and they would release the paperwork. He has told me he will not do that. Fun and games.
Ms. Redmond, I hope you are corresponding through e-mail and letters. It cuts out alot of bullstuff, because they don't want to see what they said come up later. Do you have any documentation of what the lease was supposed to read ? If so, then you are building the case for lack of good faith. I hope you have it at least as e-mail. Some yahoos take phone negotiations as an opportunity to lie like rugs.
I have e-mails from him, after I pissed him off. The phone conversations,were just that, I told him I read the leases from 2011 and three sixteenths percentage were in the leases. He readily offered that. So in a negotiation, something offered quickly was something they were willing to "throw away". The other was the $500. MA offer, but I asked for more based on what I was reading. But, again, I am willing to go to Colorado to watch this process. I don't take lightly "this is how we have always done business". Well, times they change. I have the time, I have the wherewithall. Bring it on. Over my very small piece of 320 acres. I have to e-mail him with the changes to the lease. We'll see what his responses are in the next couple of days. Do you know what a "snipe" hunt is. I have a feeling Exterra sent this poor guy on a snipe hunt trying to get me to sign as the last piece of the puzzle. I did contact one relative who discounted my abilitiy to negotiate, and he now wants to know what is going on and what I am looking for and why I didn't sign. I told him I will not disclose to him what was offered until I finalize the deal, but I need to know if anyone out there did not sign. He indicated there may be one cousin who back in 2009, had attorneys looking at the deal. If I can connect with them, I can use some leverage and also find out what their attorneys said. For the rest of the relatives who jumped into this, well they are done.
Ms. Redmond, I'm glad you have something written. Anymore I think dealing with a landman on the telephone is for entertainment only. I believe that landmen are told how much to get the lease for and not how much their superiors are willing to agree to. The landman couldn't give you what you wanted even if his superiors would agree to it because he is not authorized to do so. Maybe you need to deal with someone higher up the food chain.