Replies to This Discussion

Permalink Reply by Ajo Hebert on May 12, 2010 at 15:46

Why would this make any difference?
Leases are bought by brokers/leasing agents. Then when the lease block is in place or when enough acreage is leased the leases are assigned to the company. That is the way it is done and after your initial lease to the broker it is out of your hands until the lease expires. Just be glad that they are not putting a wind farm on your 40 acreas.

Permalink Reply by J B Nabors on May 14, 2010 at 5:25

"... Why would this make a difference? ..."

Obviously, it would not to you. You have the perfect lease: you got $25,000 per acre signing bonus, 27.5% royalty, have a $500/acre per year shut-in royalty clause, have an ironclad upper and lower Pugh clause, and your best buddy is the landman.

However, for some of us it could make a difference.
A. It does not cost ANYTHING to incorporate.
B. You stand a chance of getting all your minerals back if the Lessee fails to observe the terms of the clause.
C. IF you ever consider litigation, you know exactly who holds your lease and who to identify as defendents.
D. If you ever need to contact someone about any question with your royalties or lease, you know whom to contact.

It is sort of like health insurance (except it is free): you hope you won't need it -- but it is nice to have if you do.

Good luck. I wish I had been as smart as you when I signed my lease.

Permalink Reply by Henry on May 14, 2010 at 5:29

JBN,
Well said! And good luck in your litigation. My experience is that it might be an agonizingly long slog through the courts. You have to stay upbeat, and not give up.

Permalink Reply by J B Nabors on May 14, 2010 at 5:36

Thanks, Henry!

You nailed it. Our primary clause expired over a year ago, and we "hope" to get our case filed this month. And that is just to get the ball rolling. You are right: we anticipate "an agonizingly long slog through the courts."