What happens if I don’t sign the renewal

Oil and Gas Leasing Help
1

There’s no way a company expects me to sign a lease renewal without knowing the terms of the contract I’m signing.. I’m sorry but I cannot be honestly expected to do so and I know I can’t be the only one that feels that way being in school for pre-law just completely blows my mind that would even be asked.. I know there’s people out there that do this, my mom was one of them that didn’t even read the terms of the leases or anything she signed. She knew that if she signed it that she would get paid. Which is even more of a reason why I don’t want to sign a renewal without knowing the terms of the lease renewal before I sign. The original lease was executed with maple energy holdings, who then sold leases to vital energy who then merged with crescent energy.. and a representative of vital got a hold of me 7 months ago, stating that vital energy does not have the signed lease and do not know what the terms are. They can only obtain the memorandum from the courthouse as the file from maple did not have either memorandum or lease when they purchased it from Maple. I saw online they purchased like 230 million worth of leases (or somewhere around there) well then there was a merger with Crescent and you can’t tell me that they didn’t have a entire legal team going through all the documents documents to do a merger of that size it would’ve been acknowledged that there was no lease at that point right? Well, also on top of that the offer letter I was able to locate in some paperwork of my mom’s and it has proposed terms on the offer letter, but the thing that caught my attention was the offer letter is dated the same day that my mom supposedly signs this lease. Which would mean that this letter was typed up in Houston and mailed off traveled through snail mail to Oklahoma City where my mom who, only checked her PO Box every Saturday morning didn’t leave the house any other time of the week for the last 20 years so you can’t tell me that it was any other time, then signed the lease and returned it for it to be submitted to the courthouse all within the same day is impossible.then the memorandum was notarized on 11 May 2023, even though the lease is dated and took affect April 17, 2023 and Crescent energy sent a letter saying in compliance with the terms of their agreement dated 4 17 2023 by my mom and Maple energy holdings LLC covering land in Reeves County Texas check number XYZ in the amount of $119 is enclosed representing an option to extend payment under said oil and gas lease. to complete our records Please sign payment receipt below and return in the envelope provided. Should you have any questions? Please do not hesitate to contact me.

Okay so I did well when I called It took two weeks to get a call back and when I got a call back, they said oh no problem. We will email the lease right over and it’s been another three weeks and I still can’t get a hold of them… is this normal? I am aware of some of the back-and-forth dealings as my stepdad is a geologist in Oklahoma and I grew up working for him in the oil field and I’m not new to some of the mishaps that happen. He also had told me that one of the companies that Crescent energy is aligned with has been holding a lease for three years in which he owns a interest in and has refused to drill and he would’ve leased it to someone else had he have known The company wasn’t going to drill. Now I understand that his situation is a little different as he owns both royalty and working interests in his line of business. Regardless my idea of crescent energy company is already not the greatest but I’m trying my best not to be biased. Any guidance or help or any good Permian basin attorneys would be great as I have interests spanning at least eight counties there that I know of as my mom had inherited this in the 90s and didn’t exactly talk about the details as she comes from a family that is constantly trying to steal everything from each other so there’s almost guaranteed to be things I am not aware of that I own.

2

It is common for the effective date to be before the date the lease is signed. It would be the date the parties came to an agreement. In this case, the form sent to your mother likely had the same date as the offer was mailed and the lease and memorandum were probably enclosed with the offer letter. Your mother signed at her convenience and mailed the forms back, apparently without retaining a copy of her signed lease. The signing date does not override a specified effective date. Unless she made changes to the lease form, it will be identical to forms signed by other mineral owners to the same company. And apparently the lease contained an option to extend. This is why it is imperative for you in the future to scan any lease and retain a hard copy in your records. The misplacement of lease forms is also not uncommon as files can be voluminous and some companies are careless. Did you receive the extension payment on or before the end of the primary term - April 17, 2026? If not, then you can argue that Crescent failed to exercise its option in a timely manner and that the lease expired. If you received the payment on time, then a Texas oil and gas attorney can give you the best advice. There are attorneys who represent mineral owners listed on this site and perhaps on the NARO site.

3

If the lease had an option to extend, then it will be on the identical terms of the original lease. Exercising the option is the prerogative of the lessee, as long as it is done timely and at the rate specified in the lease, and binds the lessor.

1 Like
4

The check did come just under a month before the lease term ended. The offer letter terms aren’t exactly “bad” 3 Year Primary Term w/ a 2 Year Option 25% Royalty Net Mineral Acres: 0.2380968 $/Acre: $1,500.00Total Bonus Consideration: $357.15 2 Year Option (Payable at time option is exercised) $/Acre: $1,000.00 Total Option Consideration: $238.10. To me honestly it’s the signing the “receipt” and sending it back.. I can’t imagine signing a contract without ever seeing the contract and that’s what it feels like to me. But if the lease she signed stands regardless of me signing, would anything for me change if/when there is production in these next two years?

The lady that asked me for the lease was very adamant about wanting the signed lease not an offer letter not an unsigned lease. For about a month and a half the calls/emails/letters were pretty much daily. But the terms much of reached the 3 company in the ownership chain even though they did not yet publicly merge, since the check matches with my 50% interest and the bonus listing in the offer letter.

Thank you for your insight. I do plan on getting an attorney. Sooner rather than later since I was waiting to cash the check until I did. but going in with a huge heap of 50 legal descriptions give or take on TODD throughout the Permian, plus a bunch of random mail my mom kept, sounded absolutely ridiculous. So I’ve been trying to find and organize everything I can before I do that.

5

You are mixing apples and oranges. Was there a brand new lease form included in the letter? That is not an extension of the old lease. It is a new lease and you can negotiate all of the lease terms, including the bonus and refusing the option. The lease terms will be very favorable to the operator. With a small net mineral interest, your negotiating power is somewhat limited.

1 Like
6

Why would you hire an attorney to look at/neogiate 0.2 acres, by the time you pay them you are losing money. What exactly are you trying to accomplish/prove?

1 Like
7

Sounds like they are offering said terms for you to agree to an Extension of the Lease. I would not agree to any 2 year extension. The Lease with those terms would be mailed to you later. But, I would get an Attorney in any case.