All leasing comes to halt
talk to landmen working for HK CHK XTO DVN All lease active is on hold for unknow period of time. All draft have been stopped on present deals, will not be paid and these lease will terminate at end of draft time period. They have cut production money. However the good news is they will continue to drill the leases they have which is enough land to drill for the next 20 years
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Replies to This Discussion
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Permalink Reply by Snake Stewart on
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I am guessing that final offer they make will be low ball. If they arent going to pay a fair bonus , why not get pooled?
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Permalink Reply by James R McCain on
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Leasing by Chesapeake has indeed stopped save for the sections where they are intending to drill. They are for the time being according to the person I talked to going to concentrate on drilling.
Jim McCain
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You only talked to one person and take their word? A subsidiary of CHK offered me a lease today so they ARE still leasing.
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Permalink Reply by Kassi on
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Most of the majors are just cleaning up the scraps in areas they already hold the majority. Many of those who are leasing are putting off payment for some until after the first of the year.
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Permalink Reply by Lightfoot on
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Hi, Kassi. Do you know why they're wanting to put off payment until January '09? I have a friend who was offered the same proposal just today by Chesapeake.
What would prevent CHK from refusing to honor the payment, other than cancellation of the lease? Will they sign a note or something for the money?
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landownerPermalink Reply by Bobi Carr ("parker") on -
Lightfoot,
J. Todd's comment below states that they would issue a 90 day draft.
If the person believes bonus money will go down the should take the draft. If they believe the bonus money will go back up, they should wait it out.
Someone on here once said the market price for a lease is what it is worth at any given moment. Like the market price of anything else, I have to agree with them.
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Thanks for answering, Parker. I guess I don't understand drafts.
I’m assuming that the company is legally required to honor their drafts or else there’d be no incentive to sign a lease with a 90 day draft.
If lease prices drop, the company could refuse to pay and renegotiate at the lower price.
If lease prices rise, then the guy is locked in at the old lower price.
So I assume they have to honor their drafts, but I’ve never heard of them dishonoring one and don’t know what recourse the mineral owner would have.
Do you know how that works?
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landownerPermalink Reply by Bobi Carr ("parker") on -
Once they record the lease and the draft has been presented to their bank, they would have to honor the draft. Or else you could file suit against them.
I don't personally like the idea of obligating myself to someone who can't pay me for 90 days. But this is just my opinion.
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landownerPermalink Reply by Bobi Carr ("parker") on -
Lightfoot,
There is also a very extensive discussion on the board about drafts that you may want to review.
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See my post above. You can have a clause included in the lease to let you out of the deal prior to the payment of the draft.
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From what my landman told me, the new fiscal year starts 1-1-09. You can get around this by including a clause in the lease which states you can renege on the deal at any time prior to the day the draft is paid. My landman said he has seen it in other leases and will amend our lease to include it as well.
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landownerPermalink Reply by Bobi Carr ("parker") on -
Why on earth would someone sign a lease and not get payment until January?
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