Replies to This Discussion

Permalink Reply by J Todd on October 14, 2008 at 17:35

Parker,
My question about CHK's leases, was for insomniac who stated "Most of CHK's leases don't state the amount they are paying on the lease itself". I am, in fact, holding a lease from Manna which clearly states the amount. It is almost identical to the leases offered by 2 different co.s a few months ago. I just hate it when people make "blanket statements" on this board with nothing to back it up. I should have clarified my comment was for Insomniac.

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Permalink Reply by Bobi Carr ("parker") on October 14, 2008 at 17:43

J. Todd,

Insomniacnla is very well versed in Oil and Gas.

We may all be misunderstanding each other.

Leases usually say what the royalty % will be, but I haven't seen any that state what the bonus amount is.

I subscribe to the Clerk's office in Bossier and have looked at many of them. I can't see why they would want that information disclosed unless they want to show that leasing bonuses have decreased. It has not been common in the past to disclose the bonus amount.

But you may be talking royalty , where I am thinking you mean bonus.

And I would love to see a copy of that addendum, if you are willing to give it.

But anything is writing beats what they say. I would just be careful and confirm everything.

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Permalink Reply by J Todd on October 14, 2008 at 18:17

Parker,
Just to clarify.....every lease we've been offered has stated the bonus payments (in thousands of dollars) and a royalty of 25%. Every lease I have seen has been the same format. Anyway, I'm in Shreveport and I don't know if Bossier operates differently. I hate to say "I heard" but it's my understanding leases are a matter of public record and it is possible to look up anyone's lease to see what amount they were paid at the Dept. of Conservation Resources. I will try to find out more. Also I will gladly post the clause to which my landman was referring as soon as I receive it.

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Permalink Reply by Bobi Carr ("parker") on October 14, 2008 at 18:45

J. Todd,

Thanks, I look forward to reading the clause.

As far as the leases, they are recorded at the Clerk of Court's office in the parish where the property is located. I just looked at the Bossier Clerk's website and viewed leases from Twin Cities (theirs stated $100 and OVC), Manna (theirs stated $1 or more) and Red River (their was all Memorandum of Leases - so nothing specified).

I will be extremely surprised if anyone records leases stating the bonus amount. But surprises abound.

I'm smart enough to know I don't know it all. That is one of the things I love about this site, there is always an oppurtunity to learn.

Best of luck to you. Everyone has to make the best decision for themselves at the time.

We cannot walk in another persons shoes. We can only try to help them find the smoothest path. But we can only help with the information that we have available to us.

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Permalink Reply by insomniacnla on October 14, 2008 at 16:33

Parker,

Just one more way to try and protect the landowner should any type of dispute arise in the future concerning what the draft was payment for.

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Permalink Reply by Bobi Carr ("parker") on October 14, 2008 at 17:14

Insomniacnla,

Thanks, I just didn't think they would want to disclose any more than they need to.

I am interested to find out more about the clause that J. Todd has spoken about.

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Permalink Reply by J Todd on October 14, 2008 at 17:06

I have talked to landmen and they have not indicated all drafts have been stopped. As a matter of fact the current trend is to offer a 45-banking day draft which could come from their '09 fiscal year.

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Permalink Reply by Snake Stewart on October 15, 2008 at 0:30

Good luck with that.Hopefully they wont turn into the 60 to 90 day type that were being offered around here.
You state that you can renegotiate your terms before the draft clears? If you have signed stating you accept the terms , how exactly will this be done ? If they decide not to pay you on the current terms , why would they allow you to bump it up 2 weeks later?Since you havent signed the lease yet, you may want to wait and look at the actual document before you state factually what it will or wont do.Please be cautious of the final draft.Just because you'll have agreed in principle or even had it listed on a previous draft doesnt mean it will be in the final draft.Again, good luck.

A 45 day draft is not win/win. Or so it hasnt been for the one that took them around here.

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Permalink Reply by insomniacnla on October 15, 2008 at 2:15

Most of the o/g leases that are recorded do not state the bonus amount paid unless it was a low bonus amount like $150.00 per acre and the M.L. Bath form was used, although I did find a few leases where $1,500.00 bonus was paid per acre. I know because I have looked at hundreds of them and I am also going from personal experience. Every once in awhile, I was able to find an extension of an o/g lease that stated the amount paid per acre for the extension and sometimes you can look at the option and find bonus paid for that. All summer long I looked at leases recorded in Caddo and DeSoto Parishes trying to find the highest bonus amount paid and I am still looking. LOL If Chesapeake is listing their bonus in their leases now, we would all love to know!

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Permalink Reply by insomniacnla on October 15, 2008 at 2:27

J Todd,

I have access to the DeSoto Parish and Caddo Parish courthouse records for several years now and no, the bonus amounts paid are not stated in the leases. It is usually the same "Lessor in consideration of One hundred and no/100 and other valuable considerations..."

There are exceptions to this, usually when the landowner agrees to a low bonus amount and to most of the other items in the o/g lease.

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Permalink Reply by boo on October 15, 2008 at 2:32

I work for JW Porter who is a broker for Chesapeake and I know what is filed at the courthouse is only the Memo, Not the lease itself so this will prevent putting the $ amount on record for the public to see.

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Permalink Reply by The_Baron on October 15, 2008 at 4:27

Even the full copy of the lease does not show the dollar amount. The lease will say it was for $100 and other Valuable consideration. The other valuable consideration is the lease bonus! This is legal as long as the lessor receives more than the $100. Lease memorandems are used so the terms are concealed (pugh clause, surface damages, etc..) or more commonly to save money on recording fees.

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