I have received a paid-up lease to sign along with a separate cover letter. The cover letter specifies my address, their address, the sections of land, the specific acreage that I own in each section, the per acre, how the bonus will be paid, the royalties and the term we discussed. However, when I read the actual lease, the specific acreage amount that I own and the per acre bonus amount are not written in the actual lease document. Is this common, and should I expect the specific acreage I own and the $ per acre bonus amount and how payment will be made to be included in the language of the actual lease ?
Thank you !
Thank you - that is the case - the legal description of the land is the same and the lease shows the gross acres but not my part of it. If the bonus we have agreed to is only written in the letter, is the letter legally binding ? Thank you !
The letter says I should fax the signed and notarized lease, then they will send a check, and upon receipt of the check, I would send them the original documents. Am I wrong in thinking I can make sure their check (not a bank draft) clears the bank before I send the original documents ? Or if I say I need a certified check, then that would not be an issue ?
I have a relative who has worked with this land company several times and said he has never had any problems…but I want to make sure I am not being careless with anything.
Chase Guidry said:
I would request to be paid with certified funds upon execution of the mineral lease.
There is not much the land company can do with a faxed copy of your lease. If you are concerned make a copy of it, write “COPY” across the front, then fax it. The land company would have a hard time recording that document. After you receive the check, take it to the bank and once you have cash in hand, mail back the lease.
We have not signed a lease yet but all land men we’ve talked to, 5 or 6, seem to want to pay the bonus with a bank draft. Is this decision made by the land man himself or the company he represents or who?? Also, is a bank draft just as good as certified funds with the exception being that it just takes longer to clear? Or is there a chance the draft won’t clear at all? We are in the Eagle Ford Shale area in TX north of I-10.
Chase Guidry said:
I would request to be paid with certified funds upon execution of the mineral lease.
I found this article about bank drafts:
http://www.mineralrightsforum.com/profiles/blogs/oil-and-gas-bank-draft
It sounds to me that bank drafts offer some protection for the oil company but none for the owner.
I decided I wanted to be paid with a check.
GayNell said:
We have not signed a lease yet but all land men we’ve talked to, 5 or 6, seem to want to pay the bonus with a bank draft. Is this decision made by the land man himself or the company he represents or who?? Also, is a bank draft just as good as certified funds with the exception being that it just takes longer to clear? Or is there a chance the draft won’t clear at all? We are in the Eagle Ford Shale area in TX north of I-10.
Chase Guidry said:I would request to be paid with certified funds upon execution of the mineral lease.
Additional question - landmen in our area are offering $3000 to sign lease with a promise of “the rest of the bonus” in 14 days. They are honest about planning to “sell the lease” to someone else who has money, i.e., investors. I think there is a risk in giving them the originally signed lease without gettin all the bonus simultaneously. Others think that not getting the full bonus would invalidate the lease. What do you think?
Drafts are worthless instruments. It’s totally optional to the oil companies to honor them. I have had three that were not honored. In fact I’m 0 for 3 of the drafts I’ve submitted for payment. RWK
GayNell said:
We have not signed a lease yet but all land men we've talked to, 5 or 6, seem to want to pay the bonus with a bank draft. Is this decision made by the land man himself or the company he represents or who?? Also, is a bank draft just as good as certified funds with the exception being that it just takes longer to clear? Or is there a chance the draft won't clear at all? We are in the Eagle Ford Shale area in TX north of I-10.
Chase Guidry said:I would request to be paid with certified funds upon execution of the mineral lease.