In 2016, my sister and I leased several parcels to Continental Oil. We each received a BONUS for 40 acres each in Sec 3, 9N R10E, even though I argued with them on several occasions that we each only owned 20 acres each. We received an Interest Verification from the Oil Co stating we each owned 40 acres. Now 2 years later they want us to pay back 1/2 of the Bonus for over payment in the about of several thousand dollars. They admitted it was their error. We have been given a very short deadline for repayment. What are our rights?? I need help asap. Thank you for any input on this.
This happens enough that I caution people not to enter into lease agreements where the leasing agency ownership varies from the what the owner shows until the conflicting issue is satisfied. Or otherwise protect themselves from ending up in this situation.
From looking at your lease, I’m fairly certain it was not reviewed by an attorney. There is a typo and some things I don’t think would have made it through an attorney looking at it. You entered into a lease with possible known issues of the amount of mineral acres involved without addressing it in the lease language. I did not see an expressed warranty statement, but my opinion is that is was implied. I think that opinion would prevail in court.
You may be dealing with a land company that is being charged back for the problem. If so, make sure you get a Company Landman from Continental involved. Provide documentation to the Company landman that you challenged the acreage being credited and was reassured by THEIR contracted representatives of Continental Resources.
Everybody’s personal situation is different, but I would not have entered into a lease allowing an option to renew the primary term controlled only by the lesee.
Everybody’s personal situation is different, but I would not have entered into a lease allowing an option to renew the primary term controlled only by the lesee.
I suggest consulting with a qualified attorney to address it.
If you don’t want to go that route,
- Tell them to exercise their option effectively making it a 5 year lease. Hopefully you negotiated a 150%-250% lease bonus amount for this extension to the primary term. Tell them to pay up and take the money they owe you from that and send you the balance. -or-
- Offer to pay them back money they say you owe, PLUS the remainder unused prorated portion of the lease. upon them giving you a signed and filed release of lease. (signed by a Continental official authorized to enter into such contracts). Then negotiate a better lease with someone else. They have already sold/assigned your lease, so this may be impossible for them to do. But, they likely made more money off your lease than the total amount you were paid.
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Thank you for your reply and opinion. I know I should have insisted on them reviewing the amount of our royalty again. They admitted the mistake was theirs. They tried to lease where I live and I knew I didn’t own the royalty and finally got them to understand. We, (my sister and I) have retained an attorney but he cannot get them to respond to calls or emails, today I took it on myself to try to get something resolved, we have offered to extent the lease. I appreciate your input on prorating the used portion and releasing us from the lease. I just talked to the original landman, he is going to see what he can do.
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