landowner

Unintended Consequences? Could those $25,000 bonuses be rescinded?

The discussion about the class action lawsuit has gotten so large that I am afraid this question might get over looked.

My question is:

If the units are determined to be illegal and are rescinded, could the leases that were predicated on the unit sizes also be rescinded?

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landownerPermalink Reply by Bobi Carr ("parker") on May 8, 2010 at 18:45
IANAL - I am not a lawyer.

I'll move this to the other discussion, if members feel like it should be put there.

If this is not an uninteded consequence of the suit, I keep thinking of things that could be.

Lower gas prices.

Royalties held in escrow while suit is pending.

landownerPermalink Reply by Mac Davis on May 8, 2010 at 21:16
The lease usually does not specify anything about a particular unit or unit size. Later unit formation wouldn't affect the lease or the bonus payment.

Unit formation and size will affect royalty payments.

Oil & Gas ProPermalink Reply by The_Baron on May 10, 2010 at 3:12
Actually,

most leases do have language about units, although I am not familiar with any that would invalidate a lease or require rfund of bonus or rentals should a unit fail to be approved, just that they tend to require the mineral owners participation in units up to certain sizes. I have seen leases by some of the shale operators that require the MO to agree to voluntarily participate in Units of up to 1280 acres.

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