Doreen,
First, welcome to the board. I am sure you’ll find a lot of useful information and helpful people here. I am a land/mineral owner from Michigan that was involved in the CHK lease cancellations that are in the article that Kevin Koonce posted back in January.
Could you provide a little more detail about your situation:
-
You say your bonus was $4,400. I suspect that was total (for all 20 acres), correct?
-
25% royalties is very good.
-
3 year lease is good. Does your lease include an extension option? Hopefully not.
-
The important question: how were you paid? Was it a Sight Draft, Bank Draft, or Order For Payment? It is here that you would have some risk. Your lease may also be written in a way that gives them the right to not honor the payment method and permits them to get out of the lease.
You also mention that CHK having a “standard lease” - does that mean that you signed their lease without any revisions or use of addendums?
And lastly, you state they are “breaking ground” - do you mean that they told you that they would be drilling your land (on your 20 acres or you in a drilling unit or just somewhere they would be drilling) by July 12? Do you have anything in writing, in your lease, that says they would be drilling your mineral acres by July 12? Sometimes the promise of drilling is used as a tactic to get people to sign leases and doesn’t actually occur as promised.
Is LaSalle an active area (with drilling and production)? Or is it on the outskirts of a productive area?
Wilson