I hear ya! This lease will be in force long after I am gone so getting quality legal advice is important. I was just curious about the language. One word can change the entire meaning and the addendum’s are a true nightmare! One needs to get educated but also seek legal help. I appreciate everyone who posts here. Knowledge is priceless THANKS
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What is your take on a scenario where the last couple of leases yielded no drilling/development whatsoever? A current offer shows up. Do you push for higher bonus based on this historical outcome? Is there any way to gauge intent to drill prior to signing a lease?
That is some true property management nuance @TKLand. I would look at the company in detail. Time and research are your friend. I have a practice that each of our properties gets an annual review. That review is not based on activity, producing or not producing. We have many properties covering several States, so I have a great deal of this automated for the review process.
Obviously I also perform a detailed review when considering any proposals and that annual review provides greater depth. When dealing with a magician, watch the hand he is not showing you. Our practice is we require brokers to disclose their principals prior to any OGL. That alone will help you with intent. I have known many people that have done very well by leasing a property for bonus multiple times, so I cannot say that is a poor practice.
Today financial requirement results are tantamount for a company to raise development capital, so OGL plays are much less common. This does not mean that if you are leased that there will be development, but that is more common today. Remember time and research are your best friends.
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