Old lease expires, yet ties us to renewal at same $$ rate.

We signed a lease 5 years ago for close to $700 p/acre.  It expires soon.  Language gives Co. the option of re-signing for 5 years at the old rate.  Know of any way to increase?

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Permalink Reply by Mark Duncan on June 22, 2013 at 8:13am

XTO allowed my low paying 5 yr lease to expire. Several letters were sent and phone calls made but with no luck. I am only 1.3 miles from their pad,But the horizontal bore is the other way. I am thankful they didn't tie up our land at that rate for another 5. Many of my neighbors are tied to 10 yr leases. Common sense tells me if they could keep my land for peanuts but allowed it to expire their would be no royalties in my near future. Wish you luck.

Permalink Reply by Whites on June 27, 2013 at 11:31am

At this point, you may be lucky if they renew you at $700 per acre.  I know there are companies operating in the Marcellus that will let such a lease expire in the hopes of renegotiating for a lesser bonus amount.  Of course, that depends heavily on what the lease market is currently in your area.  Good luck

Permalink Reply by Lisa McKenzie on June 27, 2013 at 12:10pm

Read your lease or have your lawyer read it for provisions that would work to your advantage.  You are probably stuck if they choose to renew.  If you are lucky, you might find a provision that lets you terminate the lease for non-payment of that renewal fee.  . . . which is why you don't call the oil company.   Based on the draft leases I've been offered, they probably require you to give them written notice and they probably have 30-90 days to pay you though.

Permalink Reply by Thomas Lilli on June 28, 2013 at 7:43am
I can't imagine why the gas company would NOT renew your lease. It would make no business sense for them to let it expire if leases are letting for thousands and they hold your minerals for $700 per acre. Cheap leases such as yours (I was in the same boat) are assets on a balance sheet to the company unless you have been determined to reside in an area with no mineral value. In that case, your mineral rights would be worthless to them.

If you are beyond your renewal period as spelled put in your lease and your gas company has not sent you a check, have your G&O attorney review your lease and ask him for advice about getting a clean title of your mineral rights sans the lease.

Has there been any seismic exploration in your area? You would have received notice from a company about such activity and your land would have been included in such activity. You would have also had to agree and most likely been paid.

In all though, the gas companies renew these leases 60-90 days well ahead of the primary term. They did in my $90/acre/12.5% lease when my neighbors got +$4000/acre/20%. Piss poor legal council in my case. I got a new lawyer.
Permalink Reply by Billy Park Whyde on June 28, 2013 at 11:13pm

In case you all didn't hear it Obama took hundreds of thousands of federal land out of shale exploration. It peeved off the O&G companies. What does that mean? The O&G companies lost one H of a lot of cheap cheap land. As a result private land is and will be in higher demand we know it but the O&Gs sure won't admit it.  I want to see the O&G companies drill when they have no land. We can and should seek what we can after all I do not see us getting a discount at the pump!

Permalink Reply by Thomas Lilli on June 29, 2013 at 2:43am
It's my experience that state and federal land managers are light years ahead of private citizens. In pa anyway. State and federal land is much more expensive to O&G companies, they require production clauses and three year terms, not five. The big draw to government land is the massive amounts of contiguous acreage.
Permalink Reply by Kathleen Gensler on June 29, 2013 at 6:47am

Anyone one heard of what leases are going for in Sullivan county? Ours expires in July,was a 5 year.2650 at that time.

Permalink Reply by westy11 on June 30, 2013 at 9:52am

    Hello Kathleen,

         My lease expired in early June. Heard from Chesapeake about 1 wk ago. Their verbal offer was $ 250 per acre with all addendums for a 1 year extension. 11 acres in cherry mills area. My original lease was 5 year $ 2600.

Permalink Reply by Kathleen on June 30, 2013 at 10:07am
Hi, I know I'm not the Kathleen you are replying to, but I want to point something out. I find people forget to look at the lease payments this way.
5 years ago you got $520 an acre per year; 2600 / 5 = $520 an acre per year.
I'm just trying to make it look better, if that's possible. :0(
I would wonder why they only want a year now. Is there a well close to you? Is one planned? Is CHK just trying to keep leases on their books as assets?
Permalink Reply by westy11 on June 30, 2013 at 5:06pm

   Hi Kathleen 11,

          One well is very close and another, that would include my property, is permitted. PS, I haven't forgotten. Your point is well taken...

Permalink Reply by melissa humphrey on July 2, 2013 at 2:14am

You signed a 5 and 5 yr lease. No ta 5 yr lease. 

No outs.

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