Signed lease offer but never got paid

Roger Mills OK 25-16N-25W After some months of negotiations myself and my siblings we signed a lease & bonus offer but have yet to receive payment. The leases have been recorded already without payment from the operator, Upland Operating LLC. We were advised to force them to release the leases so we can sign with Mewbourne, whom we are assured will pay out in a timely manner. What are next steps and must we hire an attorney?

Welcome to the forum. This is an example of why it is important to not hand over a signed lease without getting payment the same day. It is a good idea to have a third party such as your accountant or bank or attorney hold the signed lease until the funds are delivered. Then they hand it over to the agent in exchange.

First of all, read the documents that came with your lease. Many times there is a set timeline for running the title search before you get paid. This can be up to three months or so. If you are within that time frame, then you have to wait until it is over. If that time frame is up, then start with each one of you sending a certified letter return receipt requesting immediate payment or a release of lease. If that does not work, you may need to get an attorney involved.

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I just remembered that Upland was doing some selling, so that might have been why your lease was filed so quickly.

You may also have to contact Yukon Trading Company LLC or Sandcreek Oklahoma next. Upland just assigned a bunch of acreage in Roger Mills to those two companies. Start with Upland first.

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Unfortunately none of us made a copy of the order of payment letter, so now working on obtaining it. Pretty sure we are way past the time frame now. Your advice regarding the lease and payment exchange is spot on, in hindsight. Thank you so much for your input, we will follow it.

When did you sign the lease? You said you had an order of payment, when was its due date?

This is a good time to learn that you must retain a copy of all legal documents, preferably both the physical original and a scanned copy into a computer file. Also save a pdf of the emails in the computer file so you have a record of correspondence as well.

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We are working on obtaining a copy. Yes we screwed up!

All leases were mailed in by May 17th so should have arrived within 2-3 days. I now have the OOP letter and it states a 60 business day period.

Given that they may have sold your lease to someone else, the 12 weeks has passed. That was the timeframe that they should have been doing your title work. Check and see if they don’t have a secondary time frame on the OOP. I have seen another 90 days on some. That may have been sent to the new owners. Suggest that each of you send a certified mail return receipt to Upland demanding payment and see what happens.

It is the mineral owner’s responsibility to work by certified mail and keep copies (paper and digital) of all title information, correspondence, leases, force poolings and everything else that goes with your minerals. “Paper” trails are critical.

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Actually there is a clause stating lessor has to notify in writing and lessee has 30days from receipt to make payment or surrender lease.

That could help you phrasing of your letter!

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So Upland has no legal obligation to notify us in writing if they have sold or assigned our lease?

Not unless the lease contains a clause requiring notice or requiring consent to be a valid assignment. This is a reason to periodically check the county deed records to see if all or a portion of the lease has been assigned, such as a percentage or severance by depths. Keep a copy of the assignment in your records for reference.

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Have you had any contact with Upland regarding the title verification and payment date? They are an operator so its a bit surprising that they would string you along. As long as there were no title defects and If it were me, Id send an email to whomever you dealt with at Upland and say that they are past the pay deadline and they have a week to pay you or you are going to sign with Mewbourne.

The pickle we are in is Upland recorded the lease couple months ago. Yes, I called today and left voicemail, we will see if they even call back.

Send a demand letter by certified mail noting that the bonus is overdue and that they need to pay or release the lease.

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There is no simple solution to your issue; although, there is great advice on how to do it properly the next time. As you go through the process of trying to collect the funds due to you, document everything. Take notes on content of phone conversations as well as the time/date. Maintain copies of all correspondence and emails. If you want to lease to another company, you will need to get a Release of Oil and Gas Lease and have it filed in Roger Mills County. You should get ready for a lengthy process.

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James is correct. Other than a lawsuit the path to recovering the bonus is probably slim.

This post is not legal, tax or investment advice. Reading or responding to this post does not create an attorney/client relationship.

Well you guys are just full of good news😁. What happens if one of us goes to sell?

An Old Family Attorney told me to always keep the envelope legal papers were mailed to you in. He had prevailed in many lawsuits because of postmark dates. Also don’t tear into the envelope, open it with a letter opener.

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