I emailed someone from the group with these questions but was wondering if anyone else has any input. thanks in advance. Here are my questions:
First of all, I received a lease today from Viper Resources out of Oklahoma City. In the packed along with the lease there is nothing more than a letter stating that I will receive $250.00 per acre as a lease bonus. Shouldn't there be some type of formal agreement in that regard? At the bottom of the letter it says that Viper "will send the bonus check within 30 days of receipt of all properly executed documents, so long as said mineral interest passes a complete title exam." Is this customary? Regarding the lease, should I have an attorney look at it? I've seen mention on the board of 2 year extensions. I don't see anything in the lease about that. I've also seen reference to depth limitations or something like that. It looks like a standard lease but I want to make sure I'm not overlooking anything. My last question is about the acreage. On the letter it says "net mineral acres 38.75" but in the lease where it lists the section, township, and range, it says 77.50. Why would those figures be different? Is there anything else I should know?
What is the legal description for your minerals. $250.00/acre seems very low. Is there any activity any the area? Also are they offering 1/5 or higher?
It’s in Creek County OK and the legal description is Section 11 Township 17N Range 9E. I haven’t seen anything about activity there but someone checked and said that 250.00 seemed like a fair offer.
Tom Ed Moore said:
What is the legal description for your minerals. $250.00/acre seems very low. Is there any activity any the area? Also are they offering 1/5 or higher?
I'm from Texas and I am not familiar with your Oklahoma laws/rules or even your area; but, I do have a couple of personal opinions about your question.
1. It looks like you have 38.75 net mineral acres which is a 50% mineral interest ownership out of the overall property of 77.5 acres. Someone else owns the other 50%. With that out of the way, signing a lease is a very important process. With only 38+ acres, you probably don't have much bargaining power; but, signing a lease
without using a reputable attorney is not very smart at all. First, IMO, there are no "standard" leases. At least in Texas, there are many documents that are called Producers 88's; but, there are different versions of the producers 88 and all of them are grossly slanted toward the oil company. There are a great deal of extremely important lease clauses, including a depth clause, expense free royalty, royalty percentage (nothing less than 20%), length of primary term lease with or without extension years. Plus there are many, many more issues that will help protect you in the future.
Don't attempt to do this without some expert advice. IMHO, it is much better to go unsigned than sign a lease that will cause regret down the road.
Thank you so much for your advice. I'm not really in the position to pay an attorney money that I might not get back so am just trying to make sure this is all legit. The more I read the more confused I get!!!! Also, would I just google a oil and gas atty in OK?
Believe me, I sure understand what you just said and we all know there are no sure things in life. One thing I do know is that these oil Lease Hounds feed off all of us mineral owners since not many of us have the extra money to spend on and attorney and yes this whole process is a frustrating and gut wrenching activity; but, IMHO, if a job is worth doing at all, it is worth doing "right" and signing any official document without extremely knowledgeable help ain't very smart.
A couple of things to consider:
1. Are these people serious about leasing or are they just trying to pick up mineral interest at very cheap prices. Once you have an idea about their motive, you will have a better idea if you can afford to even lease at all.
2. Talk to your neighbors and see what they are doing. For some crazy reason, many neighbors want to keep everything secret and won't share any information; but, some of them or maybe at least one of your neighbors has good sense and will share.
Again, good luck and IMO, this isn't something that should be done quickly or without much thought.
Julie L said:
Thank you so much for your advice. I'm not really in the position to pay an attorney money that I might not get back so am just trying to make sure this is all legit. The more I read the more confused I get!!!! Also, would I just google a oil and gas atty in OK?
Thanks again.....I don't live in Oklahoma. This land man contacted me saying that my grandmother owned these rights. i am the sole heir to her estate so the rights passed down to me. I subsequently found a lease where the land had been leased in 1982 so I know it's legit. I guess my question is, I didn't know I had these minerals and I wasn't expecting the money so what do I have to lose other than more money that I wasn't expecting in the first place. How might I be placing myself at risk by signing a lease. I read in an article about the warranty clause and that you don't want that in the lease. I think I understand how that could be trouble for a lessor. I will also read the articles recommended by Nancy. I'm not sure I understand why you would would question my ability to "afford to lease at all". Are there potential costs other than an attorney? Thank you all so much for your good advice. I will eventually hire an attorney before I sign the lease. I would just like to do as much as I can on my own as I know attorneys charge for every little bit of advice.
Bigfoot said:
Julie:
Believe me, I sure understand what you just said and we all know there are no sure things in life. One thing I do know is that these oil Lease Hounds feed off all of us mineral owners since not many of us have the extra money to spend on and attorney and yes this whole process is a frustrating and gut wrenching activity; but, IMHO, if a job is worth doing at all, it is worth doing "right" and signing any official document without extremely knowledgeable help ain't very smart.
A couple of things to consider:
1. Are these people serious about leasing or are they just trying to pick up mineral interest at very cheap prices. Once you have an idea about their motive, you will have a better idea if you can afford to even lease at all.
2. Talk to your neighbors and see what they are doing. For some crazy reason, many neighbors want to keep everything secret and won't share any information; but, some of them or maybe at least one of your neighbors has good sense and will share.
Again, good luck and IMO, this isn't something that should be done quickly or without much thought.
Julie L said:
Thank you so much for your advice. I'm not really in the position to pay an attorney money that I might not get back so am just trying to make sure this is all legit. The more I read the more confused I get!!!! Also, would I just google a oil and gas atty in OK?
Thanks again.....I don't live in Oklahoma. This land man contacted me saying that my grandmother owned these rights. i am the sole heir to her estate so the rights passed down to me. I subsequently found a lease where the land had been leased in 1982 so I know it's legit. I guess my question is, I didn't know I had these minerals and I wasn't expecting the money so what do I have to lose other than more money that I wasn't expecting in the first place. How might I be placing myself at risk by signing a lease. I read in an article about the warranty clause and that you don't want that in the lease. I think I understand how that could be trouble for a lessor. I will also read the articles recommended by Nancy. I'm not sure I understand why you would would question my ability to "afford to lease at all". Are there potential costs other than an attorney? Also, you mentioned finding out the company's motive. How would I go about doing this? When searching online, I find very little about the company, Viper Resources. I think they also do business as Echo Energy. Thanks again to you all for all your good advice. I will eventually hire an attorney before I sign the lease. I would just like to do as much as I can on my own as I know attorneys charge for every little bit of advice.
Bigfoot said:
Julie:
Believe me, I sure understand what you just said and we all know there are no sure things in life. One thing I do know is that these oil Lease Hounds feed off all of us mineral owners since not many of us have the extra money to spend on and attorney and yes this whole process is a frustrating and gut wrenching activity; but, IMHO, if a job is worth doing at all, it is worth doing "right" and signing any official document without extremely knowledgeable help ain't very smart.
A couple of things to consider:
1. Are these people serious about leasing or are they just trying to pick up mineral interest at very cheap prices. Once you have an idea about their motive, you will have a better idea if you can afford to even lease at all.
2. Talk to your neighbors and see what they are doing. For some crazy reason, many neighbors want to keep everything secret and won't share any information; but, some of them or maybe at least one of your neighbors has good sense and will share.
Again, good luck and IMO, this isn't something that should be done quickly or without much thought.
Julie L said:
Thank you so much for your advice. I'm not really in the position to pay an attorney money that I might not get back so am just trying to make sure this is all legit. The more I read the more confused I get!!!! Also, would I just google a oil and gas atty in OK?
Have you considered employing an attorney or advisor on a contingent fee basis? Some will represent you for a fee of a 10% increase in bonus and/or royalty that they are able to negotiate for you. For example, if your representative negotiates an additional $100 per acre, you would owe them $10 per acre and you benefit an additional $90.00 per acre and a more favorable lease form.
well, it MAY be a good idea. The last attorney tried to deal with was interested in $$$ only. Now a month later and price of oil down $25 a barrel, I am certainly unwilling to offer lessor as much $$$. I STILL DON'T KNOW what clauses the attorney MAY want to change!
Ask on the Payne County board about a good O/G attorney in Cushing to read the lease. Ours only charged $125 but added 2 pages of addendum's. But he's no longer practicing - he's now a judge. The depth clause he put in there resulted in an additional 2 yrs of bonus money being paid to us.