In the past 2-3 months, I've 'leased' my mineral rights in 2 counties to 2 different companies. I sent in all the paperwork and never got paid. The landmen now won't return my calls or emails. Is this typical?
What are the legal descriptions and have they been filed?
Hi Janice -
You were supposed to have been paid the per acre Bonus Payment when you turned over the signed and notarized leases. Otherwise, they might claim that the "other valuable consideration", such as the possible drilling of a well, is adequate consideration.
The way I understand that it is supposed to work is that the company sends you an agreed upon Oil and Gas Lease and a Bank Draft for the Bonus Payment amount. You sign the lease and have it notarized, then submit it to the Collections Department at your bank.
They inform the bank of whoever wrote and signed the bank draft that they have received it and the signed, notarized lease. Their bank informs their client and the "countdown" of the number of days the bank draft is made out for begins.
When the leasing company honors (pays) the draft, their bank will transfer the funds to your bank, your bank deposits it in your account and mails the signed, notarized lease to the company.
If you haven't received the full amount you negotiated for your leases, you need to engage the services of an experienced Oil and Gas Attorney and let them handle the issue.
And demand reimbursement for legal fees.
Hope this helps -
Charles Emery Tooke III
Certified Professional Landman
Fort Worth, Texas
I signed a lease with Northeast Energy in West Virginia on June 6, 2017. I called and ask when I could expect bonus payment, they said in Oct.!!!! Said they had to do title search, etc. I have signed before with other companies, and received bonus within 60 days. What is with them?
I don't get bank drafts. i did in the past, but I think it ended up costing me money. My leases are 1) Sec 24-9N-4W in McClain Co, OK to Southwest Energy Partners and 2) Sec 30-20N-9W in Major Co., OK to PD Mitchell Co., LLC. I guess they're just both duds. I suppose as long as they haven't filed them at the courthouse, they're not obligated to pay.
The fact that a lease has not yet been filed does not mean that it is a legally binding instrument. First question is whether you own the minerals and have signed a lease entitling you to bonus or an NPRI (non-participating royalty interest) and have ratified an existing lease and are not entitled to bonus. Assuming that you own minerals, then you should send certified letters to each landman stating that the failure to pay the agreed bonus of $XX and demanding that either the bonus be paid immediately or that the original lease be returned to you. In the future, you should not hand over an executed lease without receiving the bonus in direct exchange. Alternatively, you could add a clause which states that the lease is not valid unless and until the bonus has been paid in full.
Typical, maybe not. Common? Absolutely!
You can ask for whatever your banking charges are to be reimbursed.
Thank you for your response. I'll attempt to reach theses companies one more time. I had a similar experience last year in which it took 6 months to collect. The company refused to release the lease and refused to answer my correspondence (they had already sold the lease to someone else). I checked into hiring an attorney, but the cost was almost prohibitive. I am not sure who to trust anymore when it comes to leasing my minerals.
I never thought of that. Thanks.
Never hand over a signed and notarized lease without receiving your Bonus Payment in full at the same time. That's what the Collections Department of your bank can handle for you if they insist that they need a signed lease before they pay you.
And it would probably be worth the cost of having an Attorney review the lease before you accept it, even if only for the peace of mind.
If you have to engage the services of an Attorney to collect your money or have your lease returned or released, you can always demand reimbursement for legal fees.
If you need an experienced Oil and Gas Attorney, there are several that various members or The Forum and Responders like me can recommend.
Thank you. I will keep that in mind. This discussion has been very helpful.
Call the District Attorneys for McClain and Major Counties and see if anyone else has been having trouble with the Landmen and companies involved.
Carol Daken -
I hope you have been following Janice's conversation.
Never give a signed lease or document of any other kind to someone with out (a) having an Attorney look it over and (b) receiving the full agreed upon consideration amount at the same time.
60 days is no less ridiculous than 4 months. Unless you use the Bank Collections Department method, get paid the same day as you sign the papers.
Maybe I will. I called the county clerks of McClain and Major counties today, and neither lease has been recorded. Thanks!
I was told by a paralegal in one of the counties I was having trouble last year that I should send a photocopy of the lease and not send the original until I received payment. Then i had a couple of landmen tell me that it didn't really work that way... It seems as if so many of these companies are brand new - as if people in other occupations (eg: real estate brokers and attorneys) are trying to jump on the oil and gas bandwagon.
Charles Emery Tooke III I did work with an attorney and made changes with the first lease they sent. Two times I added addendums. I signed and returned the lease, then waited 6 weeks, called and ask when I could expect their check. Was told in Oct. What would suggest I do now?
Are you sure they didn't file them at the County Clerk office?
Sometimes company will try to lease minerals and hold off on payment hoping to flip the lease. I never give anyone my signed lease without payment. The bank fees are usually about $30 or so, very small amount if you don't know the company. Also, you can ask for them to pick up the charge. Sometimes I ask for the check to go to my attorney and he releases the sign lease.
How do you get them to pay you when they want the original lease first? I always get the story that they have to checkout the mineral acreage, too.