Replies to This Discussion

Permalink Reply by Carolyn Castle on June 26, 2010 at 3:23am

What was their reason for rejecting it and where are you in Bradford County? We will likely be signing with them soon. Also, if you don't mind my asking, what were the terms they were offering in the lease?

Permalink Reply by Charles Shea on June 26, 2010 at 4:53am

The property is in Pike Township. Chesapeake didn't reject the lease. We revoked it (within the 120-day period that they had to approve it) to sign with Fortuna in September 09 as part of the Friendsville Group. Chesapeake is now claiming that the lease was binding when signed by the property owner. I am trying to locate people who signed up with Chesapeake and then had Chesapeake walk away from the deal.

Permalink Reply by flynnk2000 on June 26, 2010 at 1:07pm

Well....we had leases sent by Chesapeake for our family's indivisible ownership of minerals, and Chesapeake assured us that we would receive payment. Then Chesapeake retracted the leases and walked away from four of us, but paid only one of us, thereby effectively tying up the minerals without honoring the leases they extended except for one person's. Other interested companies promptly withdrew interest after Chesapeake paid one of us, saying our ownership of the minerals was now tied up. Four out of five of us, therefore, were left hanging out to dry, and Chesapeake got off cheaply by paying only one owner's portion while they tied up the minerals indefinitely until sometime in the future when Chesapeake wants to finish the deal and pay the remainder of the leases owed for indivisible ownership. Surely, this can not be legal, but they did what they did.

Permalink Reply by Frank Walker on June 26, 2010 at 6:13am

Never heard of a landowner "revoking" a lease. How did your lawyer manage to do that?

Sure there are lots of instances of gascos not following through. They often have pulled that stuff in the past. Sorry, don't recall specifics, only the general thought. But a landowner revoking a lease. Now that's a new one. If you get away with it please tell us how your lawyer did it. There's lots of us who would like to escape some really, really bad leases . . . . disastrous ones, even. Thanks.

Permalink Reply by Charles Shea on June 26, 2010 at 7:21am

The issue is no contract is binding unless both parties are bound. It's something called mutuality of obligation. Our position is that until the bonus compensation is paid or the gas company unconditionally promises to pay it, both parties are free to walk away during the approval period.

Permalink Reply by Rob Thompson on June 28, 2010 at 4:39am

Does this mean that if we were to sign with Chief for like $5000 an acre and during the approval period, Chesapeake comes and offers me $6000, I can walk away from the lease with Chief?

Permalink Reply by Charles Shea on June 28, 2010 at 5:08am

It depends upon the terms of the Chief lease, but basically, unless Chief purchased an option on your property, if they can walk away, you should be able to walk away.

Permalink Reply by Cynthia Lear on July 27, 2010 at 2:40pm

We just received our lease back from Chesapeake claiming that they could not figure out who owned all of the mineral rights. I have an e-mail from the Chesapeake landman saying that Chesapeake was writing our check for 1/2 of the mineral rights the end of June, then they came back a week later and said that they were voiding the lease because of mineral ownership questions. Chesapeake approached us about leasing, you would think they would do some legwork prior to contacting landowners.

What can we do about this? We have 30 acres, and the landman said that they were returning all of the leases for the total original 460 acres. Our property is located in Burlington/West Burlington/Franklin Townships.

Permalink Reply by Charles Shea on July 27, 2010 at 3:15pm

Gas leases typically contain a provision that they are subject to confirmation of title or ownership of the oil and gas rights bring leased and allow the gas company 90 - 120 days to complete their title search. During that period they reserve the right to walk away.

The question is did Chesapeake identify an adverse claim on your title?