My husband(dh) and his siblings signed leases with company in Oklahoma. I don't want to mention the company name just yet in case they cruise these forums. The company has been discussed here and most seem to think they are a reputable company. However, the bank draft/check they gave has been returned to our bank and they are not answering the phone or returning phone calls. They have a signed lease and dh's SS#. What recourse do we have?
Lee, I would check to see if the lease was recorded. If the lease was not recorded I would record a statement of non-payment with the lease and returned bank draft declaring the lease null and void and forget about it because I believe that it's extremely unlikely that you have legal recourse.
Is that statement something that would be recorded at the county clerk's office also?
Edited to add: I just called the county clerk and the oil & gas lease has not been filed.
Edited again to add: I have been searching for "statement of non payment" and can't find out exactly what it is. Is it an affidavit?
Anyone? Is this statement something he needs to mail to the drilling company, or file at the county clerk's office? And what is it exactly?
Yes, it's called an "Affidavit of Non-Payment," and is filed in the County Clerk's Office wherever the minerals are located (or in each County Clerk's Office if the minerals are in more than one county).
Thank you!
I think the comments are meant as such: When you lease with a company, the company has exclusive rights to drill your minerals of course. That is why they give you bonus money and a contract. When they are done for various reasons, you have to get a release to end the contract with them from them. If you do not, and you are still recorded as "leased with XYZ" you are not able to lease with anyone else. In other words they own you until they say no more. The exchange of money validates your contract. Nothing is official until the money is in the bank. That is why you should file an affidavit of non payment. It will release you. Just make sure that the contract is not in force. I had this happen with CHK. They made an offer, then pulled it. They were out of money. They came back a year later and paid. It is the name of the game. No apologies, no explanations, no contact.
One other thing I would check. Does this company have a strong lease hold on properties around you? If so, I would wait. You do not want to box yourself in. If someone else comes along, tell them that you received bad money and let the land man handle it through their offices. The serious oil company will do a title search and all will be well. At least that is the way it happens in Texas, simply put. of course you have the option of taking them to court. There are many forums who explain the 8 to 10 year wait to have your say. It is very very expensive to fight Goliath.
Correct me if I am wrong, members, but I don't think oil companies have people on forums to find out who is badmouthing them (which of course this member is not) but I would hate to think big brother is watching here to retaliate in the fields. It is all about money and oil and money and oil and more money with them, which is fine with me.
Ok thanks. We haven't done anything yet. Thought we'd have to make a trip to Oklahoma.
btw, I found this affidavit form online. It says that the lease has not been pooled. What is that?
Should I print the form and fill it in in pen, or retype?
Robert Kennedy has answers for you.Things do happen to get a lease signed.
In our case, the lawyer who formed a Trust in 1998 omitted 2 parcels on the mineral deed,the lessee never tried to find the Trust document where I was Successor, contacted my sister in Laos, convinced her to sign the lease as Trustee [which she had to return to lessee without being notarized;lessee submitted a phony affidavit to the recorder],she had one brother receive and disburse the payments after some of the Trust members ratified the lease [with no money trail from the lessee to anyone authorized to expedite the lease],lessee had our sister ratify the lease 1 year later as an individual, and no matter the fact that 2 Trust members never ratified the lease that should have been handled solely by the valid Successor,there are 6 producing wells done as if there is a valid lease, and the producer referred a lawyer of their choice to our unauthorized sister, which lawyer then expedited a phony mineral transfer in February 2013 seeking to validate it as being subject to the 2009 'previous lease' ,with the now accurately described 1998 minerals put into a 2003 Trust our sister WAS legally authorized to act within, empty for nearly 8 years, after being formed in June 2003 and used solely for transfer of real estate in July 2006.
I haven't found a lawyer to help unravel this mess.
Lee, I would file the affidavit of non-payment with copy of lease and returned draft attached. It's the difference between heading off trouble and needing a lawyer after trouble has started. Your affidavit should show up if they make a final check of your title before committing themselves, which they should do.
Your lessee could be showing your lease around trying to flip it without paying for it and the buyer would not know that it had not been paid for. It's happened more than once I assure you. Recording the affidavit, it's what I would do, knowing what I know now. It's proactive and cheap and while I am not absolutely certain it will save you trouble, in the worst case situation I think it would.
Right now, the fact that they did not pay you is between you, us and the wall. A potential assignee would have no way to know.
BTW, thanks to Pete Wrench, I meant to say affidavit of non-payment. I have been snowed under with paperwork lately. If you labeled it as statement of non-payment, it would have the same effect of giving notice because the body of a document determines what it is regardless of what you call it.
Dear Lee,
Pooling means that the Operator combines your minerals with some of your neighbors' minerals in order to form a drilling unit. This is unnecessary for a vertical well if your acreage exceeds the minimum specified in the Lease and/or set by your state's regulatory agency. But rarely can an Operator lease from one single mineral owner all the mineral acreage they need to drill a horizontal or directional well in the configuration that likely will maximize production, therefore pooling is very common, although not required, for those types of wells.
The document that you uploaded is not suitable for your needs, it is what one would file to show that a valid Lease that already had been filed in the public record EXPIRED on its own terms, usually for the non-exercise of an option to extend the Lease by a period of time specified therein, and any claim by the Lessee or its successor or assign to the contrary was false and invalid. The Lease that you executed has not expired, so you would need an Affidavit of Non-Payment of Bonus Consideration instead, which would be worded differently than the document you uploaded.
Filing the Affidavit of Non-Payment would be of benefit to you, even if the Lease that you executed is not currently on file, because you don't want to have to keep checking the County Clerk's Office every week or two for the next two or three or five years to see if for some reason the Lessee went ahead and filed the Lease, and you sure don't want to NOT check and then discover months or years later that the Lessee did file it and because they did you never heard from any other potential Lessees. If you file the Affidavit, then you can sit back and wait for somebody else to contact you, or go out there and market your minerals to Operators yourself. I have done that successfully before.
P. W.
P.S. I have never seen a copy of a bogus Lease filed along with an Affidavit of Non-Payment, instead the Affidavit typically just makes reference to the Lease by date, legal description, and Lessee, but I like R. W.'s suggestion on that. I am not similarly convinced about including a copy of the returned bank draft. Those typically have some pretty specific bank information that a Lessee probably won't want floating around.
Actually Pete, the two dishonored drafts I have had returned didn't have any...of my bank information on them. As for the other sides information, I'm evidently not doing business with them if the draft is returned dishonored so I really wouldn't care. I suppose if your bank has a different process you could make a copy of the draft and mark out your personal information. A picture is worth a thousand words and I think better than a description especially with those nice stamps the banks put on them.
R. W., I was referring to the Lessee's bank information, not the Lessor's. The bank drafts I use have a specific bank account number on them from which the funds will be withdrawn to pay consideration to the Lessor, and another number, I can't remember what it is, maybe an ABA routing number but I just don't recall. But even if you're not doing business with them, there is still such a thing as common courtesy.
Thank you all. I'll find the right form and attach the lease and draft. That sounds good to me and dh agrees.
Pete, common courtesy does not apply in my two instances, if I extended any courtesy to them at all after their actions, it would have been pure charity which I think in their case would not be warranted. I guess if they have to worry about a routing number they should stop sending out drafts to dishonor.
I couldn't find the specific form, so I wrote this. Can you tell me what should be added or taken out?
**
Affidavit of Non-Payment of Bonus Consideration
State of ____
County of ___
Before me, the undersigned authority, on this day personally appeared ______, who, being first duly sworn, upon his/her oath states:
My name is _____, and I live at ________. I am the lessor who entered into an oil and gas lease with the lessee ________ located at ______.
The lease is for property in ____ County, Oklahoma, described as follows, to wit:
Lots ______ including all accretion and riparian rights thereto
Section __, Township ___, Range ___, and containing ____ acres, more or less.
The lease, dated ____, 2013, was signed ____, 2013, and the accompanying bank draft from ____ was deposited that day.
(See attachments)
Phone calls to ____ have been unanswered and not returned and the lease has not been recorded. The bank draft has been returned unpaid, which invalidates the lease.
This affidavit is filed for the purpose of declaring the attached lease null and void due to non payment of bonus monies.
Signed this ____ day of ____________, ______.
____________________________________
(signature of affiant)
State of ________________
County of _______________
Sworn to and subscribed to before me on ___________ (date) by _________________________ (insert name of affiant).
____________________________________
(signature of notarial officer)
(Seal, if any, of notary)
____________________________________
(printed name)
My commission expires: ________
DL?
Another question. I'm leaving for OK tomorrow. Do I send a copy of this to the company or just let them discover it should they decide to file the lease?