reply to steve, money amtmis small for each family member so going thru our bank seems safe??? Wilsontownship said:
Steve, I am new to this game but I suspect that it has been perverted over the years with gascos developing strategies and techniques to their advantage. Unfortunately, that may mean they decide they want to tie up a landowner and then manipulate their holdings based on many market conditions later (well results, market, jv deals, whatever).
Also, since you have been in the business for 40+ years I don't you to the typical landowner that gets a knock on their door one day. I was part of the big play in MI that was booming and then went bust and now there are many lawsuits as a result. We all thought we had legit deals and even thought we were smart to not accept bank drafts - instead we accepted Order For Payments with varying due dates and terms depending upon the savvy of landowner and/or attorney. As a recent Reuters article noted; CHK rejected 97% of leases due to trumped up title defects. In reality they just wanted out of the play.
It today's climate I think it is very fair to make a blanket statement that it is risky to accept OFP or drafts as a means of payment. I understand the intent and value of a delayed payment to verify clear title etc, but since the tactic now is to sweep into an area and lock up the land and then later decide if really wanted (while the loandowner has been removed from leasing to others). Nope, not worth that risk regardless of how many people speak the praises of a bank/sight draft.
Wilson
Steve Carlson said:I have been leasing for my own properties in ND since late 1970's. Every lease has been paid by draft including two leases last year. Never a problem. All have been handled through my local banks collection department wherever I have lived and everyone has worked out perfectly.