Is an oil and gas lease valid at time of signing or after payment?
We signed with an oil and gas company in the beginning of 2011, but they did not pay us until 10 months later. Does the lease date revert back to the signing date or the date that we received the check?
Thank you, peg
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Replies to This Discussion
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Permalink Reply by Paul Butler on -
The date of the lease controls, unless expressly stated otherwise within the 4 corners of the instrument,, notwithstanding either the date of execution or payment.
10 months? That's an outrage.
That's the result you get when you have inexperienced people/charlatans running oil companies, hiring incompetent people to give them color of title, so they can hang bad paper on suckers from Wall Street. They better hope those wells come in big. Nearly every player has executed this play with stunning/breathtaking incompetence. All of the players have had to cough up huge positions to third parties just to be standing. My prediction is that all of the current players will be out of the Marcellus within 5 years or reorganized and operating as distinct entities.. New players will arrive and this Marcellus history will be just a bad memory. People running oil companies today will be back selling insurance, used cars, teaching gym at local high schools, etc. It's a dang shame, but that's business.
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Permalink Reply by martin on
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Our lease says they have up to 120 days to pay. The question to me is if they can change their minds before 120 days can we change ours as long as we didn't get the check yet. For example receiving a better offer.
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Permalink Reply by Paul Butler on
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Your lease says 120 or your draft says 120? That's 120 business days too, so I can see how 10 months passed before Ms. Murdock got her money. I'm trying to imagine the sociopaths hanging 120 day drafts. Shocking. It's my understanding, based on 35 years in oil & gas, that you're bound. Their obligation to pay the draft, illusory as it may seem, provides the consideration to hold the lease. Supposedly, the draft will only be dishonored for a failure in title. 120 day drafts are rife with opportunity for abuse. They couldn't pay me to give one. If someone tried to pay me with a 120 day draft, I'd give them a straight right (just kidding).
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Permalink Reply by Peg Murdock on
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There was a problem with our title, that is why it took so long. Not the oil and gas companies fault. peg
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