A Landman told me that he has flown to meet someone to hand them a check for a signed lease. What are other ways to make sure the dollar amount does not change "after their research" and that you get a check within a week?
Mary:
Normally, in my experiences, the company allows several weeks to research the records to verify the correct mineral owner is on record. You can always let your bank act as a middleman in the deal by sending the company a "copy" of the lease, not an original they could file. The bank holds the original lease until they recieve the bonus money and when this is recieved , they mail the original copy to the company for recording. This procedure will not allow the company to "cold draft" you.
Don't agree to anything until they have completed their title work. Then you both know where you stand. Now you can exchange a check for a lease.
so, I'm waiting for the final draft of the lease papers etc. finally get them and have them signed and tell land man my bank will send you these when you send them the check and when it clears? does the name of the company matter? does a well know oil company pull these stunts also? have considered doing what is talked about in this discussion. by the way, EOG is wanting my mineral rights in Karnes Cty. so many things to consider before the final deal is set. thanks for all input and will think about what I will do.
Yes, some large, well known companies will do the same tricks. If it helps any, I hear that EOG pays royalty when and how much they are supposed to, except in one instance I'd heard of where there may be a title problem. I think that qualifies as high praise coming from me. Good luck in your dealings and remember that an ounce of prevention is better than an expensive cure, get cash before you hand over an executed lease.
Dear Bob,
I agree. EOG honors their agreements. Prior to that, you must protect yourself.
In my dealings, still the best way is "Quid Pro Quo". You give me my FULL bonus check and I'll hand you the signed and notarized lease. I cannot stand it when oil companies try to give you 10% of the bonus then go run the title correctly and pay the rest. This 10% down and/or bank draft method is complete B.S. and a poor mans way to run a business. If you can't afford to pay me all the bonus up front, or you aren't 100% sure of the title, then wait until you are cause it just creates a mess for both sides in the end. The large oil companies like Devon, EOG, Laredo, ect. will almost always pay all of your money up front in exhange for a signed lease if you ask them to. I do not feel comfortable telling and recomending this to everybody, but when Oil companies will not pay my family all the bonus money up front then we tell them "No Deal!" And it has worked in our favor every time.
Mary,
How the Oil Companies handle the payments with the mineral owners is extremely risky and I wasn't about to go along with them giving me a worthless draft for my executed lease!! Chesapeake is a prime example this!
This is how I did it (thanks to a lady on the forum here) and it worked out very smooth!
The Oil Company completed their title search (only took a couple of days) to make sure the title was clear then, once all the details were worked out they sent me the lease, I had it reviewed then, took it to get it notarized then, scanned a copy of the executed lease and emailed to them, so that they would have a copy of my notarized signature. They sent me a "cashiers check" which, I cashed and then, I mailed them the original lease by certified mail with return receipt!
It is just not good business to trust anybody with a signed lease before you have the cash in your hand! There have been too many times that leases has been recorded without the bonus being paid leaving you holding the bag with nothing, but a clouded title! If that were to happen, you may end up having to retain an attorney to get the title cleared and while all that is happening, you could end-up missing out on better lease with another Oil Company! It's just not worth it!
I have no idea who came up with this "brainstorm of an idea of a draft" in the first place, but believe me the oil company would never do business with you this way and hand you an executed lease for some worthless draft!!
Best way is $cash$ in hand, so to protect yourself and prevent any headaches on down the road!!
Good luck!!
Susan,
I agree with r w, he knows what he's talking about here! Also, keep in mind if you read the "addendum for payment" (may be called something different with other companies) its conditionally drawn up to where "nothing" assures you of being paid! In other words, if they can get you to sign the lease and send it back to them, they can record it without paying you as I described to Mary or they can tie you up for 30-days (according to what you execute) and then, dump you and decide not to lease after-all!
They are only buying time with these drafts which, gives you no protection of anything! I have never seen anything this crazy in my entire life and I've been involve in alot of creative financing, but this one takes the cake!! lol
Oh! Some of the well known Oil Company's are the worst, not all of them, but Google them with the different tags first to check them out!
Good luke!
Susan E Hallmark said:
so, I'm waiting for the final draft of the lease papers etc. finally get them and have them signed and tell land man my bank will send you these when you send them the check and when it clears? does the name of the company matter? does a well know oil company pull these stunts also? have considered doing what is talked about in this discussion. by the way, EOG is wanting my mineral rights in Karnes Cty. so many things to consider before the final deal is set. thanks for all input and will think about what I will do.
I asked the land man how EOG would pay and he said a check. they don't do bank drafts as they cost money and take to long, 30 to 60 days. let me know if I have that right. I still don't know if I really trust the big guys either. After all, I have what they want and they contacted me first. don't want to make to large of a wave but only whats fair for me. thanks for all the input.
Susan,
We have signed several leases with EOG in the last few years and they have been " straight-up" on paying the bonus with a check using the process that Kaye describes above.
Good Luck!
Susan,
Don't trust 'any' oil/gas companies, large or small. They are not looking out for your well being, although some have better credentials than others. Chesapeake has got to be 1 of the worst. With all the lawsuits they have against them, should tell the story. And now several states and the Federal government is after them. Good luck.
Clint Liles
Hello Mr. Cotten, What are the best ways in your opinion to protect yourself when exchanging the signed lease for the agreed to amount? Thank you, Randall
Buddy Cotten said:
Dear Bob,
I agree. EOG honors their agreements. Prior to that, you must protect yourself.