signing a contract for this CHESAPEAKE EXPLORATION, llc COMPANY

i AM A LAND OWNER IN SMITH TOWNSHIP, MAHONING COUNTY OHIO. i WAS APPROACHED TO SIGN A CONTRACT FOR A OIL AND GAS LEASE. THE ORIGINAL LEASE WAS DONE IN 1964 WITH PREVIOUS OWNERS. THE OLD CONTRACT STATES WE WOULD RECEIVE 1/8  OIL AND GAS ROYALTY. THE NEW LEASE STATES WE WILL RECEIVE 1/8 OIL AND GAS ROYALTY,THAT PROPORTION OF SUCH 1/8 ROYALTY WITH THE ACREAGE CONSOLIDATED BEARS TO THE TOTAL NUMBER OF ACRES COMPRISING SAID DEVELOPMENT UNIT.( WHICH IS 160 ACRES) DOES THIS SOUND RIGHT? any comments would be greatly appreciated.

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Permalink Reply by JDM on April 20, 2012 at 1:17am

Are you going thru a Mason Dixon Rep?

Permalink Reply by sandy scott on April 20, 2012 at 6:18am

not really sure. the contracts have a bunch of companies involved. chesapeake exploration llc, chk utica,llc. enervest engergy institutional fund 1x,lp.enervest engergy institutional fund1x-wi,l.p.,cgas properties,lp., and total e&p usa, inc. I am pretty sure he's from Chesapeake Exploration,LLC.

Permalink Reply by Clinton44 on April 20, 2012 at 2:19am

I Would have an experienced gas/oil attorney look it over before signing also they should specify a royalty percentage instead of the 1/8 Sounds like they are trying to get you to sign or ratify an old boiler plate lease with the 1/8 royalty wording...

Are there any wells that are producing from the old 1964 lease terms on your property that would hold you to the terms of the 1964 lease??

Permalink Reply by sandy scott on April 20, 2012 at 6:11am

we were still getting small(35.00) checks  until 6 months ago, then nothing. the wells are across the street and to the sides on us, but not on my property. I notice none of them are working right now. I asked about a sign on bonus, but he said we didn't qualify because we already were in a lease.

Permalink Reply by Clinton44 on April 20, 2012 at 6:18am

Ok sounds like you are in an old lease possibly held by production, best to get a good O/G attorney to review what they are asking you to sign, to see if they are abiding by the terms outlined in the old lease pertaining to how long the wells that are not producing any longer can be used to hold you to the old lease terms. 

Permalink Reply by JK on April 20, 2012 at 3:55am

Sandy,

First of all, 1/8th is 12.5% and is THE lowest percentage by law. You can get higher.

Second of all, you need to seperate the oil and the gas.

YOU NEED AN ATTORNEY BEFORE YOU SIGN ANY THING!!!!!!!!!!!!!!!!!

As we have all learned here on GMS, there are many clauses you need included in your contract.

You are in a real HOTBED in OH for gain.

You do not speak of any sign-on bonus money. You are far from being ready to do business!

 

 

Permalink Reply by sandy scott on April 20, 2012 at 6:03am

they said we couldn't get a sign on bonus because we already had the lease  and its only for new leases only.

0l1a6laz7smpfPermalink Reply by 0l1a6laz7smpf on April 21, 2012 at 4:32pm

that's a bunch of malarkey>>...they can pay you whatever they need to ..they want you to sign something.   There is no law about them only giving bonus' to new lease only....??  When signing an amendment that is an opening to discuss your lease with them.   If they only want to amend something for their best interest, why not your best interests?

I am so glad you came to the forum and asked for some help....see how many want you to be steered to the right lawyer Or even if there is a local land group in your area it would be better than to sign an amendment in ignorance and it does take some time to learn about all of this and the oil company knows that to their advantage.

Pls do not use just an attorney...use a gas/oil attorney ...that is clearly working in your best interests.  If you 'friend me' so we can email here I can give you someone that you can at least call and ask questions to help guide you.

Permalink Reply by sandy scott on April 20, 2012 at 6:23am

The old contract was for 20 years, which was signed in 1964. but we have been getting small checks ever since we moved in here in "89.  from that. I have wells all around my property but none on it!

Jim ShoosPermalink Reply by Jim Shoos on April 20, 2012 at 4:03am

You have stated some possibly conflicting information.  You said you were approached for an oil and gas lease, then you say that you are possibly subject to an existing oil and gas lease from 1964.  If you are subject to an existing lease then possibly you are being asked to modify or ratify the old lease.

Permalink Reply by sandy scott on April 20, 2012 at 6:28am

now that I read more into this the contract it does say that it is for an amendment and ratification of oil and gas lease, but if my first lease was for 20 years it should of been done with, right?

Permalink Reply by Clinton44 on April 20, 2012 at 6:33am

Not necessarly, If you are in a unit with producing wells and you probably were since you stated you were receiving royalty checks.

If that is the case the lease is more than likely held by production inperpetually, unless they exceeded the time frame in the lease having to do with how long wells can be non-producing before the lease must be released.

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