I am negotiating a lease bonus with Danick Resources. This is a new drilling company (2013). His reason for not going up from the original $150/acre was the Indian Nation Clause. I have never heard of this and can’t find any info when I google it. Has anyone had experience with this? Has anyone had experience dealing with Danick?
Ruth,
Are you sure he said Indian Nation Clause? Their is a Nations Clause that people and oil companies put in leases at all times and this may have been started with the Indians, Don't know for sure.
This is the definition of that. He may be trying to say, his company is only going to treat everyone the same and only paid $150.
What is a “most favored nations” clause?
According to Black’s Law Dictionary, a most favored nations clause is defined as “a clause in an agreement between two nations providing that each will treat the other as well as it treats any other nation that is given preferential treatment.” These types of clauses have been used in various types of contracts, including those in the oil and gas industry. Essentially, the clause ensures that a mineral lessor will receive equal treatment to other lessors entering into similar lease agreements with the same lessee. Generally, these clause provide that if the lessee enters into a lease with another party within a certain timeframe and a specified distance or tract, and the new lease contains more favorable terms than the first lease, those terms will also be granted to the first lessor.
I haven't dealt with Danick Resources, but they are in Dallas neat 635 & 75 (LBJ). I have seen several of their investments sheets and they look good. Usually they only lease in areas that have been proven and underdeveloped drilling acreage. Otto Harrison who was Exxon Petr. guy for years started the company, than passed away. Daniel Lane took over and is great getting investor together. I think we will see them on the stock market in the near future if the oil prices doesn't hurt them to bad.
so helpful. He did say Indian nation but must have meant what you referred to. Have you ever dealt with this & if so how?with this and, if so, how
Ruth,
I have 3 pages of Exhibit that I put in my leases and some of it does have Nation clauses. There are so many things a person has to look out for nowadays as the leases are wrote for the oil company only. Example, they want you to pay for transportation, accounting, etc . Take that out. I look at oil companies like snakes in the grass and try to figure out how to get the best deal and still be fair with the companies. I use a really good oil & gas attorney in OK City. I have been using him for about 10 years and he has always done a great job for me. I have had oil companies produce a well for 1 month out of the year, just to hold the lease to sell it and he was able to get me out of the lease. Then I was able to get a new lease and a nice bonus, plus someone who would produce a well.
I forgot where your minerals are in Woodward Co, but my husband leased for more than that in the SW part of the county.
Thanks so much, Virginia!
Virginia Pflum said:
Ruth,
Are you sure he said Indian Nation Clause? Their is a Nations Clause that people and oil companies put in leases at all times and this may have been started with the Indians, Don't know for sure.
This is the definition of that. He may be trying to say, his company is only going to treat everyone the same and only paid $150.
What is a “most favored nations” clause?
According to Black’s Law Dictionary, a most favored nations clause is defined as “a clause in an agreement between two nations providing that each will treat the other as well as it treats any other nation that is given preferential treatment.” These types of clauses have been used in various types of contracts, including those in the oil and gas industry. Essentially, the clause ensures that a mineral lessor will receive equal treatment to other lessors entering into similar lease agreements with the same lessee. Generally, these clause provide that if the lessee enters into a lease with another party within a certain timeframe and a specified distance or tract, and the new lease contains more favorable terms than the first lease, those terms will also be granted to the first lessor.
I haven't dealt with Danick Resources, but they are in Dallas neat 635 & 75 (LBJ). I have seen several of their investments sheets and they look good. Usually they only lease in areas that have been proven and underdeveloped drilling acreage. Otto Harrison who was Exxon Petr. guy for years started the company, than passed away. Daniel Lane took over and is great getting investor together. I think we will see them on the stock market in the near future if the oil prices doesn't hurt them to bad.