Does the 30 to 45 business days time limit on a sight draft mean anything?

Does the 30 to 45 business day time limit on a sight draft mean anything other than that they can’t honor an expired draft and pay you that way? Even if it says on the sight draft that it is tendered as consideration for the executed lease ? Are lease aquisition companies allowed to hold the lease you executed for 6 months to a year or more and then record it even though they never paid you ?

They can not hold your lease unless they pay. If they do not pay the draft and they recorded your lease they would need to record a release of Oil and Gas Lease. Be careful on the 30-45 buisness days as well. Holidays can prolong the time frame.

Thank you for the reply, Mr. Ekblad. In my personal case I executed a lease in may of 2010 and haven’t been paid. The other two i hadn’t been paid for are from 2007. All 3 were recorded.

Mat Ekblad said:

They can not hold your lease unless they pay. If they do not pay the draft and they recorded your lease they would need to record a release of Oil and Gas Lease. Be careful on the 30-45 buisness days as well. Holidays can prolong the time frame.

Doing a bit of checking, if you are speaking about the A Corporation out of Bismarck and their lease for your McKenzie lands. They are usually pretty good about paying. I am assuming that you placed a call in with them asking what the deal was, but once again, if they did not pay the draft and recorded the lease the lease should be released.

Thank you again, Mr. Ekblad. Frankly, I’m done with them. If they can’t pay on a timely basis, I wouldn’t recommend anyone do business with them. I last talked with them 2 months ago and all they were interested in was whether my brother, who has equal interests to mine, had looked over their proposal. Essentially my brother decided not to lease with them because they didn’t pay me. Since my brother just recieved a division order, it looks like they made a bad business decision.

Mat Ekblad said:

Doing a bit of checking, if you are speaking about the A Corporation out of Bismarck and their lease for your McKenzie lands. They are usually pretty good about paying. I am assuming that you placed a call in with them asking what the deal was, but once again, if they did not pay the draft and recorded the lease the lease should be released.

They still should release that lease if they did not pay the bonus. That is the law. We had alot of that happening in Williams County in the past 2 years with a company named Bakken Exploration. They ended up releasing around 5,000 acres of leases. I hope you understand that one bad apple does not reflect the crop.

If your brother would like to get something done if he has not done a lease, I can line him up with a good company.