SDC Montana

What does anyone know about SDC Mt. Has anyone leased and been paid by them?

Are they still operating? They offered $150 acre and 1/8 royalty in 2009. They set up an office in Scobey or Plentywood. (one or the other--it's early here and my files are at the office) spread some cash around the community and disappeared. I have one of their leases from that era and some old contact numbers. I recall a telephone conversation with one of their people telling me my biggest problem would be counting my money. When I started asking questions of attorneys and others in the area I began to have my doubts. I was skeptical as to why they were offering $150 acre in a $60 market--their lease was 6 pages vs 2 for their competition , the other company was offering 15 percent royalty. I signed with another company who has since sold a 7/8 interest in their leases to another company. Another thing that bothered me--the lease that sent me had the names of Daniels County residents on them, not mine.

Excuse me....it was Shale Exploration that sent the Leases with the wrong names.

Seward Anderson said:

Are they still operating? They offered $150 acre and 1/8 royalty in 2009. They set up an office in Scobey or Plentywood. (one or the other--it's early here and my files are at the office) spread some cash around the community and disappeared. I have one of their leases from that era and some old contact numbers. I recall a telephone conversation with one of their people telling me my biggest problem would be counting my money. When I started asking questions of attorneys and others in the area I began to have my doubts. I was skeptical as to why they were offering $150 acre in a $60 market--their lease was 6 pages vs 2 for their competition , the other company was offering 15 percent royalty. I signed with another company who has since sold a 7/8 interest in their leases to another company. Another thing that bothered me--the lease that sent me had the names of Daniels County residents on them, not mine.

S.D.C. is still operating in Plentywood Mt. and it is my understanding they will be driling l a well soon .
Do not know where. I also believe they were offering Option leases and say if you signed a option lease for say 3years does that mean they have 3years to deceide to pay you and make that lease active. We have mineral rights up in the Flaxville area and we want to make a wise decesion.

Seward Anderson said:

Excuse me....it was Shale Exploration that sent the Leases with the wrong names.

Seward Anderson said:

Are they still operating? They offered $150 acre and 1/8 royalty in 2009. They set up an office in Scobey or Plentywood. (one or the other--it's early here and my files are at the office) spread some cash around the community and disappeared. I have one of their leases from that era and some old contact numbers. I recall a telephone conversation with one of their people telling me my biggest problem would be counting my money. When I started asking questions of attorneys and others in the area I began to have my doubts. I was skeptical as to why they were offering $150 acre in a $60 market--their lease was 6 pages vs 2 for their competition , the other company was offering 15 percent royalty. I signed with another company who has since sold a 7/8 interest in their leases to another company. Another thing that bothered me--the lease that sent me had the names of Daniels County residents on them, not mine.

Patti,

An "option" does not mean they can wait three years before paying you. The term "option" in this case refers to an option to extend your lease BEYOND the lease's primary term. As an example, let's say the company offers you a lease dated June 1, 2012 for a 3 year lease term at $100 per acre, with a 3 year option for $200 acre.

In that case, they (a Lessee) should pay you $100 per net acre today (or before they get possession of your signed lease). Your lease is now "active" up until June 1, 2015. At that time, in 2015, they (Lessee) hold the option to pay you another $200 per net acre which would then extend your lease up until June 1, 2018. Yet they are under no obligation to exercise that option to extend. They may choose not to pay you the additional $200 per acre at that time (2015). In that case they're allowing the additional 3 year "option" to expire. However, if you agreed to include their option in your original lease, you will have no say if the option will be exercised and if you'll be paid the additional promised bonus amount. So in that sense, they (the Lessee) do have three years to decide if they want to "activate" your lease from 2015 into 2018. Though they must pay you now in order to have your lease from 2012 into 2015.

Options are a bad deal for the mineral owner. I know all the Lessees leasing in Daniels are pushing to include options in their leases. However, everyone should tell them you won't agree to include that provision. Please refer to the front page of this website where Buddy Cotton has posted a very nice piece explaining the details as to why you should always refuse to agree to extension options. Options only serve the interests of the Lessee and not you. Hope this helps.

This was a big help. How a lease was presented to us in 2010--- option lease for 3 years @ 150 an acre and a 2year extended option lease. @ 200 acre. We had very little knowledge so we signed in2010 but were never payed so I take by what you stated that they do not have until 2013 to decide to pay us.

Patti,

If you signed their 2010 lease and were never paid then what you've described is not a valid lease. However, if you sent them your signed lease, AND THEY RECORDED it in the Scobey courthouse, you do have a problem. Although that lease is invalid it would have the appearance of a valid one IF it was recorded. This may prevent you from concluding another lease today, until that 2010 lease is "released".

Now don't worry. Perhaps that lease was never recorded. If so you may be fine. What I'd suggest you do is two fold:

1) Call the company who leased you and request they return the original lease to you. They may, or may not, cooperate with this. Though it is best you regain possession of that original if possible.

2) If you're in, or near, Scobey go to the courthouse to discover if that lease was recorded. Bring your copy of the Lease with you and explain your situation to the County Recorder's staff. After a little research they should be able to tell you if that lease was recorded in the past two years.

If you discover they recorded it, and still refuse to pay you, then it is a legal matter which will require an attorney to clean up. If you determine it wasn't recorded hopefully you should be fine. Good Luck.

To avoid this in the future remember RULE #1 for mineral owners:

NEVER give a Lessee possession of a signed lease until their payment is in hand!

Ms. Leitner, I think this is a common problem. The company gets your lease and does not pay you, the mineral owner, thinking if someone does drill a well during the stated time of the lease, that they could then pay you and you would be happy that at least you were eventually paid. It's called OPM other peoples money. The blankety blank lessee gets a free lease until it's a sure thing and when it is a sure thing they then want you to accept payment or sign a ratification and accept payment, saying it was all a big mistake that you were not paid in the first place. Eastern MT gave you good advice, make sure the lease was not recorded at the very least and at a minumum, if the lease was recorded record a statement that you were never paid. Recording a statement that you were never paid will not clear your title but it will cloud the lessees "title" to your minerals so the lessee will have trouble utilizing them. I wish you the greatest of good fortune!

I want to thank-you muchly for all your info it is really helping. My brother is up there now and will see if he will go to the courthouse and check. I was wondering how we can ask for payment before we hand over our signed lease when they tell you they can't start process until they receive the signed and notarized lease and payment will arrive when they complete their title search which takes about 90 days,

Ms. Leitner, the matter of getting paid and how has been discussed often here. A search of the term "cold drafted" on the home page top right, will return page after page of suggestions of how you can assure payment, or at least how to prevent your lease being recorded without payment.

Want to also thank-you for the reply and I will do that. Also learned that maybe we should hold off for a while until some wells have been drilled and to see if there is success. But it is my understanding that horizontal drilling has a high success rate.

Patti,

By all means get your brother to visit the courthouse. It is important for you to know if they did record that 2010 lease!

Provide your brother with the date of the lease, or the date you believe you sent it to the Lessee if that was prior to the date on the lease. This is so the courthouse records can be checked from that date forward to the present. Secondly, provide your brother with all the names shown on the Lease (both the company name and each of the Lessors names if there was more than just your name on it). With these two bits of information in hand it should only require a few minutes in the courthouse to learn if it was recorded. Good Luck.