I have just a few mineral acres i inherited when my mother passed away in 2014 in Grady Co. I did a lease in 2014 and 2017. Recently i received a letter from a tx company with a letter to lease my minerals. I signed a lease offer about 5 weeks ago. At first responded to emails, but now no communication from them by email or phone. Their excuse for taking longer than usual to complete is the title work for both sections still isn’t done. It appears it’s just two guys are in the co and will not respond or remit payment. Only their cells were provided. Noone like a secretary answering calls at their office. Thinking i should not have entered into an agreement with them. My question is how long to wait for payment before i can try to do a lease with another company?
I’m guessing you are referring to Grady County, Oklahoma. If that’s not correct please post your State.
Do you still have the original of the lease you signed or did you send it those these folks directly?
I’m not a lawyer, and what follows is based on how things work in Texas. If Oklahoma is different I hope M_Barnes will set me straight.
If those folks are holding your signed and notarized original lease agreement, regardless whether you have received the agreed bonus payment, they could record it in the County deed records. If that happens you could end up not only not getting the bonus payment but having a cloud on the title to your mineral interest. That could hamper leasing to anyone else until you can get it removed.
If they have your signed lease and you can’t get any response, I’d suggest you (or an attorney) mail them a certified letter with return receipt requested, saying you consider that agreement null and void, and under no circumstances to be recorded.
Unfortunately what you described isn’t unusual. In future leasing I would avoid turning over a signed original until you have the bonus payment in hand. Most established companies will at the least agree to provide you a sight draft covering the bonus that can be held by your bank, along with your signed lease, until the lessee completes their title work. A better approach I’ve rarely had problems negotiating is agreeing to email the lessee a copy of the signed lease, marked copy, but not send the original, recordable, lease until you have received their bonus payment.
Thank you Dusty. Yes i did sign and send. Following up tommorrow with the manager of the main branch in Lubbock. Hopefully he is in fact working with them and it’s all good. Usually not this stupid since i have leased in Grady co before. Have checked Grady co records and nothing has been recorded yet. I appreciate your feedback
I have not found it common for an oil company to send a Lessor their lease bonus before the company has the signed lease. Unless a Lessor makes other arrangements (personal face to face delivery of lease/bonus or hiring a go-between such as an agent or lawyer to handle the transfer), the oil company is not going to send funds until their lease is in hand. Of course, 99.99% of the time, this works out fine. In the old days, it was common to use a bank draft but I haven’t personally seen that in many years. Most oil companies these days are very large companies, and everything is on the up and up. Not many small companies anymore but it is wise to be cautious, and make other arrangements if it is not a very large company with an identifiable presence.
There are many of us non-operators that will send leases with checks. It’s called trust. If the lessor takes the funds without executing the lease, that situation involves mail fraud.
If you haven’t tried the approach I suggested you might be surprised by the reaction you’ll get when you are dealing with a solid operator.
To me, the payment procedure is part of negotiation, like any other changes I might propose in response to a lease offer. The potential lessee doesn’t have to agree but if they won’t at least offer a reasonable alternative I’d have second thought about dealing with them.
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