Hi everyone!
Brand new here and maybe an obvious question, but I’m having a hard time finding this information. We own rights on section 7 in Caddo (passed down to us) and I’m just trying to find out if all owners need to sign a lease (we got a very unfavorable lease offer from Carlisle) or if one person can go ahead and just sign without the others. Thanks in advance!
Welcome to the forum! When you say “all owners” are you referring to your spouse or other family members that also own mineral interest?
Generally, each family member is free to lease or not lease their own fractional interest. In other words one person’s decision to lease or not to lease will not adversely effect the remaining members.
This post is not legal, tax or investment advice. Reading or responding to this post does not create an attorney/client relationship.
There are other family members (4) that own percentages of the same tract (section 6 actually, not 7). One owner was told he should just sign and submit his lease to get the bonus (which he did without really reading it), and that it didn’t matter if the rest of us signed. We’re just trying to figure out if that makes it more difficult for the rest of us to negotiate the lease now, and if the company has the go-ahead to do what they want on the land, regardless of what the rest of us decide. If we can’t negotiate a lease with the company, is it my correct understanding that the company will move forward anyways because one person signed, and what happens with those of us who don’t sign? Thanks for any insight!
If you each own an interest you are free to sign separately. One mineral owners lease does not effect your lease. Sometimes a family negotiating together can give you a bit more negotiation power, but that usually depends on the area and amount of acreage. I often see different family members negotiate different terms on an oil and gas lease.
Every single mineral interest owner must be accounted for when a well is drilled. The mineral owner must either participate in the well or sign an oil and gas lease. If a mineral owner doesn’t participate or doesn’t sign an oil and gas lease, then the mineral owner can be force pooled.
Thanks Rachel…that does help clarify some. Appreciate the feedback!
What sort of terms did they offer
Hi Cole…the terms were $500/nma for a 3-year lease with a 2-year extension at $750. The lease contained several clauses, however, that seemed to be geared toward the company being able to sit on the land indefinitely in the case of a shut-in, paying royalties only after any and all expenses imaginable, free use of all land resources, and a few other questionable items. The biggest red flag for us though, was that we could not find any information on the company, Carlisle Court LLC. My sister and I sent an email addressing our concerns with some of the lease clauses and requesting information on the company. We received a very quick response that the company was no longer interested in leasing the section…even though they had taken a signed lease agreement from our father (who didn’t bother to read the lease, smh). Overall, I find this pretty suspect behavior and have STILL not found any information on Carlisle Court. If anything finds something to add in the way of information on this company or experience with them, please add it. Thanks to everyone for their help!
CCL, your lease description failed to list the most important item, namely the royalty. Too often owners focus on the one-time bonus payment. Seasoned owners know that a lease can and do last for decades, some even more than a century. You don’t get to renegotiate if oil is produced. Therefore, having strong lease provisions is vital.
This post is not legal, tax or investment advice. Reading or responding to this post does not create an attorney/client relationship.
You’re right, Richard…I meant to include that but forgot. It was 3/16th of the gross proceeds less severence and other excise taxes and cost and/or fees incurred by Lessee in making marketable Lessor’s share of gas, and/or in gathering, transporting, processing, compressing or otherwise marketing Lessors share of gas, but in no event more thatn 3/16th of the net amount actually received by the Lessee from any such party.
As I said, a lowball royalty offer with a pretty considerable list of expenses before royalty payment. Needless to say, we did not sign anything.
Thanks for asking!
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