Replies to This Discussion

Permalink Reply by Two Dogs, Pirate on September 1, 2014 at 4:39

The whole thing is fine print. Hire a Louisiana oil & gas attorney.

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Permalink Reply by 1kw6x71km1v37 on September 1, 2014 at 8:47

Is there anything hidden in a Bathgram lease you should be wary of???

The entire document is written in subterfuge beneficial to the lessee and detrimental to you. Get it blown up at a print shop so it can be read and you won't be signing a Bathgram lease. Engage an attorney if at all possible.

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Permalink Reply by Martin on September 1, 2014 at 11:48

Get a good Louisiana Oil and Gas lawyer. There have been several recommended on this site.  Hiring a good Oil and Gas lawyer was the smartest thing I did when leasing my properties. They are not as expensive as you may think.

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Permalink Reply by Henry on September 2, 2014 at 0:04

If you read this lease, it gives the lessee many rights that you may not wish to grant.  It gives the lessee the right to do almost anything on all of your land.  While it may be necessary to grant some rights, you don't want to grant everything, and you would like to be compensated (beyond the lease bonus) for the use of your land.  Also, you should try to get what is called a "cost-free royalty," i.e., a situation in which you are compensated for your gas without having to bear the fairly substantial costs of marketing, transportation, etc. You also want to make sure you have a vertical and horizonall Pugh clauses that keep your operator from holding onto acreage that may not be part of the production unit.  In short, there are many, many things that a good attorney will get for you, and it is worth the several hundred dollars that it will cost.  Do NOT sign the Bath form, without having an attorney provide you an Addendum to it.  And use a Louisiana attorney who specializes in oil and gas -- not the guy who wrote your will.

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Permalink Reply by 1kw6x71km1v37 on September 2, 2014 at 6:39

Well said.

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Permalink Reply by Dion Warr, CPL on September 3, 2014 at 1:29

Kpode:

M. L. Bath and Company has been printing standardized lease forms for some time between before I was born and forever. Based out of Shreveport, if there is a such thing as a "standard" Louisiana lease form, they print them. Though it may be hard to believe considering some of the other responses, many of the oil and gas attorneys that I work with require using a Bath form as a base form, and will shred any "plug and play" computer generated custom form.

The primary reason for its use as a base form is its standard format and content. Attorneys and landmen know exactly what is in them, and what most if not all implications of each provision are. They have been analyzed to death. Paired with a standard lease rider specific to the model form and tailored to the negotiated terms, it forms the basis of many an oil and gas lease contract.

Notice that I have not advocated using merely the Bath form alone. The form itself leaves many issues important in today's environment unaddressed, and provides little more than basic framework for the life of a productive lease. It is for this reason that no lessor with legal counsel with whom I have worked have executed a lease based upon a Bath form alone, and I would be hard pressed to recall a time that I have made a lease offer unaccompanied by a rider of less than one legal page in length.

To the uninitiated, one would likely wonder why we draft leases with a form lease base and then proceed to add a rider which adds, subtracts, strikes out, and substitutes certain passages or whole paragraphs from the form and then inserts custom language. The reason lies in efficiency of time - the attorney or landman does not have to read and analyze every letter of every word in every paragraph of a Bath form - a custom form must be analyzed word for word for what someone may have put in it.

As far as other advice here - if you're asking this question, if you don't know what you're looking at or what you may be reading and what it means in real life - get some professional assistance.

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Permalink Reply by Benny Cooper on May 29, 2016 at 8:04

Hello,

I am wondering if you could help me out.  I'm looking a blank, digital copy of the Bath-Gram lease.  Would you happen to have one or know where I can buy one to use in the SW LA area. 

Any help would be much appreciated

Best regards,

Benny

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Permalink Reply by w.r. frank on September 3, 2014 at 4:33

Most of the advice is solid. I would only sign a lease that has been throughly reviewed by an experienced O&G attorney that is throughly familiar with not only LA law, but also the current litigation pending in LA (Magnolia and others), TX (numerous  pending cases mostly in Federal District court, but some in Texas District Courts and almost all against CHK), OK, KS, WV and CO. I would specifically negate the  Heritage case in TX because in LA it will go to the same 5th Circuit where the same incompetent judge that concurred on the Texas Supreme Court just issued two opinions on the 5t Circuit that are equally wrong and incomprehensible). Finally, if your attorney is up to date on all the current litigation on "no cost" addendum's in all these states, he/she will advise you not to sign any lease with CHK (see Hyer case in Texas Appeals and pending Bass case). Further, I would advise that you prohibit any assignment to CHK without your express written, notorized consent and that the lease will be null and void if CHK becomes the operator of any unit in which you property may be placed. I would do all the things that Henry and Dion advise, but I would specifically delete the entire printed royalty clause and not attempt to change it by addendum. Clearly, in Heritage and in the 5th Circuit, the Court doesn't know how to deal with an attempt to override the printed form on post production costs in Texas.

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Permalink Reply by 1kw6x71km1v37 on September 3, 2014 at 5:20

Corporate leases are custom written. Each one is different. When you're an attorney charging hundreds of dollars an hour, you want things to be a complicated as possible.

On the other hand, Leona Helmsley would have loved the Bathgram lease. All those little people getting shoved down the same rat hole on the cheap.

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Permalink Reply by kpode on September 3, 2014 at 6:01

Thanks all for replies.

Who is CHK?

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Permalink Reply by Skip Peel - Mineral Consultant on September 3, 2014 at 6:13

Stock symbol and often used abbreviation for Chesapeake Energy.

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Permalink Reply by J B Nabors on September 5, 2014 at 10:36

Dear kpode,

If you are contemplating signing an oil and gas lease and did not know that CHK is the stock symbol, and is used as a short form, for Chesapeake, then you should

a. Throw away all writing instruments;
b. Run, not walk, to one of the excellent Oil and Gas Attorneys for your state which are recommended on this site;
C. Do NOT sign anything without that attorney's approval. Ever. Period.

Do not be in a hurry: if your land has minerals today, they will still be there tomorrow! Just be sure to sign a lease that gives YOU the best possible deal.

(i tend to agree with W. R. Frank's advice above, but that is a tad unrealistic.)

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