We signed a lease in Feb 2008 for $17K. We live right on the border of Arlington and Mansfield in the South Hampton division. To date, I got one royalty payment for $25.
The contract calls for a two-year option renewal at the discretion of Cheaha Land Services. I know the bottom fell out of the 2008 boom and I was just wondering who I can contact find to find out if the two-year option will be picked up. I doubt it, but it would be good just to know.
I tried calling the number I had for Cheaha Land Services and got some generic recording for a family of companies and did not even hear one for Cheaha.
Does someone have a number or contact person so I can find out if the lease will be renewed or not? Since the lease expires this month, I would hope I would get some sort of notifcation.
Does you lease state at what renewal rate or that simply they have the discretion to extend the lease for an additional two years? Hopefully it is the latter, it will expire, and you can either renegotiate with them or another company or two will come calling upon you. I would sit back and wait to see if you hear from them. If not, you are free to lease at the current going rate, whatever that may be and you can negotiate. That is what I would do. Good luck!
Something seems off with a $25 royalty check. If you are recieving royalty checks I think you are held by production and your lease will continue. I’m glad you got the 17k. RWK
FJC: It sounds like you signed a 3+2 option to extend agreement. I also signed one of those but the lease expired after the end of the option period. However, it sounds like your lease is “held by production” if you received a royalty interest check. Do you know the Identity of the Operator? It sounds like you live in a subdivision and are probably pooled. If this is the case then the option to extend is a moot point. If your mineral property was not held by production then, check your lease agreement, then if the entity wishes to exercise the option to extend, this is accomplished by payment of the option bonus at least a month prior to end of your primary term. That was my experience.
You are correct. It was pooled through the subdivision. I signed the lease in February 2007. I got one check for $25 in late 2009 and then no communication since that time.
There has been no correspondence about the expiration or renewal of the lease agreement. Since I have not heard anything, I am assuming the lease will not be renewed.
It would be nice to get some letter confirming that the lease has been terminated and what the implications are for the termination of the agreement. I called the number listed for Cheaha Land Service which was a recorded number for a family of companies and did not provide an option to speak with anyone.
Thanks for your input. Mike Igau said:
FJC: It sounds like you signed a 3+2 option to extend agreement. I also signed one of those but the lease expired after the end of the option period. However, it sounds like your lease is "held by production" if you received a royalty interest check. Do you know the Identity of the Operator? It sounds like you live in a subdivision and are probably pooled. If this is the case then the option to extend is a moot point. If your mineral property was not held by production then, check your lease agreement, then if the entity wishes to exercise the option to extend, this is accomplished by payment of the option bonus at least a month prior to end of your primary term. That was my experience.
FJC: What County and Survey is your property? The Railroad Commission web site may provide some answers to your question. The well in your pool could also be shut in due to low natural gas pricing.
If the payment in 2009 was $25 exactly, then it seems probable that it was a shut-in payment.
Mike Igau said:
FJC: What County and Survey is your property? The Railroad Commission web site may provide some answers to your question. The well in your pool could also be shut in due to low natural gas pricing.
My property is in Tarrant County. I have no idea what survey my property is on. I tried looking on The Railroad Commission website. I tried calling another number I saw for Cheaha Land Services 817-246-2643. All I get is a busy signal. It sounds like Cheaha is not even around anymore. If the well is shut down because of low pricing and the contract is not renewed by the alotted time which is this month Feb 2011, then if someone does decide to start drilling again in the near future, I assume the negotiation process starts all over.
Unfortunately, I cannot find anyone who can provide an update on the situation. I am pretty sure Cheaha Land Services acted on behalf of Carrizo Oil for my area. I guess I can try that route and find if Carrizo can help update what the situation is currently in my area. All I want is just an update at this point on what is going on. I would think I would receive at least a letter.
I am surprised I have not seen more discussions considering that about this time 3 years ago, dozens of neighborhoods in Tarrant County were getting these $17K to $25K offers. All of these should be coming up for renewel (option) or at least a letter indicating that the companies are not going to renew.
Thanks for your input.
DJG said:
If the payment in 2009 was $25 exactly, then it seems probable that it was a shut-in payment.
Mike Igau said:
FJC: What County and Survey is your property? The Railroad Commission web site may provide some answers to your question. The well in your pool could also be shut in due to low natural gas pricing.
I cannot think of a valid reason why an oil company would send you a letter saying that they are not going to explore on or lease your property. Those letters would number in the tens of thousands per year.
A lease expires by its own terms. It is the fashion of oil companies to not file a release of the property unless your lease form specifically states that they will release all expired lands, with a penalty if they do not.
How to say this? If the $25 royalty check you received was due to a shut in oil and gas clause, that is the amount they pay you in LIEW of producing and they can extend the contract into the indefinite future as long as they pay the shut in royalty/rental, each year. I’d check my lease for a shut in clause. Hope this helps.
Don't hold your breath for a check. We had a three year option. It was up last May. Our division has been getting the run around about getting our checks since then and the new expected date is "sometime the first of this summer". That's over a year in arrears. They do, however, have to pay interest on those back checks if you send a formal, written request for that interest IF they ever start paying.
It seems my contract tells us if they do not take up an option within one hundred eighty days after the starting royalty date we can sign with another land company. Some of us in this division are trying to find out about that option since we had a difficult time (Feb, 2008, to May, 2008, before we got our first lease payments.
Oh, the number is 1-877-722-3755, Tori or Terri. Hope this helps.
I cannot think of a valid reason why an oil company would send you a letter saying that they are not going to explore on or lease your property. Those letters would number in the tens of thousands per year.
A lease expires by its own terms. It is the fashion of oil companies to not file a release of the property unless your lease form specifically states that they will release all expired lands, with a penalty if they do not.
I have negotiated rates between $10 and $25 per day after 30 days after the date of expiration.
RM said:
Buddy, What would be a suitable penalty?
Buddy Cotten said:
I cannot think of a valid reason why an oil company would send you a letter saying that they are not going to explore on or lease your property. Those letters would number in the tens of thousands per year.
A lease expires by its own terms. It is the fashion of oil companies to not file a release of the property unless your lease form specifically states that they will release all expired lands, with a penalty if they do not.
I think the company you may be looking for is Carrizo Energy. If you will go to the well site, it will tell you the name of the well, also the company that is producting it.
Sounds like you have a shut in clause in your lease and they are taking advantage of it. They probably still have your lease and you won't be getting any more bonus money.
I live in Arlington, TX and most of the wells are doing a lot better than that. But, Carrizo is really slow on payment. It took my friend over 3 years before she got a check.
Once you find the well site, you can call RRC and find everything out about it.