Has anyone had any dealings with Firethorn Holdings? We have a small property with a shut-in but not plugged well, and they say their company specialized in breaking unproductive leases and paying a bonus for a new lease. The details of the new lease look OK, but this sort of thing is sailing in uncharted waters for me. Any help is greatly appreciated. Best, KW
What they are proposing is probably a top lease. That means that it will begin as soon as the other lease ends. Sounds innocuous, but they can be problematic.
If the well is shut in and you have been paid a shut in fee every year, then you are still held. If it has been more than a year, them you can request a release of lease. (Check your original lease as it may have a clause that allows 90 days plus a year or something similar).
Most companies that offer these deals will pay you something up front, then pay you the rest once the lease is broken. Some file that lease and then never pay the rest.
Personally, I will not do a top lease. Others like them. Pros and cons. Here is an article discussing the potential problems.
An Overview of Recurring and Related Issues Involving Top Leasing.pdf (210.2 KB)
Our family was contacted by them as well. At first we were apprehensive but after going through the entire process we found them very knowledgeable. Once they completed our section and we got paid we ended up sending them our inventory to see if there was any other sections that met their criteria. Firethorn called and told us we had two other sections they could help us on. They are currently doing those. Highly recommend!
Thanks, M Barnes. I’m leaning against it, as this approach is unfamiliar and we’re having some issues with terms of the new lease. Thank you as always for your insight and assistance.
Top leases can have some tricky clauses in them. One of the reasons I won’t do them.
Will they work to break your current lease without you signing the top lease? As in you won’t sign until the current lease is indeed broken/released, and you won’t be bound by any new lease terms until you sign? Doubt it, but just wanted to check.
Not sure it is a top lease; I’ll need to look at the amended paperwork. As I said, though, I’m probably turning thumbs down on this one.
I’m curious to hear if anyone but BOB1979 has personal experience with this company. Strange coincidence: the fellow from the company I spoke with on the phone was also a Bob F. Small world.