Need some advice/oil-gas lease w/Eastern Shelf Land Co. LLC

Am wondering if anyone knows what is going on with Eastern Shelf Land Co.(out of Plano); my wife originally had a signed lease for 2,803 acres here in Stonewall Co. @ $300 per acre. The money was due to us NLT 20 Sept 2012. Eastern Shelf had their local land man come to us on 18 Sept asking for a 90 day extension(until 28 Jan 2013); for this, they paid us an additional $14,000. Now, it seems I can't seem to get anyone from Eastern Shelf to return my phone calls or my email. The head leasing agent for this co. is supposedly a Charles Miller. I begin to doubt that the promised lease money is going to show up. Anyone have any opinions on the matter?

Thanks,

Larry Coats

If you already signed a lease, you should make sure they either return the originals or did not record it without paying you. It is not uncommon for lease flippers to wait until the last minute to either pay or get back to you. I am not saying this group is that, since they did pay the option money, but it is common with both reputable and marginal brokers to wait until the last minute.

Larry, did they actually pay the extention money or did they just tack it on to what they owe you? I wouldn't accept any partial payments, binder payment, extention fee because that would be partial consideration. They would not have to pay you the bonus money to hold your lease, unless you filed suit which could cost you $100,000 out of your pocket and years of your time and at the end of it all, they would still have your lease, you would be stuck doing business with the people you just sued. If they haven't paid you anything yet, I think you should get a lawyer and extricate yourself from this deal and only deal in cash on the barrel head from now on. If you have accepted any kind of payment, it's a done deal and now it's just a business dispute over money and I hope your lawyer enjoys the new luxury suv/ corvette,mercedes,bmw, pool or addition to his house that he will get whether you win or lose.



r w kennedy said:

Larry, did they actually pay the extention money or did they just tack it on to what they owe you? I wouldn't accept any partial payments, binder payment, extention fee because that would be partial consideration. They would not have to pay you the bonus money to hold your lease, unless you filed suit which could cost you $100,000 out of your pocket and years of your time and at the end of it all, they would still have your lease, you would be stuck doing business with the people you just sued. If they haven't paid you anything yet, I think you should get a lawyer and extricate yourself from this deal and only deal in cash on the barrel head from now on. If you have accepted any kind of payment, it's a done deal and now it's just a business dispute over money and I hope your lawyer enjoys the new luxury suv/ corvette,mercedes,bmw, pool or addition to his house that he will get whether you win or lose.



Larry D. Hamilton Coats said:

Turns out I got a phone call from an Eastern Shelf rep just a day after posting my original note; they said they still wanted the lease but were having some problems with some financing; said they were expecting to have this resolved by 15 Feb. Eastern Shelf did hand-deliver a check to us for $14,000 back in Sept, which was not part of the original deal....this money was above and beyond the lease price. My wife, the landowner, was satisfied with that(for a 90 day extension). Now that we have heard from them, I guess we will continue to wait and see what happens. We have no plans on a lawsuit as I have no desire to enrich any lawyers at our expense. Technically, the lease agreement has expired, but we are not inclined to "go to war" over something like this. Appreciate you taking the time to respond. Will let everyone know what develops.

r w kennedy said:

Larry, did they actually pay the extention money or did they just tack it on to what they owe you? I wouldn't accept any partial payments, binder payment, extention fee because that would be partial consideration. They would not have to pay you the bonus money to hold your lease, unless you filed suit which could cost you $100,000 out of your pocket and years of your time and at the end of it all, they would still have your lease, you would be stuck doing business with the people you just sued. If they haven't paid you anything yet, I think you should get a lawyer and extricate yourself from this deal and only deal in cash on the barrel head from now on. If you have accepted any kind of payment, it's a done deal and now it's just a business dispute over money and I hope your lawyer enjoys the new luxury suv/ corvette,mercedes,bmw, pool or addition to his house that he will get whether you win or lose.

I am currently dealing with Eastern Shelf concerning the same issue. Final bonus payment was due in Jan 2013 and no one answers the office phone. The 2 land men I dealt with in the past are no longer working for them. Do you have a cell # for Charles Miller or a different address to reach him than the office in Plano? I never dealt with him only the landmen that worked for him.

Thanks,

Cindy


Hi Cindy, Sorry to say that the payment due to us was supposed to be in our hands as of 28 Jan 2013, then, after a phone call to an associate of Miller's it was promised on 15 Feb. It never arrived, so I called and left a message which basically told whomever that as far as we were concerned, the deal was off. Have not heard a word since, and the Landmen who dealt with us(Todd Wright and Fred Ewers)are not working for ES anymore(so far as I know). I have a phone number in a paper file at home; if I find it, I will relay it to you. As I don't check my email every day, there may be a short delay. Anyway, from our perspective, ES does not seem to be well-managed, and they certainly don't know anything about how to deal with landowners(IMHO).
cindy spires said:

I am currently dealing with Eastern Shelf concerning the same issue. Final bonus payment was due in Jan 2013 and no one answers the office phone. The 2 land men I dealt with in the past are no longer working for them. Do you have a cell # for Charles Miller or a different address to reach him than the office in Plano? I never dealt with him only the landmen that worked for him.

Thanks,

Cindy

Hi Larry,

Thanks for your response. One of my main concerns is my agreement with Eastern Shelf did not specify who gets to keep the 10% upfront bonus payment that they paid on signing. I have not been able to get a phone # for Charles Miller, CEO of the company. Therefore I have not been able to get a signed release from them so that I can go forward with a deal with someone else.

Have you been contacted to repay your upfront 10% bonus or did you have language in your agreement that they would forfiet this amount if they failed to pay the baalnce due?

If you have a phone# for Charles Miller it would be greatly appreciated.

Thanks,

Cindy

Larry D. Hamilton Coats said:


Hi Cindy, Sorry to say that the payment due to us was supposed to be in our hands as of 28 Jan 2013, then, after a phone call to an associate of Miller's it was promised on 15 Feb. It never arrived, so I called and left a message which basically told whomever that as far as we were concerned, the deal was off. Have not heard a word since, and the Landmen who dealt with us(Todd Wright and Fred Ewers)are not working for ES anymore(so far as I know). I have a phone number in a paper file at home; if I find it, I will relay it to you. As I don't check my email every day, there may be a short delay. Anyway, from our perspective, ES does not seem to be well-managed, and they certainly don't know anything about how to deal with landowners(IMHO).
cindy spires said:

I am currently dealing with Eastern Shelf concerning the same issue. Final bonus payment was due in Jan 2013 and no one answers the office phone. The 2 land men I dealt with in the past are no longer working for them. Do you have a cell # for Charles Miller or a different address to reach him than the office in Plano? I never dealt with him only the landmen that worked for him.

Thanks,

Cindy

I'm back, Cindy; about the bonus money already paid to us....there is no language in our contract that even hints at repayment, however, I intend to ask for one, just so all bases are covered. We do not have any other prospects right now, but are continuing to hope. The phone number I promised is for a Mr. Jerry France, who is apparently some sort of partner or associate for Miller: 1-949-246-9119. Let me know what you find out.

Larry

Larry D. Hamilton Coats said:


Hi Cindy, Sorry to say that the payment due to us was supposed to be in our hands as of 28 Jan 2013, then, after a phone call to an associate of Miller's it was promised on 15 Feb. It never arrived, so I called and left a message which basically told whomever that as far as we were concerned, the deal was off. Have not heard a word since, and the Landmen who dealt with us(Todd Wright and Fred Ewers)are not working for ES anymore(so far as I know). I have a phone number in a paper file at home; if I find it, I will relay it to you. As I don't check my email every day, there may be a short delay. Anyway, from our perspective, ES does not seem to be well-managed, and they certainly don't know anything about how to deal with landowners(IMHO).
cindy spires said:

I am currently dealing with Eastern Shelf concerning the same issue. Final bonus payment was due in Jan 2013 and no one answers the office phone. The 2 land men I dealt with in the past are no longer working for them. Do you have a cell # for Charles Miller or a different address to reach him than the office in Plano? I never dealt with him only the landmen that worked for him.

Thanks,

Cindy

Language that a bonus is non-returnable, and a strong disclaimer of warranty of title is important to have. Oil companies are supposed to do their homework.

Hi Wade,

If my agreement with them did not state that the bonus is non-returnable....does that mean they can sue me for return of the portion of the bonus they have paid thus far? I have tried to contact them to no avail to get a release. I want to proceed with a different company at this point but do not want to end up in a lawsuit.

Wade Caldwell said:

Language that a bonus is non-returnable, and a strong disclaimer of warranty of title is important to have. Oil companies are supposed to do their homework.

If they defaulted on paying the balance of the bonus, maybe not, but read your lease. If they have defaulted, and your lease does not give them some ground for extending, then you can lease to someone else.

Cindy, if you have accepted any money at all that is enough consideration to make your lease a valid contract. You would have to sue them to get the rest if they do not voluntarily pay. I have heard of people cashing a $10 binder check who never received the remainder of the bonus and because it was not worth suing over just waited out the 4 years of the lease before they could lease again. In their case no drilling occoured.

If drilling occours on your lease with profitable production, they are not going to release your lease. If you are going to go after them, I would suggest that you do it now when it comes out of their hip pocket rather than later when it is just a small expense from their profits from your oil because they will beat you with your own money. If it is not more trouble to keep your lease than it is worth, they will never release your lease so you should settle this before there is any production.

I should say that this is without reading your lease, but if the lessee wrote it and you did not make significant changes, I think what I said is accurate.