What to Do?
It's about time to consider lease renewal with Chesapeake. Three years ago we signed with 2 year option for renewal. Do we have to renew or what options do we have since drastic change from three years ago? All suggestions welcome!
Suni
Suni
Views: 101
Replies to This Discussion
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Permalink Reply by Two Dogs, Pirate on -
You have no option, only CHK has the option.
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Permalink Reply by Snake Stewart on
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If they have a 2 year option, the price should be listed in the original contract shouldnt it 2Dogs ?
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Permalink Reply by Two Dogs, Pirate on
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The option is already agreed to by you there is no more deal to make. Now if CHK doesn't send you the money as agreed to in the lease then the lease is dead.
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Permalink Reply by Two Dogs, Pirate on
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Yes it will state on the Exhibit "A" what the amount will be.
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Permalink Reply by Randy on
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CHK's leases typically state the option amount on the actual lease, typically it will be a percentage of the original lease bonus up to 100% of it.
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Permalink Reply by Two Dogs, Pirate on
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I wouldn't doubt that, bury it in the boilerplate language of the lease form so it will be hard to find.
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Permalink Reply by Randy on
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It is typically explained when the subject of the 2 year option comes up.
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Permalink Reply by Two Dogs, Pirate on
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Who brings the dealings up to the table CHK or the lessor? Do you explain the two year clause or do you wait for the lessor to ask? If the lessor doesn't ask do you keep silent on the matter? Why does Chk put the clause in the small boilerplate language of the lease?
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Permalink Reply by Randy on
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When I was working for CHK it wasn't something that was negotiable unless it was a very large lease. On smaller leases it wasn't something that was 'eligible' to be removed. I, and all the colleagues I ever heard explain a lease, explained it as a 3+2 lease. Or a 3 year primary with a 2 year option that is grantable upon CHK's paying them the option payment.
Anyway, I'm sure some people haven't been explained it thoroughly. I recommend everyone have someone who understands contracts read over their lease. Whether it's an attorney, friend, landman, whoever.
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Permalink Reply by OLD HILLBILLY on
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WHAT SEC- T - R ARE YOU IN? , IT SOUNDS LIKE WHAT WE ARE LOOKING AT , 3 +2 I THINK THEY WILL DRILL BEFORE THE OPTION IS DUE TO HOLD BY PRODUCTION , BUT WHO KNOWS.
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