We’ve been sent a lease offer. We would like to counter the offer. Do we draft a new lease, sign and notarize it and send that back to the company? OR do we strike through and add our verbiage, sign and notarize and send back?
Thank you.
I start with attempting to agree on the basic terms: royalty, bonus, and term length. Once that is accomplished I generally forward a proposed Addendum and request their OGL form. Since you already have the form, You can either redline the sections you want to omit or change and submit with your requested changes. Do not execute the OGL until you have a document that is acceptable to both parties.
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Thank you for replying. Will redline and attach addendum.
Do not send an executed lease without getting paid at the same time. Lots if discussion on this point in other threads.
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I never amend a lease and send it back. I communicate with the landman in writing for the exact changes I need and have them revise and resend a new lease.
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Thank you for replying. Sounds like I negotiate docs first, agree to sign, sign/notarize and do not send until funds are received.
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Thank you for your reply. Will contact the landman with revisions.
Why would the lessee send a check to the lessor without having a signed mineral lease in hand? What protects the lessee in the event the check is cashed but the oil and gas lease is never returned or it is revised to reflect a higher royalty interest? Thanks
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It is unfortunate that there are a number of bad actors who will not hesitate to defraud innocent, trusting mineral owners. Too often the mineral owner sends a fully executed original lease and is never paid. If the lease is recorded and perhaps assigned, then the mineral owner’s only remedy is to sue. Or the mineral owner sends the fully executed lease to a lessee who has not finished title research and then may be paid on a significantly smaller net mineral acres, which may or may not be accurate. One solution is to arrange for a bank or attorney or other trusted third party to hold the executed lease and to only release it to the lessee upon direct exchange of the bonus funds. That protects both sides. On this forum, there have not been posts about mineral owners defrauding lessees so I have no idea how common that is.
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This a case for “Good fences make good neighbors”. Most companies have no problem with providing proper sureties to lessors. Many banks will process a OGL and draft for a minimal fee for the protection provided. If you bank does not offer that service, then possibly you can find an attorney to act as a holding agent. If that is the case, your cost will increase. I encourage people to know what your ownership (net acres) is in a tract. I lease on a fixed amount, not a net acre amount that can change based upon a landman’s examination. In the event of production, a DOTO will be performed in order to establish the proper NRI.
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Ive never worked with anyone on this forum, Im old and dont care who gets paid what and want everone to make as much money as they can. I will say that I know of Tim Dowd that posts and his word is gospel and as respecred as they come. But there are just as many “bad mineral actors” out there as well. The majoroty of the mineral owners on here have no idea what they own, they come on here and say this company is bad is bc they didnt pay me what they owed me bc I had a 1/4 interest in 160 acres that my grandaddy owned, but they have no clue about the prior title transactions, end up only owning 1 acre out of the 40 acres interest and come here to rant likey they own the property when they clearly dont. Then 75% of the people say hire an attorney, they wil fix it for you, then the attorneys cant bc it doesnt align with the facts given and come back asking more questions. This site is starting to get a bit uncomfortable. This is not that hard folks, send your mineral deed or oil and gas lease with a COPY stamp on it, if you dont want to spend the money to buy one, use a red magic marker to write Copy on every page and tell them you will send the original on upon closing.
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Most mineral owners who inherit mineral rights get very few chances in their life time to have the opportunity to lease their rights. State laws differ. When you are being approached it would be a good idea to have a lease that you would sign to counter their offer. I know it is not that simple, but it is a whole lot better than all that “back & forth”, you have to start somewhere. Trying to deal verbally only usually prolongs the problem.
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