Bonus Payment Run Around

The company we signed our mineral lease with back in late June has been promising a check for the past 3 weeks. As of this writing, we are forty-six (46) total days and thirty-two (32) "business days" from the actual signing. Excuses abound. We are now reaching out to the legal community and several fraternity brothers who are legal beagles have begun to offer (free) advice. The questions I have; if we were to go back to some of those who offered similar pricing and terms and end up with one of them, can they in turn registered the lease, pay us the bonus and become the Lessee of record? What repercussions might the original "Want A Be Lessee" have against us?

1. Did you have a good exhibit A which did not warrant the lease?

2. Did you correspond by certified return receipt mail?


Check the fine print in the Bank Draft. You will likely find that the banking days mentioned may be 60, 90 or even 180 banking days of time to flip your lease without payment for it. On average there are only 18 banking days in a month. You do the math. Show your legal beagles the draft. They will help you set a date for payment.

They may also be able to tell you what difficulty you may be in if, in the meantime, your lease is recorded or how to provide public notice that the lease is void. Avoid taking anything that looks like a top lease. A top lease could mire you in major legal issues and delay payment even more.

Read and understand a lease before signing and have the money in the bank before delivering a lease. Read MRF. Lessee's are not in business to benefit mineral owners. The "meek may inherit the earth" but not the mineral rights.

Gary L Hutchinson

Minerals Managment

Hi, Skipper -

Sounds like you've gotten yourself into quite a predicament. I have heard of instances where companies have refused to pay the Bonus, but still claimed the lease was valid because of the "other valuable consideration" language. They claimed that the "possibility of the drilling of a well" constituted OVC.

You need to Lawyer Up and demand that they return the lease if they have not filed it of record or that they file a Release of Lease of record if they have. Then move on.

You are fortunate that you have several friends willing to help you.

It sounds to me like they are trying to sell ("flip") your lease for a profit. That in itself is not illegal, but I believe "Cold Drafting" someone is (Giving them a Draft when you don't have the funds to back it up). Did you even receive a Draft or just the promise of a check?

What's the name of the company and where are they leasing? Information like that might help some of the others here on The Forum to watch out for them.

Charles Emery Tooke III

Certified Professional Landman

Fort Worth, Texas

I don't know what question 1 actually means regarding a warrant of the lease.

We have not. Text messages only between me and the "Agent". That will change on Monday if the funds have not been received by Saturday.

Thank you for taking the time to respond!!

The lease appeared to be of the same wording as previous leasing, but with a stronger Appendix A to take good care of the land.

Lawyering up on Monday if the funds not received.

Thank you for your time!!

Thanks, Charles!!

The name of the company is Rojo Energy Holdings of Dallas, TX and Cheyenne, WY. We understand that anyone, and probably everyone, flips the lease. Heretofore (since 2002) we have not had any problems with the several leases we have executed and have been paid within days vs these guys.

In fact, I only knew one of the companies talking to us. In hind sight they would have been better since we have been leasing our mineral rights to them though they never put a bit in the ground.

Now I'm mad, but calmly so. Will lawyer up, as suggested, on Monday, assuming we do not receive the check by Saturday and work to shut them down.

Thank you for your thoughts and time spent responding, Charles!!

The mineral owner should put this next to their signature on the lease:

Lease automatically expires if bonus payment is not received and deposited within 90 days.

Succinct wording I will not forget going forward!! Again, none of the previous Lessee's were a problem and I neglected to put wording in this one. Thanks very much for your advice, Robert!!

I have since revisited the Lease document and we did not "warrant" the Lease.

I thought up an even stronger wording; someone might even have better adds than this:

Lease automatically expires if bonus payment is not received and deposited within 90 days.

Lease becomes on valid only when filed at the court house with timely proof of payment attached.

Bob Malone, Malone Petroleum Consulting

This dialogue leads to more questions:

30 days seems more appropriate to me. Is there a reason you selected 90 days?

Why have you inserted "and deposited"? Is there an acceptance of the Agreement that comes as a result of depositing the check?

It has occurred to me that every legal document I have signed also included the signature of the entity with whom I was contracting with. In this case, the "want a be" Lessee, Rojo Energy Holdings, LLC, has not signed. Is it a legal, enforceable document if they don't sign?

Tomorrow we begin the process; I'm contacting Canadian County to learn whether or not the lease has been filed. My brother is presenting our case to a lawyer.

Our history with the five previous Lessee's contained very similar wording in every aspect and the "promissory note" did not include any dates. All paid well inside of thirty days. It only takes one bad apple to spoil the barrel!!

Actually, the way it is supposed to work is that you take the signed and notarized lease and the draft down to the Collections Department of your Bank. They hold them, contact the company and tell them that the 30-Days or whatever have begun to tick off and when they receive the money they deposit it in your bank account and mail the company the lease.

That's the way all leases and drafts used to be handled.

Wonderful! The oil company does not get the signed lease until payment is received. This method should be required by all mineral owners; otherwise, they don't sign. Looks as if you have nailed this heartbreak! All great suggestions are appreciated!!

Bob Malone, Malone Petroleum Consulting

That's the way it was done since very early in the history of the industry. People have just gotten into the habit of asking for checks to avoid the costs of the two banks. The last time I used this method was probably 10 years ago and each bank wanted to charge up to something like $75 per draft. We got so many complaints that the company had to agree to pay the fees.

I'd pay 2++ times $75 to prevent non-payment of the bonus.

We were mainly receiving complaints from people who's drafts were under $500. The company understood and covered the charges.

The fee is a highly-intelligent form of insurance to protect the mineral ownership that is about to disappear.


I like your first line regarding deposit within 90 days, but not sure about your second line. That would mean you would put the amount you received for the bonus on co clerk files, not a good idea.


They don't want to pay the cost of a collection department any more.

I always put in my leases that they pay the collection cost. They didn't like that, so now my attorney holds the lease till the money is released.