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Permalink Reply by insomniacnla on October 20, 2008 at 16:43

AGREEMENT TO LEASE


Chesapeake Louisiana, L.P., (“Chesapeake”), subject to the terms and conditions outlined below, agrees to lease the below signed mineral owner’s (hereinafter referred to as “Lessors”) mineral interest within Section ___, T___N-R___W, Desoto Parish, Louisiana (hereinafter referred to as “Subject Property”)

1. Subject to a review of your title and satisfaction to Chesapeake that Lessors own marketable title to your mineral rights under the Subject Property, Chesapeake offers to purchase an oil and gas lease covering the mineral interest under the Subject Property. It is the intent herein to lease all of Lessors mineral interest under the Subject Property whether correctly described or not. Marketable Title is herein defined as one which is free of any defect, lawsuit, third party claim, and which grants to the parties all of the rights afforded in a standard Oil and Gas Lease.

2. Chesapeake’s offer is subject to the execution of a mutually agreed upon paid up form of Oil and Gas Lease, in the form as attached herein as Exhibit “A”.

3. Upon execution of this letter of intent, Chesapeake will begin a due diligence and title review of Lessors mineral position. Lessors agree to supply access to and/or copies of all mineral files and relevant title data covering all the interests. Lessors represent but do not warrant that it owns marketable title to the mineral interest under the subject property.

4. Should marketable title be obtained as to all of the subject lands, the parties shall then proceed to closing as outlined below. Should title fail as to any of the Subject Lands, this letter agreement shall be considered null and void as to the mineral interest beneath the property to which the title fails, with no further obligations to either party herein. However, this agreement shall be binding as to all owners of mineral rights beneath lots in which Lessors possess marketable title. Chesapeake is not responsible nor shall incur any third party fee associated with this transaction incurred by Lessor

5. At closing, Lessors agrees to execute and deliver to Chesapeake an Oil and Gas Lease covering all mineral interest covering the Subject Lands on the mutually agreeable form. The lease shall provide for the following terms:

a. Bonus Consideration: $___________ per net mineral acre
b. Lease Term: Three (3) years,
c. Royalty: Twenty-Five Percent (25%)


6. This offer is based on the assumption that Lessors own a full mineral interest and marketable title in the Subject Lands. Should any Lessor own less than a full mineral interest under their respective Lot or Lots, or title fail in Chesapeake’s opinion, and then the total bonus consideration to be paid to that Lessor will be reduced accordingly. The failure of title under any Lot or Lots shall not affect the validity of this Letter of Intent as to all of the Lots in which Lessors own marketable title.

7. All the terms and conditions of this offer are confidential in nature and are not to be divulged by Lessors to any third party without the express written consent of Chesapeake. This agreement constitutes the entire agreement and supersedes any prior agreement, offer or understanding between the parties.

Should Lessor(s) agree with the terms and conditions of this letter agreement, please execute this agreement or the terms and conditions of this offer shall be considered null and void at Chesapeake’s option.


AGREED AND ACCEPTED THIS 2nd DAY OF July 2008.


By: __________________________





By: _________________________
James Reynolds

Title: Agent for Chesapeake Louisiana, L.P.

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Permalink Reply by Joel on October 27, 2008 at 7:29

I'm not an attorney but that looks pretty binding to me - assuming title proved out etc. and one was OK with the terms of the 'standard oil and gas lease' referred to in the first paragraph. The one aspect missing is the time element - doesn't say how long before closing. I think if you'd have signed it you could have had something enforceable.

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Permalink Reply by insomniacnla on October 21, 2008 at 9:38

I never did understand the whole point of the Agreement either and how could I "agree to agree" when I had no idea of what Chesapeake would agree to and what they would not. It was prepared and provided by Chesapeake. I argued that Chesapeake wanted an OGML and I wanted a check and why we could not do both at the same time and leave out the Agreement to Lease. The landman's boss yelled at me and told me that if I did not sign the Agreement, that all offers were off the table at 5:00 p.m. that day.

I felt that if I signed the Agreement to Lease, that Chesapeake would take their own sweet time in preparing the actual Lease and that it could be months later before everything was finalized and I I received payment. So, I did not sign the Agreement and told them that I would lease to another company.

I did end up leasing to Chesapeake was one of the lucky ones in that I was able to sign an actual lease and receive my check at the same meeting on 9-11-08.

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Permalink Reply by Snake Stewart on October 20, 2008 at 23:03

They only preach it is binding when it benefits them.Kinda like changing the rules in the middle of a game.

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Permalink Reply by Larry L on October 21, 2008 at 0:13

Our Greenwood group signed a "Binding Letter of Intent" for an Oil, Gas and Mineral Lease.

The wording was as follows;

Dear Property Owner,

JPD Energy, Inc. is interested in leasing the property referenced above per the terms listed below. Subject to our approval and acceptance of title, contracts and documents pertaining to the property, and use of a mutually agreeable lease form, JPD Energy, Inc., hereby offers to lease your interests pursuant to the following terms as negotiated through "Our Greenwood Neighborhood Network" group:

Bonus: $xx,xxx.xx per net mineral acre
Royalty: xx%
Term: Three (3) years with a two (2) option to extend at $xx,xxx.xx

Should the terms be acceptable, please sign a copy of this letter in the space provided below and return to "Our Greenwood Neighborhood Network" group.

Thank you for your time and consideration of this request.

Signed by President, JPD Energy, Inc.

Dated and signed by property owner
____________________________________________________________________________________________

The specific amounts were listed on the document.

It was my understanding that it was "binding" per the terms of the letter of intent IF the 1. Title work cleared and 2. We could agree upon a lease form.

We then spent considerable time with our attorney negotiating the lease form with the Chesapeake Energy attornies to have both parties reach an agreement for a final lease. Meanwhile JPD Energy was busy running titles, etc and after excluding some properties for title defects we fulfilled the requirements set forth in the binding letter of intent.

JPD was then able to have a signing event on Oct 4, 2008 where we signed and notarized the leases and at the same time received a 25 day bank draft signed by JPD Energy for the appropriate amount. Those bank drafts are due through Community Bank of LA beginning Nov 4 2008.

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Permalink Reply by Grice on October 21, 2008 at 0:42

This is in no way a representation that the agreement will, or will not, be honored. Just something to consider.

"Subject to our approval..."

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Permalink Reply by Larry L on October 21, 2008 at 0:53

What more "approval" would one need then to sign and notarize a mutually agreeable lease form and receive a bank draft?? It seems to me that it is an acknowledgment of "approval"

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Permalink Reply by Antsu-in-Japan on October 21, 2008 at 6:14

Yes, Grice...very interesting isn't it! Our group received the same letter of intent. CHK pulled out of this agreement last Thursday, one month after our group signed. (By the way, our lawyer claims that it IS a binding agreement).

No worries though. Someone will want our valuable land some day...we can wait. CHP isn't the only player out there.

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Permalink Reply by intrepid on October 21, 2008 at 9:26

Signing a contract and then backing out is not criminal.

It's a civil matter.

Aren't you glad you live in a country where you can hire a lawyer and go to court when you feel like you need to?

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Permalink Reply by Bobi Carr ("parker") on October 21, 2008 at 9:54

MSFVA,
The toying with peoples hopes and dreams is the PR nightmare. I had always had a good opinion of Chesapeake. It has now been tarnished. Even for a business, a good name is important. If it weren't Chesapeake wouldn't have spent so much money trying to gain a good impression.

Also the impression that they are giving investors is that they are in financial trouble. Stock prices can influence borrowing power, which we know is already stained for all businesses. And their recent line of credit may not be sufficient to get them where they need to be.

I see all of this as a lose/lose situation all the way around.

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Permalink Reply by intrepid on October 21, 2008 at 15:42

There are always two sides to every story. The one presented so far may not even be complete.

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Permalink Reply by Snake Stewart on October 21, 2008 at 16:31

Yes sir Mr. Intrepid, you are correct.I for one, not so patiently await the response from the O&G's involved with these deals.

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