Hello, I’m a first-time poster. We are due a balance of $2,250/acre on a $3,000/acre top-lease contract on Apr. 15 and received call from leasing company that they can’t afford to make that given the low oil price (say they need $70/bbl to make the payment). They’re offering $500/acre to buy-out the lease, which I’m thinking means we will be released from the contract and free to seek a new lease. We have 160 acres with nearby drilling, an inheritance from our mom who inherited it from a Norwegian bachelor farmer who homesteaded it :-). We work with an atty in Watford City but I’d appreciate any thoughts you might share. Thanks!
Do you have a signed contract? If so, it's a question of contract compliance. Until I've been notified by a court that the company has filed bankruptcy, I'd expect full payment. I don't believe a word uttered by any of these characters. The oil business is the liquid version of a shady used car lot.
Yes, signed contract. Thanks, Alan.
I agree with Alan. Go for the complete amount. Do NOT let them "buy out" the lease without talking to an attorney. It may confuse things and nullify your first lease.