As the topic states. How much stock do you put into who you lease out to when signing a lease? I have two similar offers. One a big oil company (continental) and the other a smaller land man who I think is working for northern oil. Both have very similar leases and offers.
Do you go with the big oil company or the smaller company/ landman ? I have quite of pros and cons for each. But biggest question would be if I don’t go with the big oil company could I ruin plans in the area that make it harder for them to drill? I have about 120 net acres in Roosevelt county Montana. But asking overall consensus about big oil vs little oil.
It depends upon the area. It is common to have many groups lease within a section as there are multiple working interest owners, but only one operator. The operator will have to abide by all of the leases. With certain operators, I can usually get better terms from the smaller company who may be easier to work with. Always wise to get a good oil and gas attorney to review any lease as the draft is rarely in the favor of the mineral owner and has quite a bit of room for improvement.
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Continental tends to drag its feet on payment of new leases.
Im still waiting, since May.
It is safer to not hand over a lease without getting paid. I send an email copy of the notarized lease with every page marked COPY DO NOT FILE in big black letters. This shows good faith on my part that the lease is signed and dated and being held for payment. My attorney or accountant third party holds the original signed lease until payment is received. Then they turn it over to the leasing agent. Instructions are clearly stated in a cover letter. I do not accept draft payment letters. That way a lease is not filed without payment.
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Do not EVER give your signed originals without payment first!
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I will not deal with any agent who tries to file the lease before paying me. If they try it, I ask if they are a Registered Petroleum Landman or Certified Petroleum Landman as ethics are important to me. (Compensation must be exchanged before I hand over a lease.) If they are not, then I ask for someone who is or go with a different company, Also, some agents will try to “threaten” with forced pooling. I happen to like forced pooling as it as some advantages. I frequently go with forced pooling if I cannot get a good lease with an operator.
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Question about this, after talking to one of the landmen today (and i assume it somewhat goes for both but only one said it out right) but they need to file the lease before payment can be released. If i put fat COPY DO NOT FILE on it is this going to suffice?
Question being is that when talking to this landman he said that continental is in
the area with equipment on the ground but they havent started drilling yet, he alluded to the spud date happening sooner rather than later and even as soon as next week. I try to take what they say with a grain of salt but he seemed more concerned about me not signing in time with anyone let alone just his company. So his salt hit a little bit harder in my book. And to add to the “legitimacy” of his claims, the landman from continental has said that they have been sending out notices to the people who haven’t leased yet to be a working interest or sign a lease or be sent into forced pooling, and this was happening a week ago, so my time table is shortening kind of quick and I am trying not to mis-step and ride the fine line.