Oil & Gas Lease Reeves County

Texas Mineral Rights Reeves County, TX
1

I submitted an oil lease to an attorney for review who came back with a few Addenda to be attached. The Land Man replied that Chesapeake Oil does not like modifications such as this and that he had submitted them to Chesapeake even though I simply asked him to look them over. The Land Man indicated that Chesapeake would probably sit on it, sell it to someone else at a later time and we would get much less.

I immediately asked him to withdraw it and signed the lease as is and FedExed it to Eagle Land Services. The Land Man will not return phone calls or emails.

Has anyone else had this experience and any suggestions on how I can find out the status of the lease? I am in limbo right now.

2

Was your landman from Crucial Energy Solutions???

3

dennis halligan said:

was your landman from Crucial Energy Solutions???

No Eagle Land Services.

4

Seems to me it’s no surprise that an oil company wants to get a lease on its terms, which are rarely in your interest as a mineral owner. I’ve seen enough one-sided leases to be wary of them, and your attorney surely didn’t suggest the modifications for nothing.

In addition, you have to consider the fact that a lease is “forever,” i.e., if oil or gas are found and produced - in some leases not even in paying quantities - the lease can be “held by production” for an unlimited time and bind not only you but your descendants.

That’s why I’d personally rather forgo a lease on bad terms. If there’s enough interest in the area, there will always be more chances.

Naturally, if you are in need of cash at this particular time, that can override any long-term thoughts. But it’s always worthwhile considering that a landman is trying to get the best deal for his client, and that is not you, but the oil company. You, on the other hand, are trying to get the best deal for yourself.

The landman’s comment that Chesapeake would probably “sit on” the lease, resell it and you would get “much less” sounds like pure bluff. In the first place, they wouldn’t buy a lease they didn’t like any more than you would lease at terms you don’t like. And if they did, you’ve got the bonus already and the terms of the lease are binding on any subsequent owner of the lease as well as Chesapeake. So it’s a mystery to me how you could lose anything that way.

As for the landman not returning calls or emails… I can’t say that’s anything new to me. My advice would be to write him that if you don’t hear from him within a certain period, you consider the signed lease invalid and will feel free to deal with other possible lessees. If even that gets no action, wait for other offers. In that case, the landman has probably gone on to other owners who are willing to sign on the dotted line without even reading the lease, and has no further interest in you.

5

Thank you for thoughtful response to my post – My concern is that there appears to be considerable drilling activity all around one of the sections in my lease.

Charles Laughlin said:

Seems to me it’s no surprise that an oil company wants to get a lease on its terms, which are rarely in your interest as a mineral owner. I’ve seen enough one-sided leases to be wary of them, and your attorney surely didn’t suggest the modifications for nothing.

In addition, you have to consider the fact that a lease is “forever,” i.e., if oil or gas are found and produced - in some leases not even in paying quantities - the lease can be “held by production” for an unlimited time and bind not only you but your descendants.

That’s why I’d personally rather forgo a lease on bad terms. If there’s enough interest in the area, there will always be more chances.

Naturally, if you are in need of cash at this particular time, that can override any long-term thoughts. But it’s always worthwhile considering that a landman is trying to get the best deal for his client, and that is not you, but the oil company. You, on the other hand, are trying to get the best deal for yourself.

The landman’s comment that Chesapeake would probably “sit on” the lease, resell it and you would get “much less” sounds like pure bluff. In the first place, they wouldn’t buy a lease they didn’t like any more than you would lease at terms you don’t like. And if they did, you’ve got the bonus already and the terms of the lease are binding on any subsequent owner of the lease as well as Chesapeake. So it’s a mystery to me how you could lose anything that way.

As for the landman not returning calls or emails… I can’t say that’s anything new to me. My advice would be to write him that if you don’t hear from him within a certain period, you consider the signed lease invalid and will feel free to deal with other possible lessees. If even that gets no action, wait for other offers. In that case, the landman has probably gone on to other owners who are willing to sign on the dotted line without even reading the lease, and has no further interest in you.

6

Carol Verret said:

Thank you for thoughtful response to my post – My concern is that there appears to be considerable drilling activity all around one of the sections in my lease.

In that case, you’re home free. It’s only a matter of time before you get an offer from some outfit that wants to drill on your interest. The best thing that can happen to you is that there are wells all around your property, and you hold the key to connecting them (pooling).