My family owns 52 M/A in section 136 Block 13 in Reeves Co. which was leased last July for three years. Yesterday, I received a call from another company wanting to lease 10 M/A from my sister and me. It appears the entire 52 acres lease by first company included our 10 acres. What happens if we accept the offer to lease the 10 acres to company two ?
Why did you and your sister not sign a lease when the other family members did? Are you certain that you have the leasing rights to your minerals? Is Noble Oil company two? [Noble may be acquiring Clayton Williams Energy Inc. which my research indicates is company one.] I have no idea if this is a concern in your case, but you might ought to be aware anyway: http://www.mineralrightsforum.com/forum/topics/buyer-beware-offer-f...
If you lease the 10 acres, be sure to strike the Warranty Clause
Hi, James -
Be careful and forewarn your family to be, too. There are a number of slime ball companies out in The Permian sending out what looks like an Oil and Gas Lease (the normal kind you and your family would expect to receive) but what turn out to be Oil and Gas ROYALTY Leases. They are trying to lease the royalties reserved in your existing legitimate lease.
Whatever offers you receive from any company or individual, have it looked over by an experienced Oil and Gas Attorney. And never agree to anything, not even verbally, until you are absolutely positive you want to accept an offer.
Hope this helps -
Charles Emery Tooke III
Certified Professional Landman
Fort Worth, Texas
James,
Why take the risk of compromising your hold on future revenue from very valuable minerals? Read and understand the fine print in your lease. Every single word. The answer to your question may be found there. You can bet that the offerer knows what it says and means. Make them prove to you that the 10 acres is not under lease.
CWEI leased 52 acres from my mother under Duke Family LTD. Then I get a call from Primexx Energy wanting to lease our 10 acres. It sounds like these 10 acres are within the 52 acres CWEI never asked us to sign a lease. How would I go about researching this myself?
James -
Ask your Mother or whoever in your family that led negotiations with CWEI to contact the Landman they were in touch with and ask them what they think. Maybe when they leased from your Mother under Duke Family LTD, they missed 10 NMA that you and your sister own individually.
Otherwise, it may be that they are trying to lease your and your sister's 10 NMA out of the 52 NMA using one of the tricky Royalty Leasea I mentioned a few minutes ago. Trying to lease your future royalties from you.
Charles
Call Primexx and speak with a landman. Ask him to justify your ownership of the property given the circumstances you have provided. It might be that your mother or the administrator of Duke Family may have the power to lease your minerals without your approval. I stand to be corrected by more seasoned heads, but the Duke Family LTD to CWEI lease's description may read 52 acres but the signors could only lease their share of the tract. So CWEI might have made a mistake and overlooked you. You have not acknowledge the royalty lease subject as described in the link I provided and also mentioned by Mr. Tooke. Beware! Mr. Cotten's link to his article on the warranty clause is also a must read, imo.
I was the administrator of the Duke Family LTD with CWEI. I understand the difference between buying the royalty interested and a lease bonus. When I talked to the Landman for Primexx I was told that we should have our 10 acres should have be separate of the 52 acres lease agreement by Clayton Williams. I was the administrator of the Duke Family LTD with CWEI and I'm thinking CWEI Landman made the mistake, but would like to verify it with county records.
sorry,
I was the administrator of the Duke Family LTD with CWEI. I understand the difference between buying the royalty interested and a lease bonus. When I talked to the Landman for Primexx I was told that we should have had our 10 acres separate of the 52 acres lease agreement by Clayton Williams. I'm thinking CWEI Landman made the mistake, but would like to verify it with county records.
Well, that can get really expensive really fast.
One very cost effective way to verify your record title that is to ask both the CWEI Landman and the new guy send you their documentation.
Since CWEI has already leased your LTD interests they might not be inclined to send you anything, but the guys who want to lease what they say is presently unleased shouldn't mind sending you at least the bare essentials you need to see what's happening on the ground. Ask them to make their case.
Actually, you can add a provision to your leases that requires that the companies provide you copies of any Title Runsheets they prepare or obtain on your lands or interests. Title Runsheets are complete histories of your lands or interests from Sovereignty to the present.
You can even include that they are required to provide you with any Title Opinions they prepare or obtain on your lands as well.
Title Runsheets and Title Opinions are extremely expensive to have prepared. Adding that sort of provision would possibly gain you thousands upon thousands of dollars' worth of research for FREE: 90-DAYS SAME AS CASH.
I'll send you an example provision if you would like.
Charles
Thanks, when and if I hear from Primexx with an offer I will let you know. Thank you for all the information.
I do not think you should even consider signing the Primexx lease without getting guidance from an oil and gas attorney. Unless you can decode the legalese, how could you know that you would not be placing yourself in jeopardy? Just my two cents.