Replies to This Discussion

Permalink Reply by Caiman on July 13, 2010 at 7:48

I just got an offer and lease contract in the mail for 5ooo acre,25% , 3year lease.Sec 24,16N,15W from Clayton petroleum,Lafayette LA.It was unsolicited.
Chk ,May 6th permitted a well in this section.I don't know anything about Clayton ,but can't help but think they intend to flip it and I should sit tight A while.With all the definitions of what IS IS in these leases Im not particularly wanting to go UMO.This is A 1.5 acre lot with small pipe line crossing my street and larger one just south of the well site.I would appreciate anyones thoughts on this.Before accepting such I would contact an CHk land person or try and employ help from someone from this site.

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Permalink Reply by mar sch on July 13, 2010 at 8:22

This is the clause in my Exhibit A....is this what you are talking about ? Is this to my disadvantage?
Thanks.
3) It is agreed between the Lessor and Lessee that, notwithstanding any language herein to the contrary, all oil, gas or other proceeds accruing to the Lessor under this lease or by state law shall be without deduction, for the cost of producing, gathering, storing, separating, treating, dehydrating, compressing, processing, transporting, and marketing the oil, gas and other products produced hereunder to transform the product into marketable form; however, Lessor’s share of any such costs which result in enhancing the value of the marketable oil, gas or other products to receive a better price may be deducted from Lessor’s share of production so long as they are based on Lessee’s actual cost of such enhancements. However, in no event shall Lessor receive a price that is less than, or more than, the price received by Lessee.

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Permalink Reply by Skip Peel - Mineral Consultant on July 13, 2010 at 9:13

Caiman, Caddo Parish Clerk of Court records show that Clayton Petroleum has recorded one OG&M lease in May '08. Just one so they certainly are not acting on CHK's behalf. However they did assign that same lease to CHK. I wouldn't lease to them but I wouldn't cut them out of discussions as they provide some level of competition even if you eventually plan to sign with CHK. I think you should lay low and wait until CHK comes calling. I wouldn't contact them. As long as your ownership is validated by conveyance records at the courthouse, they will likely find you eventually. I would suggest that the time to negotiate is when the well is in completion operations. Keep in mind that you can lease at any time even after the well is completed and turn to sales. All that being said 1 1/2 acres is not enough to expect much over than CHK's standard offer. Be reasonable in your requirements for a good lease.

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Permalink Reply by Caiman on August 4, 2010 at 10:36

Skip,I have found out since we last talked Clayton Petroleum is in fact leasing for CHK and their lease states such.The check will come from CHK and recorded lease at clerk of court record will show CHK.I was told none of that was ever put in their name.The employee I spoke with did not share with me who actually owns Clayton or if they were an independent company or subsidiary of CHK.

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Permalink Reply by Skip Peel - Mineral Consultant on August 4, 2010 at 10:44

Thanks for the update, Caiman. It's good that Clayton Petroleum is being up front about representing CHK. I wish all land companies would be willing to share with lessors the lessee they represent.

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Permalink Reply by kittycatmama on August 4, 2010 at 12:21

Caiman, were you able to get them up for $5000 an ac. Was this for Caddo or Desoto

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Permalink Reply by Dion Warr, CPL on July 13, 2010 at 9:57

KCM:

"Full knowledge of our rights"? What does that mean? Are they asking you to warrant title, or in some way hold them harmless from your possible ignorance?

If the former - it is pretty standard on small tracts to obtain a "no warranty of title" provision in your lease, not even to the return of bonus, rental(s), (or royalty, if you can get it) paid to Lessor in error.

If the latter - satisfy yourself that you are able to warrant your actions by not allowing for yourself to be ignorant (including, but not limited to, seeking professional counsel).

Otherwise, this clause should not be allowed to stand.

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Permalink Reply by kittycatmama on July 13, 2010 at 12:45

we won't sign anything unless there is a no warranty provision

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Permalink Reply by WHuguet on August 4, 2010 at 10:45

"however, Lessor’s share of any such costs which result in enhancing the value of the marketable oil, gas or other products to receive a better price may be deducted from Lessor’s share of production"

That's some good drafting right there!

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Permalink Reply by MJS on August 19, 2010 at 9:54

Watch out for landmen, they'll squeeze the weenie out of a hotdog. It's $22,500 an acre, 1 or 640 makes no difference if you own property above a mountain of gas. Just because the economy is down today doesn't mean you can buy a new Porsche for $7,995.00 so why should you subsidize a well? And remember, 1/3 of your "blessing" goes to Obama et al.

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Permalink Reply by FXEF on August 19, 2010 at 10:13

MJS, I like the phrase.... "they'll squeeze the weenie out of a hotdog."

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Permalink Reply by Skip Peel - Mineral Consultant on August 19, 2010 at 12:54

Delusions may be encouraging for the uninformed but they are merely momentary chuckles for the informed.

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