Replies to This Discussion

Permalink Reply by Lynn Wigglesworth on August 31, 2011 at 12:06am

I don't mind them allowing seismic, but THEY wrote the addendum, then, after I signed the lease, decided that they wanted to change it. For such a large corporation, they don't seem to have their act together (am I the first person who ever got a non-surface lease with them?). I wonder what else they will change? Will they decide they don't like my 'no deduction royalty' addendum and remove it?

Permalink Reply by Doug Pierson on August 31, 2011 at 1:15am

You will always have your copy of the lease.  It is highly, highly unlikely that they would attempt to cheat you and try covering their tracks by falsifying a legal document.  Any comparison of the two documents in court would turn up discrepancies and you'd have them right where it hurts.  The landman brought you your new copy of the addenda and you approved it verbally.  So, you remove all the superseded pages from your copy and replace with the new ones.

 

I was always taught that when signing any multi-page contract, that both parties initial each page at the bottom margin.  Sometimes there are even little spaces for that.  That maintains the indication that that is the page that you've seen and approved.  Then if any page is revised, you would initial the new page and discard the old page.  Same thing when making pen and ink changes to an existing page - both parties initial and date the change.  Thus, if a page or a change is missing your initials, it's an indication that you did not approve of it.

 

But bottom line, you have your copy and you are going to monitor how they do their work and whether they are paying you correctly, and you will be able to correct any problems.

Permalink Reply by Lynn Wigglesworth on August 31, 2011 at 3:03am

My copy isn't signed by anyone; the landman brought 2 copies; I signed one for him and I kept the unsigned copy. No one from 'the other side' signed anything; my signature and my ex's are the only ones on it. Also, as far as I know, the landowner NEVER gets a copy where Shell has signed anything. They eventually file it in the courthouse and that's what makes it legal. I doubt that they will try to cheat me, but the fact that they can change it after it's signed bothers me. It only seems to be legally binding on my side, not theirs.

Permalink Reply by Doug Pierson on August 31, 2011 at 3:10am

But that's my point. You having a copy, signed or not, is what keeps everybody honest, because if there ever is a dispute, they'll get caught because the documents will be different.  So, keep it in a safe place with all of your other important papers.  I think your biggest concern right now is just paying your taxes.  So relax, enjoy the good weather and the fall harvest.

Permalink Reply by Lynn Wigglesworth on August 31, 2011 at 3:20am

Is an unsigned document worth anything? Anyone could have written it and printed it out. I could print out an addendum that would look just like theirs, but would give me 20% royalty. Who's to say which is the real one and which isn't? I'm not overly worried about it, but it certainly seems screwy to me to base so much on unsigned documents that they can change at their whim.

Permalink Reply by Lynn Wigglesworth on August 31, 2011 at 3:42am

"Look, you actually have given them a 90 day "option" to lease your rights based upon the final document that the landman received from you.. You have made an offer to Shell based upon that document. That is why only you signed it."

But is ISN'T based on the document I signed. They changed it AFTER I signed to make it more beneficial to them. I seem to be the only one who thinks there's anything wrong with that.

 

Permalink Reply by Lynn Wigglesworth on August 31, 2011 at 4:02am

Yes he forced the changes. He just did it; didn't ask...just brought me a copy of the changed document.  The document is NOT as I agreed to it. The fact that they can change a document after it's agreed to bothers me; what if they decided to rewrite your addendum and remove something you wanted in there or add something you didn't want? They apparently can do that at their whim. If they can change one thing in it, they can change anything in it. THAT is what bothers me.

Permalink Reply by N Bohl on August 31, 2011 at 4:41am

No, I agree - that is really, really not right for them to do that. The truly legally binding document is the one that is signed by both parties and notarized. So you work out the terms and that document is signed by you and then the company may or may not sign it but once you sign it that's it - they cannot tack on changes after you sign it. If a change is made before they sign it at the very least they should have your OK - or re-write it and have you sign that and the other is destroyed. If you had an advisor this would not happen like this - not in a thousand years would someone dare to do this if an experienced OG advisor was working with you - which is why it is well worth paying a great advisor 3% of the signing bonus. It sounds like the landman is the one who made an error and then tried to correct it before Shell signs it. Once it is signed by everyone that's it - no changes without your written permission. I think you are right also about a copy of an unsigned document being fairly useless. You have every right to be concerned.

Permalink Reply by Lynn Wigglesworth on August 31, 2011 at 6:59am

Any suggestions as to what I can do about it now? I'd like some assurance that the addendum that get filed is the same one that I agreed to.

Permalink Reply by Brian V. on August 31, 2011 at 2:25pm

Lynn, first off congrats on signing the lease. You could have rejected the addendum and just asked them to accept the seismic permit as your written acceptance to surface activity. However, it appears that the only change to your addendum is allowing Shell to do seismic anything else would require your written consent.

 

Definately keep a copy of everything for future reference. I do not believe your addendum will ever be recorded in the courthouse because Shell only records a memoradum of lease which is part of the paperwork you signed. Basically it states that you signed a lease for your land and the length of the primary term.

 

I believe that the addendums should also be notarized but at the end of the lease itself there should be wording making the addendum or "attachment" part of the lease.

 

I guess if you have lease remorse you could see if there is opt out for the lessee in your lease. Leases I have seen in the past have a 3 day opt out time in which you could contact the lessor and opt out of the lease. I doubt they still allow that though. I only ever saw that once in an old Fortuna lease. I very much doubt that you opened any flood gates by signing this change though. Cheers!!!

Permalink Reply by Lynn Wigglesworth on August 31, 2011 at 3:01pm

Brian; I am in the process of rejecting the new addendum. It isn't what I signed.

I don't see how it's 'lease remorse'. I was perfectly happy with the lease I signed. If you agree to buy a house for $50,000 and the seller adds another 0 to the amount in the agreement AFTER you sign it, would you have 'buyer's remorse' if you made a fuss about it?

Permalink Reply by Ann Ticopa on August 31, 2011 at 4:23am

Josie,

It's naive to say that because the company is Shell, the Lessor will not be "cheated".  I don't believe it's the corporate culture, but any organization of that size has "bad apples".  Plus, in this instance, it's a third party who may be the culprit.  The landman may have made the change on his own or on the instruction of his employer ... not at Shell's request. 

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