Sec 14

Martha - I received another offer to lease in Section 14. I used the lease that Ryan provided last year. Now the company has counter-offered asking that the “Assignment” and “Interest” clauses be removed from Exhibit A. In essence, they said that our nma (2.878788) was too smal to bother with these clauses. I don’t know what the impact of removing these two clauses has; what is your thinking on this? Thank you…

The assignment clause is not all that important. They may be going to flip and it might get flipped again and they don’t want the paperwork hassle.

If you are talking about the 12% interest if they don’t pay on time, it is statutory and is required by the state. If you don’t have it in your lease, it is not that big a deal since it is required by the state and the operator must pay. What they are hinting at is that they are not going to be the operator, so they don’t want it in the lease. You will get paid by the operator, although you might have to fuss to make it happen.

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Thank you, M. Barnes. I appreciate your response… Sure makes things easier…