Is my lease valid

Oil and Gas Leasing Help
21

I agree, either first production or effective date of original lease, otherwise why would they tell her, "We'll give you a bonus if you sign a back-dated lease?" Either way, they screwed up and are trying to cover their tracks. Here's something else I just thought of. Katy said "This property currently has vertical producing wells on site," so if the property on which Katy owns minerals is a DRILL-SITE tract, and her minerals were not properly leased, Katy could actually own PART OF THE WHOLE WELL! And if she sold her minerals or leased them she could be leaving alot of money on the table. Katy, please DO NOT sell your minerals and go talk to a BOARD-CERTIFIED oil-and-gas attorney immediately. You might be in line for a big windfall!

r w kennedy said:

Pete, I would almost gurantee that they wanted her to sign a lease backdated to first production, or to when her mother executed the lease that may not be valid. I believe that is the only "contract" at issue here.

22

Owning part of the well can have its problems. Katy, there can be huge expenses involved with owning the hole well. An oil and gas attorney is a good idea but I would find out the worth and whether or not I own any of it before I spend a dime. Been there, done that.

23

That's true, if it turns out that you are in essence a part owner of the well because your mineral interest was not properly leased before spudding, and the well turned out to be a dog, you might be on the hook for your pro-rata share of the expenses, although I doubt it, and I don't see how somebody could sue you successfully under those circumstances if you refused to pay. After all, you were never presented with a decision to participate in the well or not, and it IS YOUR LAND. If you were a joint venturer or non-consent owner, maybe.

But if the well was successful, you probably would be entitled to alot more money than you would be if you were a mere mineral owner who leased and definitely more than a mineral owner who SOLD her minerals. You probably can find out the production data on the well by going to the Web site for your state's agency that regulates the oil-and-gas business, or there are several persons on this forum who probably would look it up for you. If there has been or is "good" production on the well, then you probably are looking at a windfall. Bottom line: DO NOT sell the minerals OR sign the lease until you speak with an expert, preferably a board-certified oil-and-gas attorney.

24

Thank you for all the advice. I appreciate the time and effort put in to help me find answers. You have given me and my sis tons to process. Im going to put more thought into selling and then “if” ask for much more. I have sent away my big stack of papers to an attorney. Ill keep you’all posted on his response. Have a great weekend. Katy

25

The Independent wanting me to sell, is getting a little aggravating. He said that after his Title Search I own 36 acres. That should be inline with the Tax Assessor. Is a Title Search different from just calling the tax office?

26

A title search will determine how many net mineral acres (NMA) you have. If you own all the minerals on 100 acres, you have 100 NMA. If you own 1/4 of the minerals on 100 surface acres, you have 25 NMA, and so on. Only a close inspection of the relevant records in the public domain, including the deed records but also possibly probate and other court records, will reveal what minerals and/or royalties you actually own.

On the other hand, the Tax Assessor typically just keeps track of surface acres, not net mineral acres. There is absolutely no way that they could keep track of mineral ownership for every parcel in the county. So you could very well be comparing apples (mineral acres) to oranges (surface acres).

If there is a producing well associated with your minerals and if your state or local governments tax royalty production, the Tax Assessor might have NMA in their records, but I seriously doubt it, they usually have just a decimal interest and a dollar value for total production, against both of which they apply your various taxing entities' tax rates.

The point is that a title search and a check at the Tax Assessor's Office will not necessarily produce the same information. Don't get worried if they don't.

27

That makes sense, thanks. What is the chance the independent shares his Title search of my property with me? Or could I even trust it if he did? Cookie said that legitimate buyers should be forthcoming.

28

The chances are low that he would share that Title Runsheet with you, it all depends on whoever is paying him to do the work. Whether he's in-house or a field landman, he shouldn't release that information to you without getting permission from his employer or his client. After all, it's work product that somebody else paid for, it's up to them whether or not they let you see it. From my personal experience, in a slight majority of cases, when somebody asked me for a copy of their Title Runsheet my client consented, there were some instances in which they flat out refused and I didn't ask why. No, I would not trust it even if he did. In most cases, it would be correct, but in your case, where there could be some flim-flam going on, absolutely not I personally would not trust anything they put in front of me. IF you get a copy of it, I would take it to a third-party landman or title abstractor and seek their opinion.

29

Good to know. Thank you.

30

Katy, you are in the drivers seat in a sale. You could say that you require the runsheet before you would even consider selling. Tell them if there is no runsheet, that they should stop calling. That if they continue to call you will send them a registered letter telling them to stop and if the continue you will report them for harassment, at which point they will have alot harder time trying to buy your minerals and all of the time and expense up to now will be wasted. I can't stop people from trying to pull the wool over my eyes but nothing says I have to stand still for it or assist or give them a chance to do so. I don't go in for alot of this secret agent, land/oil company stuff. In my opinion we can drag it all out into the light of day and do business that benefits both parties or we can keep secrets and I will just keep what I have, which was what I was doing, when you called me! At the first sign of furtiveness, I am done with you. Frankly, I don't like doing business with anyones agent because they don't have the authority to give me what I want even if their employer would agree to what I want so I lose patience with them and the secret agent tripe.

I usually just tell them no. When they call back I tell them I'm glad they decided to give me what they want and when they say that is not why they are calling and they want me to reconsider, I say ok, take three seconds and say no again, hang up and put it out of my mind.

I have had some reasonable offers a little low but worth considering, but when they say they have to know by friday, I just tell them immediately the answer is no because it's too important a decision to rush. They say monday then and I say, still no. I find the use of such sales/buying tactics mildly insulting. If they insist that they really have to have the deal done by a certain time, I tell them no and don't call me again. I wouldn't want them to make liars out of themselves, and I don't want to do business with someone who tell lies. Who wants to, or thinks there will be a good result from doing business with someone who is ready to lie to you, and probably already has?

Look at it this way, you have minerals that someone wants, they hire a landman/company to obtain your minerals. If you tell them to go climb a tree, who is in trouble? If a landman/company repeatedly fails to get results, what do you think will happen? When the landman has to tell their boss or employer that the mineral owner refuses to talk to them anymore, who is in trouble here? The mineral owner is not the one in trouble. I wish every mineral owner would take a step back and objectively look at who you are talking to, the hired hand of those who want to buy what you have, they have the power to negotiate so you get less but not the power to give you more, even if their employer would agree! Why should you even talk to them other than to tell them to give their absolute best offer and you will decide yes or no, and if the answer is no, you never want to hear from them again. Your time has value too, the landman gets paid for his time, don't let them waste yours.

31

I have had people, two different ones in particular, tell me, literally, "Look, I frankly don't care if I lease these minerals to you or not. I don't need the money." To which I responded, "Must be nice." So I would go straight to my best offer, and in one of those cases it equalled the HIGHEST bonus and HIGHEST royalty that my client had ever paid to anybody in that county, but still less than what the mineral owner wanted, and he said, "No thanks." When I said, "But it's the best offer we have ever made to anybody in the whole county," he said, "Well, you're going to have to break the record some time." We never called him again.

I'm not saying you should adopt this attitude with your situation, after all neither of these two mineral owners got a dime for their intransigence. One of them is literally surrounded by successful, high producing, natural-gas units, and his property is the shape of an "S", so that tract of land probably will not be leased for another generation or more.

32

Pete, Katy already has wells, and is dealing with people who evidently want her to make an uninformed decision. I would immediately inform such people that I am investigating and going to seek other offers. Never let them think they will be the only game in town. I would rather not do business with people that want to try pressure tactics. I also think that where there is one company that would like to buy, there very well could be another company or even an individual. I wish mineral owners with more than 10 net acres would invest $1,000 to find out what they have in such a situation. I think often it could return $10,000. I know money is tight but it's pretty likely they aren't trying to buy from you to lose money and if you have a good idea of what you have I think it likely that you could negotiate another $100 per acre so you make your $1,000 back and maybe alot more. You might even learn that it was never in your best interest to sell at all. You never know until you look. But you do know right now that someone thinks they can make a goodly amount of money off it, and that alone warrants investigation.

33

Hello, I haven’t forgotten about y’all. Been damb sick. Found a good lawyer she is very familiar with Antero. Oil & gas is all she dose. going to negotiate with Antero like its a new lease. We will see what happens. The lawyer thinks Antero is in the wrong and once we call them on it, They “should” be eager to fix it. Wish me luck. I’ll post an up-date if anything settles. Hopefully soon. Could be a few months.

34

Good luck to you.