Lease for Caddo County

I received a lease from Red Ball Express Resources,LLC for Caddo County Section 31- 09N-09W. Has anyone else received anything for this area of Caddo County from Red Ball Express?

Thank you

My offer from Red Ball for 31-9N-9W is $725 & 3/16. They also insist on a 2 year option.

Red Ball is actively trying to lease in Caddo. Suggest that you use the search option above upper right and follow the threads. (magnifying glass) Quite a few comments are available.

Most items in the lease are negotiable. I would not do a two year lease option. If you have not leased before, the draft lease from most land agents is not “mineral owner friendly” and needs significant edits. It would be wise to get a good oil and gas attorney to look at any lease and make changes more favorable to you. One can also wait for pooling if it happens. The two year lease option implies they are “holding”.

I leased with them nov 2022 in 34-10- 9 3/16 3 years. Don’t give them the 2 year option.

I chose Option #3 which is $500 & 1/5th. For some reason I am nervous and haven’t got the lease notarized or sent back yet. I actually think it has been over The 30 days so the offer is probably void.

Thank you…… What does “holding” mean?

The draft lease they sent is probably not in your favor. Get an attorney to review it. This group is either working for another operator who will do the actual drilling or leasing on a strategy and holding the leases for a time and hoping to flip to someone else.

I recieved an offer from Red Ball was sceptical about the Company . I checked with Caddo County and was told there were no recorded leases under that company name. So I havent signed with them.

Red Ball files Memorandums rather than the Lease so there’s a number of those that have been filed in Caddo.

Thanks for the information. Is the leasing company required to pay the owner the Paid Up portion of the lease before they file a memorandum with the County?

A mineral owner should never turn over a signed lease without getting paid at the same time. Many brokers try to delay the payment, often filing a memorandum or a lease without paying the owner. Can cause difficulties.

What many of us do is sign the lease and make a copy. We write “COPY DO NOT FILE” across every page, especially over the signature portion. We then scan the copy and give it to the leasing agent as proof of our good faith. We get a third party such as an accountant or attorney to hold the original until the payment shows up and is deposited and clears. Then the actual lease will be handed over. I never sign a draft payment letter. It can delay payment by months. I totally understand that it takes time to run title and willing to let my third party hold the lease until it is accomplished. I do not want my lease filed until I have been compensated.

Thank you so much for the helpful information. So there is a way to create a safety net after all. Thanks again.

If you are new to leasing, it would be very wise to get a good oil and gas attorney to look over the draft lease coming from a leasing agent. Rarely are they in the mineral owner’s favor and need quite a bit of editing.

When reviewing a lease, in addition to the royalty and the bonus (which is a one time payment) the following are key items to review:

  1. Whether there is a depth clause, this protects you if there are formations that the lessee does not develop.
  2. Top lease clause. Many leases provide cumbersome procedures in the event that you wish to lease different formations to new lessees.
  3. A Pugh Clause. This protects in the event of certain spacing issues.
  4. No Deduction Clause: This maximizes the royalties by requiring the producer to bear to cost of transportation, dehydration, and other expenses. Some modern leases have things titled “no deduction” but really do not protect the landowner.
  5. Special warranty. Owners do not want to warrant that they have title to the property, the special warranty limits the owner’s liability in the event failure (or partial failure) of title to the minerals.
  6. Cessation, Drilling and Reworking. Places time limits for the lessee to rework the well after production has ceased.
  7. Free use or oil, gas or water: Clarifies how a lessee can use those items and possible royalties if used for production of electricity, crypto currency. etc.
  8. Commencement to drill. Should require a rig on site.
  9. Shut in royalties. Best to limit term that shut-in royalties can be paid.

I recently ran into proposed lease with the following language:

It is agreed between the Lessor and Lessee that, notwithstanding any language herein to the contrary, all oil, gas and other proceeds accruing to the Lessor under this lease or by state law shall be without deduction for the cost of producing, gathering, storing, separating, treating, dehydrating, compressing, processing, transporting and marketing the oil, gas and other products produced hereunder to transform the product into marketable form**; however, any such costs which result in enhancing the value of the marketable oil, gas or other products to receive a better price may be deducted from Lessor’s share of production so long as they are based on Lessee’s actual cost of such enhancements.** In no event shall Lessor receive a price that is less than, or more than, the price received by Lessee.

I view this as a fake non deductions clause.

This post is not legal, tax or investment advice. Reading or responding to this post does not create an attorney/client relationship.

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I concur with disliking the “however” clause that puts the post production charges right back in.

Another clause to consider is a depth clause.