Leased same place to 2 companies question

My dad recently deeded his mineral rights to me. I was going through the leases he has signed and saw that he has leased the same spot to two companies. One lease was signed in May for a 5 year term, and another was signed in Oct for a 5 year term. Can anyone advise me on what to do about this?

Teri:

Have you recieved the bonus money for both leases? When a company leases minerals, it has been my experience that their landmen conducts a final research of records at the Coutny Clerk office in order to verify that another lease has not been entered into. If a company has failed to do the proper research and entered into a contract, I would think that they would be subject to lose their bonus money.

Yes, he received the bonus money, and had to wait almost three months before cashing the check, (and then quickly spent the money), while they did their research. My dad is 77 years old and did not seek out someone to lease his minerals to. Now that the deed is in my name, I have received an offer to lease an area as well, only that section has also been leased by my dad over a year ago. Is it difficult to determine if something has already been leased or is there just a time lag from when a landman discovers the open land and offers the lease?

Could it be that the leases cover different formations?

Dear Ms. Hanson,

My recommendation is to advise the latest landman of the situation. If he choose to go forward, clearly protect yourself by a specially drafted warranty of title provision that does not include you refunding bonus, delay rental or royalty in the event of failure of title.

It’s too late for protection. The 2nd Lease was signed in Oct. and dad was told not to cash the check until they were finished with the title search. He waited until after the date they gave, cashed the check and then spent the money. I only found this problem after I was deeded the mineral rights and got the leases from my dad to see what he has been doing.

Buddy Cotten said:

Dear Ms. Hanson,

My recommendation is to advise the latest landman of the situation. If he choose to go forward, clearly protect yourself by a specially drafted warranty of title provision that does not include you refunding bonus, delay rental or royalty in the event of failure of title.

Best,

Buddy Cotten

I called the company that signed the deed later and told them about this. He said it’s the same spot. He is doing some research and is supposed to get back with me.

Adam said:

Could it be that the leases cover different formations?