How can this be legal?

I just met with an attorney in my area to discuss lease addendum language. He informed me that Chesapeake does not sign, or record any lease addendums that they draft. The company says that is not their "policy".  All that gets signed and recorded is the standard boiler plate lease. I am not really comfortable with this scenario. Can anyone shed some light on how can the lease addendum possibly be a legal document if the lessee does not sign it?

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Permalink Reply by James Kerns on August 28, 2011 at 2:33pm
Hi Jim, I agree with your comment completely for what its worth.
Permalink Reply by Becca on August 31, 2011 at 1:33pm

A good contract benefits everyone involved. I am new to this type of thing, but think that sometimes folks are just too trust worthy and just go ahead and sign on the dotted line. Thanks everyone for their contribution to the discussion and best of luck. I will be starting my negotiations with the Company next week.

Permalink Reply by Becca on August 31, 2011 at 1:38pm

Just an observation, the differences between O&G Companies and the way all of this is handled is very interesting. I wonder if it is just because the all of the companies do business differently, or is it because the industry is fairly new in PA? Does anyone know if there are any resources out there that explain the "protocol" for how to deal with this process. It took me several attorneys professing to know about the O&G process to finally get to a point where I think I am actually ready to meet and negotiate with the landman. Landowners should protect their interests, your property and home are some of your biggest investments.

Permalink Reply by Timothy J. Boley on September 1, 2011 at 5:02am

Becca,

 

As an O & G professional I can assure you that it common to record a Memorandum of Oil & Gas Lease, with both parties keeping an original Oil & Gas Lease which has all of the terms. Somewhere on the face of your lease however, the Lease should have the following statement, or something similar:

This agreement is made expressly subject to all of the terms, provisions and conditions of the additional Paragraph 1 on the rider attached hereto as Exhibit “A”, and all of the provisions of said rider shall prevail over the printed provisions hereof.

By doing this, the company agrees whatever terms are to follow as Exhibit "A" are part of the agreement, and that those terms override any conflict in the document.

 

Lastly, if your attorney cannot explain this to you in a satisfactory manner, you might be using the wrong attorney. Everyone considering signing a lease should consult an Oil & Gas attorney. If there isn't one in your town, go to another town and find one. I encourage everyone I lease from to do just this, but unfortunately very few do. 

 

Permalink Reply by Lynn Wigglesworth on September 1, 2011 at 5:18am
This week I signed an Oil and Gas lease with a landman. Every page was at least initialed or signed, and it was notarized. After I signed, the landman rewrote (without my knowledge or consent) the Addendum page (making it far more favorable to the Gas Co.) and submitted his re-written page with my lease. He dropped off to me a copy of the changes after he submitted it to the gas co. I'm now frantically trying to get that fraudulent document back from the Gas co. I've informed them that it was fraudulently altered without my knowledge. So far I haven't gotten a lot of response from them. What else can I do?
Permalink Reply by Finnbear on September 1, 2011 at 6:05am
See an attorney.
Permalink Reply by Lynn Wigglesworth on September 1, 2011 at 7:01am
I did finally hear from the gas company; they are going to 'make it right', whatever that means. But I wonder how many other people this has happened to.
Permalink Reply by Finnbear on September 1, 2011 at 7:10am
Anyone who let's them get away with it.
Permalink Reply by Lynn Wigglesworth on September 1, 2011 at 10:09am
The problem is, you sign your lease, initial everything, get it notarized, then the landman takes it and you don't see it again until it is filed and a copy is sent back to you. Only then would you see that what was filed was not what you signed.
Permalink Reply by Finnbear on September 1, 2011 at 12:44pm

You should insist on at least photocopies of whatever you signed. That is not an unreasonable request and if they won't honor that request you would be right to suspect something isn't right. If you go buy a car or take out a loan or open a bank account or enter into any other sort of contract you get a pile of copies of everything you signed and an oil and gas lease is no different.

Caveat Emptor

Permalink Reply by Timothy J. Boley on September 1, 2011 at 7:23am
Please contact the American Association of Professional Landmen (landman.org) and let them know what happened. This individual might also be a member of the MLBC of the AAPL (Michael Late Benedum Chapter of the AAPL.) You can find them through the AAPL website.
Permalink Reply by Timothy J. Boley on September 1, 2011 at 7:25am
Any material change to a lease after signature makes it invalid.

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