Need help on understanding the lease
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Permalink Reply by Tim Tarr on -
First things first. Do you think royalties and signing bonus are what you'll sign for. No need to waste time on negoations if that isn't "settled". After that you'll have to consider how much personal effort your willing to put in.
If your lucky there may be a landowner group that covers your area. If not, be prepared to spend lots of time doing research for those terms and conditions you want. Or you could hire a Competent Lawyer to negotiate terms. I work quite a bit cheaper than an attorney so did the work myself. I actually enjoyed doing that, yes, I'm " a bit off". Learned plenty for later. Like those ROW agreements that come after the Lease. Sometimes before, but that's another story.
Than had Lawyer review it. To check for them jots and tittles.
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Permalink Reply by Baily on
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Again,I thank all of u! That's how I feel it will be worth having a lawyer.Just concerned who to get. I'll check to see if I can find a landowner group on my area. I so concer
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Concerned that I would travel some distance to get answers. For Tim, do you do this for other people,for a fee,then have a lawyer review it? There is a lot of statements in the lease that a red flag comes up when I read it.
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Permalink Reply by Tim Tarr on
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I thought about doing that for about 10 seconds. Even the best leases will probably have issues. So, I don't want to be involved in that. I'll give advice if I can but no formal advice.
I did get a laugh recently on my changes to a ROW agreement. Landman said "I've been doing this for years and never seen so many changes to this. Are you a Lawyer?" I thought a few hours later I should have said "no but I stayed at a Holiday Inn".
When perpetual and inpertuity are in a Temporary agreement something is amiss. The reason I said we would let them run a Temp. Line was I don't want to say no to everything. Didn't even try for extra $$$. That just might make me say no to everything. One thing I hate worse than a liar is a thief.
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Permalink Reply by G.H. on
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Look, there is nothing that says you have to sign. Who cares what the landmen were told? If they were told to "camp out on your lawn" or whatever, then let them do that. Just because they are there doesn't mean you have to sign. Don't let them rattle you. Get the answers you need, and sign when you are comfortable with the document.
If they keep bothering you maybe you can tell them to give you some more incentive to sign! Haha.
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Thank you! I am just starting to ask questions so don't know much. They have me believing if I don't that I will lose out, and to sign over to a family member so they don't lose out if I don't want it. And I did tell him if he came here that's not going to make me sign. But again thank you. I don't know who to get but I'll keep looking and asking questions while I am praying over this.
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Permalink Reply by Janice L. Hancharick on
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Landmen are salesmen who work on commission. They may or may not have a clue about how to interpret that lease any more than a 5 yr. old would. They are tell landowners what the company wants them to say. Like learning a poem for recitation in grade school. What's the deal w/the pressure? They want a bigger paycheck! They don't give a lick about your family members or your land, but what an interesting ploy. Trying to "guilt" you into signing.
Rushing a landowner into anything legal is a sure sign something's fishy no matter how good it sounds.
Hang tight!
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I appreciate everything all of you have said and it has been very helpful. I will listen to the programs, I do read it over. I guess I would just like someone else to handle it, concerned I will make a mistake not knowing much. But all of you have given me some peace about it. I have been praying God would send someone to help. I will continue to look for a lawyer and a landowner group. If u know of any I would go the distance for the help. Thanks!!
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Permalink Reply by rmc on
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Mr Baily just remeber that this lease that is being presented will probably be the most important document you ever sign.
With that being said trust no one start learning all the information you need to learn its on this site.
Always use an attorny to reveiw
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I pretty much agree with what everybody has said here, but I'd like to add a few other ideas.
First, sit down with a pad of paper and jot down what YOU want or don't want from a lease. Amount of bonus and royalty rate are obvious starting points, but there may be some personal issues as well; maybe you want them to stay away from your swimming hole, or to not drill where you can see the rig (or a compressor station) from your porch; whatever you want, try to get it addressed in the lease.
There are certain things you need to deny absolutely. There's another thread on here where Ron Hale listed four clauses you should not have (and by that I mean walk away without a lease rather than accept). I don't agree entirely with his reasoning, but he's dead right on some things and it's a good place to start.
Once you get a "wish list" put together review the XTO lease form. I'll bet that it addresses none of your items, or if it DOES talk about them it is in language where they get total control and you get nothing; Not a knock on the lessee, that's the way most lease forms written by producers are written.
Once you've done everything you can do personally you probably need to run it by a lawyer. Please use an experienced oil & gas attorney! This specialty is very complex and has a language all its own based on 150 years of very active litigation. There will be things you haven't considered that could be "deal breakers" for you, which a good lawyer can point out and possibly mitigate with you preferred language.
That brings up to a very important issue. How much land is the lease going to cover. Obviously, if you have 10,000 acres you can afford to spend more protecting it than if you have 10 acres, plus the more land you have, the harder it would be for the lessee to "work around" you. If you have a small tract maybe you can join with some neighbors to jointly pay for the legal review, legal revisions etc.
Last I have a couple of personal "do's/don'ts" I would insist on:
1. Payment is acceptable in cash or by certified check drawn on a Nationally chartered bank in the county where you live. Bank drafts are totally unacceptable.
2. They get a signed copy of your lease ONLY when they tender your bonus. I understand they have to run title etc., so I would agree to placing the signed lease in escrow (maybe at the bank shown above) until they get their paperwork done, but they don't get a lease with my signature until I get a bonus payment.
3. Before I sign the lease, they will both sign the base document and sign or initial each page of the lease plus addenda. I want to be able to prove in court what we (both) agreed to. [This may prove impossible to get, but it is the best way to make sure the LESSEE knows just what they agreed to and not just the landman]
4. The lease, not just a memorandum of lease, is filed at the courthouse. This can get expensive particularly if you have a ton of pages of addenda, and they may not want to let everyone know what you "slicked them out of", but the lease may be in effect for a century (I take care of leases granted in 1913) so you want everyone to be able to see what was and was not granted.
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