Sabine Oil and Gas Co. Bankruptcy

General Mineral Rights Discussion
1

What can I expect to happen to my lease in Lavaca County with Sabine Oil since they filed Chapter 11?

J. Michal

2

Mr. Michal,

If your lease is in production, you can expect things to continue as always. What you cannot expect is there to be densified drilling activities inside the unit.

There is some good information on the attachment to this response.

Best,

Buddy Cotten

1101-EvernoteWeb.mhtml (1.23 MB)
3

I have an update on Sabine. One of my clients told me yesterday that his royalty check from Sabine bounced.

The lease form that I negotiated for him has a lease termination provision for failing to pay royalties, along with a security interest in the royalty.

I will let the forum know how this resolved itself.

Best, Buddy Cotten

4

Than you, Buddy, that is so sad. Sabine was in a lease bidding war with Penn V in Lavaca County in my area a few short years ago and out bid PV and paid $5,000/acre for a lot of acres around my place. Unfortunately I didn’t get in that because my lease had a 2 year option for a lot less money and Sabine took that option. Now that lease is due to expire in February 2016 and I’m just curious if it will just expire or if they would try to drill in order to keep it and all the other leases around me that still have a few years left on them.

5

It is not only sad, but to bounce a royalty check is unthinkable. Your lease is an asset to them. If they cannot protect it themselves, they will try to get another company to take their position and protect the acreage.



Buddy Cotten

6

Do you know the date of your clients royalty check, all checks I have received from Sabine have been dated on the last day of the month. The June check went thru fine, I guess we will see on the July check.

Thanks,

7

Buddy, we had an odd request by Sabine four months ago in Harrison County. We were sent the last page of an allocation agreement and asked to sign it, have it notarized and returned. We were given a copy of the agreement that it is supposed to be part of the agreement to keep for our records. Our attorney told us we should not sign the page without the entire document attached. Kathy Stephens

8

Dear Kathy,

I agree with your lawyer. In fact, I want my clients to initial each page as well. There may well be a clause in the allocation agreement that would allow Sabine to disassemble each separate agreement and file one complete agreement. That is probably what they would want to do.

Best,

Buddy Cotten