Thanks for the info. We did get them to go up on the 3/16 but it’s the dang clauses that they are being difficult on. Like I messaged earlier now it’s the warranty clause. In all the years of leasing that is a first & I find odd. They in fact said it was a deal breaker for them so I guess they want to pool most people because I don’t know many that don’t scratch the warranty. Of course I’ve never been pooled so chances are the want you to warrant their mistakes there too but I don’t know. Appears they don’t trust their own title people. Have a blessed weekend!
They are extremely difficult to negotiate with. Now they are refusing to allow us to strike the warranty clause unless we sign another warranty clause basically saying that within the term of the lease they can come back if their acreage was wrong and demand we pay them back. No one can warrant anything they didn’t buy themselves. Any feedback on this is appreciated. I also called the OCC & they said they did not show Pointer Oil & Gas as a valid operator. They also said that’s not too unusual because like I was told by someone else it’s a shell company for someone else. This all sounds sketchy when you think about it.
If it were me, I would sit back and wait until the pooling case is posted and then decide. The actual operator will be listed and then you can decide to lease or go to force pooling which I prefer in many cases. A bad lease can hold your family for decades and decades.
I think I’m with you on this but other siblings are signing. The gross proceeds clause is very confusing & they told us the warranty clause was a deal breaker, her words. They flat refuse to let us strike the warranty but came back with a warranty clause that says:
LIMITED BONUS WARRANTY:
Lessor does not agree to warrant or defend title to the lands described herein, however; during the primary term of this oil and gas lease if an examination of title reveals a complete or partial title failure as to Lessor’s interest herein, Lessor agrees upon written request by Lessee to reimburse Lessee that portion of the lease bonus paid for this oil and gas lease which is subject to failure of title. Lessor agrees that the Lessee shall have the right at any time to redeem for Lessor by payment of any mortgages, taxes or other liens on the above described lands, in the event of default of payment by Lessor, and be subrogated to the rights of the holder thereof.
No one has ever refused to let us strike the warranty clause. In my mind they are trying to force us to warrant someone we know little about. We inherited & most of our minerals say an undivided interest. I can’t warrant someone I wasn’t a part of in the first place. You are so very helpful & it is greatly appreciated. I can’t really afford an attorney because it appears they will just back out if they don’t get their way. Which i find bizarre because it’s over 105 acres for all of us in 4 sections. I mean who does that! 
I always strike the warranty clause (just the “warrants and agrees to defend” part), and not being allowed to do that would be the #1 deal breaker for us. However, I’m not sure what the major objection would be to the LIMITED BONUS WARRANTY you just described. My exhibit A includes a clause that says, in part, that the lease is based on X net mineral acres, and if title opinion determines that the actual acreage owned by lessor is more or less, the appropriate party agrees to pay the other the difference. Would this sort of clause eliminate your objection to the substitute warranty clause they propose? Or did I overlook another difficulty?
They refused to let us strike the warranty so they came up with another one. I think my brothers are going to sign but I just can’t. I can’t warrant something I can’t prove & it appears they’d rather not have the acreage than strike the clause. I do wonder what their client would say knowing they gave up 27 acres per person, depending on who signs, just for the warranty clause. It’s a great deal of money but I come from a legal background & with them demanding the warranty clause it feels somewhat like duress & if I warrant something I do not know for sure is exactly what I own I feel like its fraud. I know most would argue they aren’t going to come back & demand money but to me it’s fraud warranting something I can’t prove & they refuse to prove to me. Thank you for the feedback. This is very stressful & it helps.
You seem to have more lease experience than I do @CyndyK so, just out of curiosity, what conditions would make you (or any owner) doubt the number of acres owned in a given section?
I used to be a landman but I was not a leaser. Landmen makes mistakes. I’m not necessarily questioning the acreage I am just not willing to warrant something I had no part in buying. Plus no one ever insists on the warranty or no lease. And most people strike the warranty clause.
Good Afternoon Cyndy. Please feel free to call me directly if you have questions regarding any of the provisions in our proposal or any of the terms being offered by us on behalf of our client. My direct office line is 405-758-4101. Look forward to hearing from you soon. -Michael Fleharty
This topic was automatically closed after 90 days. New replies are no longer allowed.