In the body of the lease modification it is mentioned that the lease is recorded in the courthouse. Get a copy and investigate if the lease is still in effect. If the lease is still producing and you have not been receiving royalty, where is your royalty being held?
When an operator/lessee wants something from you, they may call you every day and send letters twice a week. Once they have what they want, it may be difficult to get them to talk to you. If you have royalty somewhere, get it before you sign anything.
If you have a valid and subsisting lease, you would be entitled to royalty under that lease for future production. I would not make the assumption that the lease is valid and subsisting; verify it.
Wells can produce for long periods of time, but over 50 years elapsed is long enough that I would check, unless you are receiving royalty.
Once again, I would not sign a lease modification that says “furthermore, that I grant, lease and let for $1.” If the lease is valid and subsisting, they don’t need that. If the lease is not valid and subsisting, I don’t want to lease for $1.
Dave Hayslip said:
They are offering a $500 inconvenience fee. But if they are soon to be drilling there… why is it an inconvenience for them to make all that money and we only receive $500? You see… we REALLY don’t know what we’re doing here. But we are trying to learn. LOL.
r w kennedy said:
If you have not been receiving royalty and that is the reason you know nothing about these rights, the lease may have already expired on its own terms. If you do not have a copy of the lease, I would get one.
Reading the last paragraph of the lease modification, to me it could be construed that you are leasing for $1 if the original lease has expired. If you adopt, ratify and confirm the original lease, why then would you further have to agree to grant lease and let unto lessee and lessee’s assigns? If the original lease were still valid, it would still be binding on you as successor. It could be mere surplus language but I would make sure the original lease was still in effect before I signed anything with that language in it.
A lease can be maintained by other means than production but if production and the lease has been maintained, I would want to know where the royalty is before I sign any new agreement.
In my opinion, the present lessee wants a lease modification for something that was not paid for in the original lease, something for $1. To modify a lease should open up negotiations for other things, possibly a greater royalty percentage but I hear they balk at that. At the very least, companies have been known to pay an inconvenience fee greater than $1.