Primary term #21 means that if there six names on a lease no one gets paid till the last person signs the lease John.
I am hearing lots of rumors that this deal will never finalize as due to the lease it can't be sold & ILG can't pay the bonuses? any one know the facts here?
I received no feedback on this & was again was told today that there are problems with this lease & the people will never get paid & the leases will eventually become void?
anyone on here that signed those leases? have you spoken to ILG & asked direct who the paper is sold to or being sold because if its not sold by now how will it ever fund within 90 days?
On the upside might be a do over which would be a good thing considering the higher prices & % going now!
In fact Des Wertheimer announced at his last meeting that it will never close & if you know people that signed a lease with them to come join his group like it never happened???????
I assume you meant #20 Primary Term since #21 deals with 21) Option To Renew/ First Right of Refusal
For clarity, I'll post #20 here:
20) Primary Term
This Lease shall become effective on the date of receipt by Lessor of the initial signing bonus payment. Except as provided herein, this Lease shall remain in full force and effect for a period of five (5) years from such date (hereinafter referred to as “Primary Term”). The Lessor agrees to sign any additional document(s) that may be reasonably requested to commemorate the effective date of this Agreement. The Lessee shall have a period of ninety (90) days from the date of the last Lessor signing this Agreement to pay the initial signing bonus. The payment of such initial signing bonus and any future payments shall be conditioned upon the satisfactory review of the title to said lands by the Lessee, who shall have the sole right to determine the acceptability of the title to said land. If the initial signing bonus is not paid within 120 business days from the date of the last of the Lessors to sign this Lease, the same shall be null and void as of the first day thereafter, except the Lessee may extend the 120 business day period by an additional 90 days by making a non-refundable payment of $100.00 per net mineral acre to the Lessor. Said payment to be in addition to any other payment required under the terms of this Lease Agreement.
#20 appears to say that the lessor will get paid 90 days after the last signature is received subject to title review by the lessee. Where it gets weird is that it also says the lease becomes null and void on business day 121 if they have not paid in 120 business days after the last signature is received. By signing this horribly written document you are essentially agreeing to both. It then also says that the lessee can extend the 120 business day period by an additional 90 days by paying an additional non-refundable $100/acre.
The say 90 days which is almost 13 weeks, then they say 120 business days which is 24 weeks plus any holidays in that time frame so that 24+ week period is the earliest you might expect to be paid. This smells suspiciously like an agreement to market and not a real lease. The extension wording looks like a CYA clause that automatically gives them another nearly 13 weeks after the original 24+ weeks by paying another $100/acre so at worst, you might be tied up for about 37 weeks before they have to ante up a signing bonus or walk away and maybe only pay the $100 non-refundable extension fee. If you are desperate enough to sign this deal then by all means have a good oil and gas attorney go over this and force them to clean it up before you sign.
To late to have an atty look at this, This lease was signed by as much as 20,000 acres in I believe Mid August, ILG is a Flipper ( lease Acquisitions per their website) out of Pittsburgh, there is a lot of other poorly written clauses in this lease. The Pool clause in this lease is maximum 340 acres. It appears at least the rumors are the O&G companies wont t take this lease & ILG energy LLC sure doesn't have 600 million or so to pay the bonus, so as you point out appears these landowners are locked up for 24 weeks minimum and possibly as long as 37 weeks when ILG knows now they CAN'T SELL or so it seems if the runors are true.
a local landowner touted it as a good deal to friends & neighbors lot of people getting antsy & trusted him, I looked at the lease & walked away, I Feel bad for them now, I think if it was me I'd be all over ILG & the Guy who set the deal up for hnest facts and hedging my bet & by looking to join a good landowners group, that will take 60 or 90 days to get an offer, so if it does fall thru I'm covered and at a higher bonus & Royalty with a real drilling company. Whats your thoughts.