I have a signed lease (the oil company didn't sign the lease) for a paid-up oil and gas lease. The due diligence title work deadline came and went with no payment. A few weeks later I was informed by the oil company that it was no longer interested in pursuing leases in this area. No mention was made of any title failure for my property. Other companies were leasing in the area but I didn't talk to them because I was negotiating with this company. Do I have any recourse against the company? What about the company not signing the lease itself? Any thoughts would be appreciated. Thanks.
Laura, I don’t think you have any recourse if they did not record your lease. If they did record it they have slandered your title and you may sue them. It’s the old story of the mineral owner has to commit themselves and the oil company doesn’t. You may also have been dealing with a “flipper”, someone who gets your commitment to lease for a set amount of bonus and royalty and they then try to sell your lease to someone else for a profit, before paying you. Your commitment has monetary value and it’s a great way to make money off Other Peoples Money ( OPM ). If you sent the potential lessor an executed lease you need to make sure they didn’t record it. If a good well is drilled 2 years from now and you were never contacted because your land showed as leased, you may have a heck of a time kicking these people off your lease. Even with no well if a lease was recorded it may cost you valuable leasing opportunities until it expires or you make the potential lessor release it.
I refused to sign a lease with a similar offer for this very reason, am curious as to who you were “leasing” with.