Replies to This Discussion

Permalink Reply by Dion Warr, CPL on August 22, 2008 at 11:55

Greenwood:

Looks pretty solid to me. I'd prefer the oil and gas only clause to refer only to those "oil, gas, and related hydrocarbons which may be produced from a borehole", but the clause works as written. Truly, some of the clauses contained in the lease are redundant and overly cautious, but if you were to err, err on the side of caution. The shut-in payment might be a little stingy, but the time restriction should prevent any long-term abuse.

Let's see what the rest of the "freak jury" thinks.

• ▶ Reply

Permalink Reply by Dion Warr, CPL on August 22, 2008 at 16:14

KB:

Uh, as to the initial bonus amount, you might have a point, however, provided that the Lessor can prove the initial consideration received (copy of the draft, perhaps), I wouldn't believe that the lack of disclosure of the initial bonus amount within the four corners of the lease would be problematic. Typically, the terms and provisions of the lease are held to be binding upon the parties, its or their respective heirs, successors, and assigns, so such terms should be communicated and be binding to an assignee.

If this were strictly true, the statute providing for the validity of a memorandum of lease or extract of lease to be recorded in lieu of the actual lease would run into similar problems, as other material terms and provisions outside of the parties involved, a legally sufficient property description, statement of primary term and/or any possible extensions thereof are not present in the document that legally provides constructive notice to third parties.

As to the first suggestion, you could always 'run it up the flagpole'. The only reservation that I might anticipate with Lessee's acceptance of this ratio is that the price of the commodities being produced has not kept up with the bonus and rental payments being made over the long term, esp. in the HS, where bonuses and extensions have increased 70 - 100 times within the past year in many areas, and 10% of present value might be viewed as a stiff penalty.

• ▶ Reply

Permalink Reply by Greenwood Gas on August 23, 2008 at 0:04

Reply by Jim McConnell, CPL 6 hours ago
"It would have been a nice touch to have the obviously cut and pasted Exhibit justified, and all of the text in the same font. That's not a very high quality work product."

I did that to remove the companies names. I do not want to get in trouble for putting it online. I went and looked at the email I recieved and did not see anything that said I could not share this info , so I have uploaded the original Lease and Exhibit A

I do not know why they did not convert the attachments to PDF as all computers have it but not all have word. Go figure

Here is the email I received

Hello Neighbor,

We have reached an agreement on the final lease form. We are pleased with the provisions for the landowner. We have been very pleased with Mr. Wedgeworth’s negotiations. I’ve attached it to this email. If you print it be sure to print it on legal size paper, or resize it.

We also are working out the details for a "signing meeting" at which time JPD Energy will be present to get the leases signed , notarized, and make any necessary corrections to the specifics of your property.

We will let you know the details later. Provisions will be made for those who cannot attend the signing meeting.

JPD Energy has gone through all of the submitted properties and will be informing property owners this week if there is any problem. Some of the problems involve past due property taxes, successions not yet started, no mineral rights, or areas outside of Chesapeake’s interest were they cannot get a majority of the section with drill sites. If you should receive a letter from JPD Energy you can contact Pedro Pizzarro at the number listed and he will explain your situation, and remedy (if there is one).

Here is an "acreage calculator" so you can verify your acreage.

http://www.ez-calculators.com/land_acre_conversion_calculator.htm

Thanks for staying patient as we head toward the home stretch!

• ▶ Reply

Permalink Reply by Greenwood Gas on August 23, 2008 at 0:15

I have heard about Depth clauses and Pugh Clauses but I do not see them listed. Am I missing something.? Will they be able to drill a shallow well and call that good enough?

Thanks for reviewing this.

• ▶ Reply

Permalink Reply by Robert on August 23, 2008 at 2:19

If you would like I can convert that to PDF. My email address is Robert318@gmail.com. Email me and I will convert it to PDF and send it to you.

• ▶ Reply

Permalink Reply by Greenwood Gas on August 23, 2008 at 3:02

good idea. It appears you are represented by Mr. Wedgeworth. Ask him these questions. It is not sensible or reasonable or wise to rely on comments from a public forum. These are but comments, they're not advice.
True I will ask him but I can ask dumb questions on here without having to look you in the eye
Lawyers tend to use big words and sometimes talk down to you. Not saying that they mean to but it happens. Therefore I don't want to bother the man with a question that I can find the answer for myself.
-------------------------------------------------------

5.3 Upon the expiration of the primary term of this lease, this lease shall ipso facto expire as to all rights below 100 feet below the stratigraphic equivalent of the deepest formation drilled in any well drilled and completed under this lease on the leased premises or on lands pooled therewith that is producing oil or gas at the expiration of the primary term of this lease
-----------------------------------------------------
Does this mean that after 3 yrs I can lease anything 100 ft under the deepest depth drilled. Therefore this is a depth / pugh clause?

• ▶ Reply

Permalink Reply by Greenwood Gas on August 23, 2008 at 5:30

I guess I was just remebering my X Wife's divorce laywer

Anyways Thanks to everyone for checking it out for me

• ▶ Reply

Permalink Reply by Raymond Vercher on August 23, 2008 at 7:28

About half of this verbage don't apply to a one acre lot with a home on it. I am surprised your getting an oil and gas co. to sign this

• ▶ Reply

Permalink Reply by RJ on August 23, 2008 at 8:37

Why would you be surprised that an Oil Co. would sign this lease??

• ▶ Reply