What if we all just stopped signing the Memorandums? What would they do? It’s not in our best interest to keep signing them. Thoughts?
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They would not pay the bonus.
The operators want to keep the lease terms confidential. Be sure and keep a copy of the actual lease in your files as you or your heirs are going to probably need it in the future.
then they would not get the lease
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of course they want it confidential
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Why is it not in your best interest to sign a Memorandum of OGL? What exactly do you think that changes on the acreage after you signed the lease?
I am not a fan of the Memorandum. I had a client who’s father had a lease and they only had the Memorandum which did not refer to the no-deductions clause. We only got a copy of the actual lease once we were in litigation.
Unless something in the agreement prohibits it, I would be tempted to create an affidavit that refers to the Memorandum, then attaches a true copy of the full lease and file it with the county records. Make sure nothing in your agreement prohibits this course of action going forward.
Notice: Informational only. No attorney-client relationship is formed by this post. I am an Oklahoma-licensed attorney, but this is not legal advice. Do not share confidential facts in this public space.
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In OK, Memorandums are fairly rare. Since they are fairly rare, I was lucky that I caught one that had a depth clause which was missed by a pooling respondent’s list. I answered the pooling and got a 1/4 pooling instead of them missing me and I would have been assigned 1/8th.
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I have seen companies that offer next no changes to a proposed OGL and want a Memo. This only protects the royalty consideration which is ridiculous.The filing of the OGL protects the mineral owner and provides information to the market. There a risk that companies will resist. If the market is that competitive they want to hide the consideration behind a memo, then other companies will come forward with other offers. Any time you negotiate you must be prepared to walk away if your terms are not satisfied.
The Memo potentially changes the market information. Since the OGL is not filed and the Memo is filed, then other owners cannot see OGL terms of record. If you have limitation clauses. depth, formation, or Pugh, then those are not exposed to the market for other potential OGL opportunities. Everyone has to make their individual decision, but they may be better served by refusing a Memo.
I am curious about this topic. @texserena Do you want the lease public? If so, record the lease with the county clerk. Is there an agreement or something in writing that you, as Lessor, are not to record the lease?
I would agree with you if this was 10 years ago. In todays times, its rather standard for lesssors to have the info that you stated in their leases. Using this board as a small sample size, most owners never look these things up, so we are are talking about a small handful of owners that do and those owners are requesting those things either which way no matter if a memo is filed, so its not a concern, just my 2 cents that arent worth much.
The original OGL is returned to the Lessee, so the Lessor cannot record the original OGL. The Lessor could attach a copy of the OGL to an Affidavit if there was no agreement preventing such an act.
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Most leases I review these days have a provision in which the lessor agrees to the filing of a memo and agrees not to file the lease.
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This whole discussion highlights the importance of retaining an executed original lease in both file folder and scanned records. Benefits both owner and heirs. Nothing stops a lessor from executing two originals and keeping one. Even better if the lessee also signs, especially if there is an addendum to the form. Lessor can require that one original lease signed by the lessee be returned before handing over the memorandum. You need the lease if there is a dispute later as to any of the terms, from royalty rate to depth releases. You should not depend on an oil company, whether original lessee or assignee, to produce the lease and any addendum. If they say it is lost, the burden of proof will likely fall on the lessor who is making a claim.
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I had not ever thought of duplicate originals. Great idea!
I keep all executed scanned copies. They use these memo’s so that other mineral owners cannot look up the terms for negotiation (they prefer everyone be kept in the dark). I sign a few leases every quarter. I was not aware OK didn’t file a memo, but I usually just make an election on the pooling order.
FYI you can now scan and upload your lease into any AI platform and ask AI if it is a good lease for the Lessor. It has been pretty effective.
AI has limited ability to analyze a lease and you should not rely on its “opinion”, at least in Texas where the courts continually revise the interpretation of lease provisions such as royalty clauses. AI essentially spits back data that has been fed into it. I have yet to receive a mineral owner favorable lease from a landman. The question should be whether AI can identify all the unfavorable clauses in light of state and case law.
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Due to it being the most common question asked on a weekly basis, why doesnt this forum just post an oil and gas lease for everyone to use?
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Bob, lease language varies by state statute, regulation case law and particular circumstances. For example, some leases in Texas can be four-eight pages long depending upon the necessary clauses. Some leases in Oklahoma may only be two pages and some include another two page addendum. Better to have a state board certified oil and gas attorney give the proper advice.