Is my lease valid

This property currently has vertical producing wells on site and we currently get royalty checks, however a new lease contract was mailed to us about two years ago, and I had some questions. None of us signed the lease and it was put on a back burner until recently. The History:

Grandma set up a trust for my mother. My mother signed a lease and now we don’t know if she had the legal right to sign. The land should have been in the trust. But we don’t know how to prove it.

July 2008, I informed Bluestone Energy Partners that my Mother had passed away recently and asked that the checks in her name be redistributed to her three children. I had also asked to renegotiate the lease. from Bluestone informed me that this was a transfer of royalties only and that the lease had already been signed and the land was currently being drilled. The money from the lease would be passed on when a"Division Order" was signed and returned, but no new negotiations would take place. I accepted this answer and signed a “Division Order” dated February 12, 2010 with an “Effective Date” of March 13, 2006. We received one large and began getting monthly checks for around $500. (Note: Why would they back date the effective date of the transfer order?) Also after the fact I realized the division order we singed was incorrect. The divination order said we owned : Oil:1/3 of ¼ OF 1/8 1/3 or 1/8 of 1/8 Oil The county tax accessor said we own: Oil: 1/3,1/2,1/4. Gas & Coal 1/3,1/2.

Q:What do you make of that? Is it too late to fix that?

November 2010, I receive a new lease from Bluestone Energy Partners with a letter stating that they wanted to sign a new lease to help clear up any confusion as to the interest originally owned and that they wanted to drill a horizontal unit. Blue stone stated that some of our mineral rights were passed down through the Trust my grandmother set-up for my mother, Other mineral rights were passed down outside the Trust directly from grandfather, to my mother. (We don’t know what went where.)

Whatever their motive and reasons, we received a new lease. I contacted Bluestone and asked to renegotiate; and that this was defiantly a lease they had sent me. Blue stone said this was more of a formality of organizing the paperwork into a neater stack and that no negotiations were going to take place. I told them I couldn’t sign any such paperwork as I did not agree with it. Bluestone informed me that everything would stay as it was and we would leave it at that.

February 2011, Bluestone Energy Partners has been sold or changed their name to Antero Resources Bluestone LLC, but kept the same address as the former Bluestone. Our royalty checks went from $500 to less than $150 a month

Antero dosehave a copy of the original lease my Mom signed back in 2006, but the trustee signature is not along with it. They have not been able to provide a copy of a twice signed lease. If only Mom signed, the contract would be invalid, because the property should have been controlled by the my Grandmas Trust. That is, If they both needed to signed?

I think they should of had 2 signatures and here’s why: Why would blue stone hold back on roliyies? Why would they need our signatures in the first place? Why would they only agree to send a bonus check if accompanied with a back dated contract or lease? Why would they wait to drill there horizontal well.

(Of course even after I said I would sign a back dated contract, they never made an offer) ( bluestone claimed money in escrow for the first two years now, they say there is nothing there.) Anteros Landsmen said that they were waiting on our signature to drill a H well. But that could be a ploy also. If that were true Antero would be more motivated.

Anyway, When speaking with Antero they implied that the contract might have been signed by just mother, and was asking something about back dating contracts. I would like to find board certified oil and gas attorney to look into the matter for us and see if there is any further action we might take, such as renegotiate for better terms including bonus check, 15% royalties and the same items we negotiated on our other lease. Do oil and gas attorney ever work on % of contract signed?

We would all like to see this mystery solved, if it can be renegotiated and how much is in the escrow account.

The escrow account maybe a ploy for us to hurry-up and sign so we can get this ??? money.

My grandmas Will, which set up a trust for my Mother. My Uncle (Mom’s Brother) was made the trustee. So, now the question remains Q: whether we have to sign the same contract our Mom signed years ago, or was it “not legal” because only Mom signed and it should have uncles signature also. Also how do we get the division order fixed?

Do we have any grounds for renegotiation? If so how do we prove it? Also yesterday a man called wanting to buy my mineral rights. I don’t want to sell especially if there is money in escrow. But right now I’m not getting anything from Antero.

The land that Antero is setting on is called Reagan’s Run.400 + acres owned by my WV family and myself my portion is The county tax accessor said we own: Oil: 1/3,1/2,1/4. Gas & Coal 1/3,1/2. Also my sister has an equal portion and we negotiate together. In Doddridge.

Thank you for taking your time i understand that this is a very long Letter. and this is a very big mess. I would be so grateful to get an informed opinion on this mess!

Katy,

Didn't you say the current "lease" is invalid? If that's the case, you have every right to lease to another company. Selling is an option but I wouldn't sell until I exhausted all chances of a good lease. If, in fact, the going rate for a lease is $4000.00 per ma, you must be in a very hot area. How much is the independent offering? As far as I know, the price per ma when you sell is much higher than the bonus rate. How much did your brother get for his share? I don't understand what an old well on the property has to do with the drilling unless they want to drill in the same place. I know I've asked several questions, but take your time and answer all of them so that people here will have a better understanding of your situation. I wish you all the luck.

Yours,

Wes Luke

"Going rate"? If you mean the going rate as heard at the local coffee shop then the $4000/acre price you heard is probably not "right." This is because coffee, while being consumed in the presence of others in a local "shop," tends to cause folks to express overly-optimistic views on the value of the mineral rights in their area, especially when referencing those of "third cousins" or other people they barely know who they "heard" received an offer. This seems to happen even with decaff. Strange.

Sounds like the company you wrote about may simply be asking you to "ratify" the lease your mom signed, which perhaps means it's not a "bad" or defective lease, but rather one that they simply want you to give formal consent to. On the other hand, if they really do have a "bad" lease as in your mom was not the actual owner at the time she signed the lease or something, then I'd say they need to negotiate a new lease with whoever IS the current owner. To determine if the lease is valid or invalid I'd suggest getting the opinion of a local oil and gas attorney if the potential money involved justifies it.

To determine what values other companies might be paying for leases in your area could be a challenge, since that information is not generally made public. You could of course ask others in the area what THEY were offered for a lease bonus, though sometimes people are a bit hesitant to do that (though I think if more people were willing to share such information, more people would get better deals on their leasing.)

Alternatively, if you are thinking of selling, or trying to determine whether an offer you've received is fair, the best thing to do would be to learn a little about how buyers value minerals they're thinking of buying, at least in a general way. The Mineral Hub website has a mineral rights Blog entry that's very popular entitled "Oil and Gas Leasing Tips" and the FAQ pages on the site also includes an answer to the question of "What are my mineral rights worth." You might check those out if you're thinking of selling or negotiating a lease deal. I put up the site a few years ago because I was getting a lot of questions on those topics from people wanting to sell or lease.

Hope this helps you out!

Frederick M. "Mick" Scott CMM, RPL

If the going rate is $4000/acre for a bonus, and you have enough acreage, you could probably find a lawyer who would help you clear title so you can lease to whoever you want to.

Wade,

I have serious doubts about the $4000.00 bonus. But, if that is a good number, 36 acres is enough to get her almost anything she wants. She just needs to put forth the effort. I doubt she has a lease with the company that has been, in her words "stonewalling" her because they could have been making much more by signing a good lease. They sound like scam artists to me. I wish we knew the company's name. Sounds very much like CHK, doesn't it?

Yours,

Wes Luke

Wait a minute here, I'm confused here about one critical issue. You said that they wanted you to sign "back dated contracts." Do they want you to sign a back-dated OIL AND GAS LEASE? If so, that is an indication to me that they might have drilled a well already and only now have realized that they screwed up and did not have all their proper mineral owners leased. If that is true, then you are in a very enviable power position vis-a-vis the oil-and-gas company, and absolutely should NOT sell your minerals because, if the well is successful, you are about to enjoy the benefits of mineral ownership: a royalty stream of income. So you need to do whatever is necessary to determine whether or not the company approaching you has drilled a recent well on the tract of land underneath which you own a partial mineral interest. Check with the state regulatory agency that has jurisdiction over the oil-and-gas industry in the state where the minerals are located. If there is a recent well on this tract, then you should seek legal advice from a qualified (preferably board certified) oil-and-gas attorney about how to maximize your financial benefit.

Independent gave 25XX.xx And 5XX.xx to another. However, I don’t want to sell at that price. 4000.00 might be too high.

Can independent buy mineral rights, if Antero might have a claim? Independent would have ran a title search of property before sending a check, Right? So if independent can buy than min rights. So the rights must be mine to Sell OR lease to another company? Or is he buying the rights and all leases that might be attached? Is it odd that the independent contacted us out of the blue? Could he be working for Antero?

Katy, it sounds to me like the trusts interest were never leased, that there could well be a suspense account with a large sum of money in it. I have had oil and gas lawyers tell me that they would work on contingency, I don't know if the ones near you would, unless they could turn up some juicy information quickly. In my case I already had the juicy information which allowed me to take care of one of the issues myself. Depends on what you have and on the lawyer. Good luck.

Katy, a buyer would be buying the mineral acres encunbered with the lease, if any of it were unleased he would be buying it without the lease and would probably include language that would give them any money held in suspense, essentially buying your acres from you with your own money. It happens all the time.

Katy said:

Independent gave 25XX.xx
And 5XX.xx to another.
However, I don't want to sell at that price. 4000.00 might be too high.

Can independent buy mineral rights, if Antero might have a claim?
Independent would have ran a title search of property before sending a check, Right? So if independent can buy than min rights.
So the rights must be mine to Sell OR lease to another company? Or is he buying the rights and all leases that might be attached?
Is it odd that the independent contacted us out of the blue? Could he be working for Antero?

Thank you all for your time! Great info all around I just changed the topic from : Should I Sell? To : Is my lease valid? It’s a little more info :slight_smile:

Wade Caldwell here is a lawyer. He can give you good advice. Call him.

My brother in law just sold to a very good company. He is very happy with the price and the entire transaction. The buyer can figure out why or whether or not your paperwork is a mess. They use lawyers and land men. You can write to me at kukile@hotmail.com . I can give your their name and number.

Did they want you to sign a back-dated Oil and Gas Lease?

Pete, I would almost gurantee that they wanted her to sign a lease backdated to first production, or to when her mother executed the lease that may not be valid. I believe that is the only "contract" at issue here.

Blue stone never sent me a back dated lease. But bluestone said over the phone that the ONLY way they would give a signing bonus would be acompanyed by a back dated lease. However, when I said that I would be willing to sign a back dated contract, BS never made me an offer.?? Years ago , an attorney say that I had a case. but it could take years to solve and might be more trouble than its worth. ?? Sigh Thank you for your replys.

I don’t have a survey of my land or what’s under it. Dose anyone have any idea what a common asking price is to sell mineral rights? Any rule of thumb? Exsample: 2 X leases price? Thanks all Happy Easter

Katy, if the property ever changed hands in a sale, there is a survey somewhere, probably describing the property in metes and bounds.

Katy said:

I don't have a survey of my land or what's under it. Dose anyone have any idea what a common asking price is to sell mineral rights? Any rule of thumb?
Exsample: 2 X leases price?
Thanks all
Happy Easter

Before you think about selling your mineral interests, I think you should invest a little more time and a little coin and find a mineral manager / landman or lawyer to really examine the legalities of your issues and explain your options. You have multiple legal issues that need clarification, and it does not appear that you have a case where it is not worth spending a few hundred dollars (if necessary) to get the clarification and figure out how to resolve the issue with the royalties and your lease. There is money on the table in your situation, and it is still producing monthly royalties. Even if you try to sell now, the legal issue would likely need to be cleared up or else someone could come back on you later and it may cost even more to quiet title if it was the result of a lawsuit down the road. There is another topic active on the forums right now where a guy sold his minerals but he didn't do the title work correctly and wrongfully deeded mineral rights he did not own, as well as some he did own. Now the buyer has frozen the seller's bank account and is requesting a significant portion of the proceeds back.

I found out what mine was worth by my brother in law selling. Use a reputable buyer. They told me where it is, what it is and how it is. They searched the title. Once it hits a ceiling, the buyer will walk and that is where you know how much to sell it for. You can run around chasing your tail for years with hundreds of opinions but when it is all said and done, it is worth what someone will pay. There is the KISS principle.



r w kennedy said:

Katy, if the property ever changed hands in a sale, there is a survey somewhere, probably describing the property in metes and bounds.

Katy said:

I don't have a survey of my land or what's under it. Dose anyone have any idea what a common asking price is to sell mineral rights? Any rule of thumb?
Exsample: 2 X leases price?
Thanks all
Happy Easter

no no - many times lease price.

Cookie Gartner said:

I found out what mine was worth by my brother in law selling. Use a reputable buyer. They told me where it is, what it is and how it is. They searched the title. Once it hits a ceiling, the buyer will walk and that is where you know how much to sell it for. You can run around chasing your tail for years with hundreds of opinions but when it is all said and done, it is worth what someone will pay. There is the KISS principle.



r w kennedy said:

Katy, if the property ever changed hands in a sale, there is a survey somewhere, probably describing the property in metes and bounds.

Katy said:

I don't have a survey of my land or what's under it. Dose anyone have any idea what a common asking price is to sell mineral rights? Any rule of thumb?
Exsample: 2 X leases price?
Thanks all
Happy Easter