New Eclipse Lease

I was offered an Eclipse lease the other day.

They have changed their offering to an 8 year lease with a bonus of 1k per acre per year.

18 percent royalty with about a 60 percent pugh clause.

I am not interested in a lease with those terms but I thought someone might be interested to hear the offer dejour.

This was for unleased acreage in Monroe county Ohio

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Permalink Reply by Olive Sue on July 28, 2016 at 6:19am

We were told in a land group, when this all began 4 0r 5 years ago to never accept a draft.  If you have a good Pugh clause it helps on those acres not included in a unit but even if you are released on the unused acreage someone must need your remaining acres to get any benefit.  With the best knowledge approach anything in oil/gas with as much solid information as possible. A lease can become a lifetime of joy or MISERY.

Permalink Reply by Paul Butler on July 28, 2016 at 6:15am

Everyone knows what they say they use drafts for.

Clearly they have ulterior motives, the main motive being to get something for nothing that can be used to borrow money.

I was in this business for 20 years before I saw a draft longer than 30 days, with the vast majority being 7 days.

The homework (including title) should be done before the lease is signed.

In my opinion, 90 day drafts (any draft over 7 days) are a construct/artifice dreamed up by con men purporting to be  engaging in oil and gas exploration.

The failure to do the homework (the ready, fire, aim ethos) has resulted in the financial catastrophe:

  

Permalink Reply by Ben Jamison on July 28, 2016 at 8:46am

Matthew, would you mind sharing the township for the lease proposal? or if not the location within the county of the land? My friends and family have a camp there. Thanks in advance.

Permalink Reply by Puzzled on July 31, 2016 at 2:54pm

jackson township monroe county ohio-

Permalink Reply by Chuck on July 29, 2016 at 12:00pm
Similar lease options by eclipse being offered in Madison township Guernsey.
Permalink Reply by David Allen Lilly on July 31, 2016 at 1:56am

In the beginning I was steadfastly against the new Eclipse offers. I am not so much worried about the front end, the up front bonus, as I am the back end, the royalties.

But, someone started a thread on this site a couple of months back with a question about unitization and production. When I was looking into the unit maps to try to figure out what was going on I noticed that the units were drawn and drilled but that there were many properties left in between the units. These were configured in such a way that it was very unlikely that any other producer would drill the properties.

The properties in between the units drilled were effectively held by production without a single blade of grass disturbed because of the way the neighboring units were drawn.

If this is the case for your property you may not have a choice in accepting the less than generous offers like the one we are discussing here.

The very best advice any of us can give is for you to find legal counsel to explain your options to you. When oil prices recover, and they will, you may get a much better deal being force pooled than signing a lease like the one described here.

If I were faced with this decision I would likely wait it out, but, that would depend on the advice of legal counsel, I just think that a down market like this is not a great time to be making a deal like the one mentioned on this thread.

Please keep us informed, I learn the most from other people's experiences and information is power.

But get some legal advice.

Permalink Reply by Puzzled on July 31, 2016 at 2:57pm

Thanks for the advice......fwiw I am not at all in favor of accepting what they offered-

Permalink Reply by Rickey L McLaughlin on August 1, 2016 at 10:26pm

Sucks that they have change leases! They are making plenty and they know people need the money! it's unbelievable how companies will do anything to save a dollar! People have learned to count on that money! I hope these changes don't affect my extension in a year.   

Permalink Reply by Rickey L McLaughlin on November 20, 2017 at 6:56pm
I got paid! Eclipse was confused of a minutes who the ext. Money went to but I straighten that out..and check was in mail same day..fed x brought the next day. Didn't get the 10% resign and they acted like I was dumb. Never got it was left out sneaks!
Permalink Reply by John Clark on August 3, 2016 at 7:13am

They are trying the same thing in Guernsey County. What was their per acre price?

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