Top Lease - not receiving my balance due

My brother and I each have 20 acres in Section 21, 153, 103 in Williams County. Last June, we agreed to a top lease offer by Brigham. The lease became effective on Septembeer 28th. They sent us the initial amount within 30 days of signing, but to date, we still haven't received the balance due us. I have called and talked to the landman (woman) who is handling our section and she told us it was tied up in the legal department as they have to send out an addendum to change the date. They would send the addendum out the same time as the check. I have called each week since she told us this and she keeps telling us "next" week. It's going on two months now of "next week".

The original landman that we got the offer from said in his seven years of working, he hasn't ran into this problem.

We are to the point of asking for a release and calling EOG to see if they will top lease our acres as they have applied for a permit to drill.

Has anyone ran into this problem and if so, what did you do?

Gail

It happens but not often.

Usually a lease will say that the it has to be funded/paid within 30 days or it's voided. This will be applicable for both your down payment and your remander amount due when the lease takes effect. It will also usually say that notice has to be given in writing by you to the leasor, and then usually they will have a period to pay you (7 days or 14 days, or 10 business days).

You should contact an attorney, have him draw up this letter, and then lease you interest to some one else.

Thanks Daniel.

Gail, the bad thing is you probably can't get the lease cancelled if you have cashed the earnest money for the toplease. The most you could likely do is sue them for the remainder of the bonus and hope to recover attorney fees but they would still hold your lease. I'm not a lawyer but I have experience in what you can and can't do when they fail to pay. Only if they gave you nothing, failed totally, could you hope to have the lease cancelled. The initial amount is enough to hold the lease and the rest is now just a business dispute. If the matter ever comes up again, do not accept partial payment for anything in oil and gas, probably good advice in any business matter anywhere else also. I happened to notice that you are on 640 acre spacing and that there is a very nice well in the 640 spacing just north of you producing 81,500 barrels in about 27 months. I hope you don't have too much trouble getting your money.

Thank you. I am hoping it will be in the mail "next" week. lol

r w kennedy said:

Gail, the bad thing is you probably can't get the lease cancelled if you have cashed the earnest money for the toplease. The most you could likely do is sue them for the remainder of the bonus and hope to recover attorney fees but they would still hold your lease. I'm not a lawyer but I have experience in what you can and can't do when they fail to pay. Only if they gave you nothing, failed totally, could you hope to have the lease cancelled. The initial amount is enough to hold the lease and the rest is now just a business dispute. If the matter ever comes up again, do not accept partial payment for anything in oil and gas, probably good advice in any business matter anywhere else also. I happened to notice that you are on 640 acre spacing and that there is a very nice well in the 640 spacing just north of you producing 81,500 barrels in about 27 months. I hope you don't have too much trouble getting your money.