2 weeks ago we received an extension lease offer for $150/ac for 2 more years. Our current lease still has 1 1/2 years on it. We signed it and sent it in and they contacted me yesterday saying that now they don't want to do the extension lease and change it to a Top lease and only give 25% up front. I don't even think they have drilled yet on our lease. But I honestly don't think it is right to accept extension leases back and then come back and change it after the fact just so they don't have to give up all the money.
The words, crooked as a dogs hind leg come to mind. I think you should send them a letter to send back the lease extention you executed or send the money. I think you have placed yourself in a bind by sending the extention without having received payment. If it isn't enough money to make it worth your while to employ a lawyer, you face losing money if you do or potentially these people can cloud your title in the future and cause you to lose money then. Since they are not playing straight with you you could tell them that you will execute the top lease but only after they return your lease extention, after receiving your lease extention, then tell them you changed your mind. As mineral owners, we can't trust and send executed leases excetera to landmen, land companies, oil companies and trust them to pay or abide by the deal. If they will not send your extention back, possibly you could get a lawyer and record that the extention is void because of the second offer to toplease repudiated the original offer, but I am not a lawyer and you would need to ask one. I hope this helps.
When you spoke with them, did they acknowledge that they'd received the signed offer you sent back to them? I'd recommend you discuss with an attorney because there is a chance they are bound to honor the $150/ac offer. I definitely agree with RW Kennedy that you should look at the cost of employing a lawyer and consider it. I wouldn't recommend recording anything unless the company attempt to record whatever you've signed.
Yes the broker told me that they received our lease extensions when I called on Wednesday. Then he told me the Land manager from New Gulf changed and said they wanted the top leases. The broker told me he would send the extensions back to me but he would hold on to them for a few more days to see if New Gulf decides to go ahead with the extensions since he has received several extensions from others as well.
I'm going to give them a few days and then call him back. But I do honestly think that I will contact a lawyer to atleast see if I have anything to stand ground on or what they would suggest we do.
Ms. Tucker, I would suggest that you get the lease extention back. If New Gulf decided that they wanted to do the lease extention after all and you still approved, all you would have to do is send it back. I suppose waiting a few days wouldn't hurt but I wouldn't let it drag on more than 10 days, certainly not a month without a definite resolution. If New Gulf was woried about postage I would tell them I would send them a postage paid envelope already addressed. As I said, if they decide they still want the deal and you agree, you could always send it back. Good luck.
With an extension or top lease, they will still need to get your approval.
I'm not a fan on extending a 3 year lease after only 1/2 of the original lease has passed. I assume there is some question in their minds whether they plan to drill your acreage or not & by not giving them an extension, they will need to decide sooner rather than later. Consider writing a letter withdrawing your extension OR not accepting their top lease since you have signed an extension.
They told me New Gulf had made a mistake in requesting the lease extensions and instead meant top lease. That does not seem to make much sense, but I won't sign a lease extension when they haven't drilled during the lease period until I find out if there is another company interested in drilling. The lease payments are nothing compared ot the roayalties from a producing well and I want to see some production.
The lease extensions that were in before the 16th are being accepted by New Gulf. I agree I would like to see production as well. From what I have heard is that there has been drilling all around ours but not on ours as of yet.