Do I get a second bonus

My lease expires in July.  I leased for three years with two year option with the same bonus amount I received for the first three years.  Since I am  receiving royalties check, do the two year option still apply and am I still intitled to another bonus.  The contract say I do if Im reading correctly.  Also, I am suppose to have free royalties, but money is being deducted for fuel and gathering.

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Oil & Gas ProPermalink Reply by Terry L. Antee on May 5, 2011 at 10:19
Generally that would be a No!  On the fuel and gathering with a free lease I would think you would only be paying taxes and not fuel and gathering?  But that is not in my field.

landownerPermalink Reply by Big Daddy, bcnr on May 5, 2011 at 10:45
Also, you probably should not receive a second bonus. Normally, if minerals are being produced in paying quantities, the lease will remain in effect. No need for the two year option. If there were no royalties being paid and no production, the two year extension (and second bonus payment) would be valid.

landownerPermalink Reply by Henry on May 5, 2011 at 11:55

Easymoney,

Would you share your lease language that provides for cost-free royalties?  There are some people who thought their language gave them cost-free royalties, but their operator would not honor it, claiming it was inadequate.  If you don't mind, would you give us your language, and maybe we can help you.  Also, who is your operator?


Oil & Gas ProPermalink Reply by The_Baron on May 6, 2011 at 3:41

1) you lease is held by production. Therefore no renewal is necesary.

 

2) CHK and others sell their gas to a  affiliated third party. Basically, CHK claims that these deductions take place after the sale resulting in a lower net price for the RI. It is possible thay just don't know, or have overlooked the cost free clause in your lease.

 

Send a certified letter stating your lease has a cost free clause. Request reimbursment for the past deductions. Attach a copy of the reorded lease. Keep it simple. If they do not resopnd or refuse to honor your lease, go see an attourney. A ggod attourney could recoup these monies, with maybe a bit of added interest.

Permalink Reply by Sam on May 18, 2011 at 9:38

This is SAM. Caution, if you are dealing with CHK, watch them.  They were taking out transp. charges, etc for a yr before we caught it because it wasn't showing on the check stub.  We could tell something wasnt' right.  Also, they use some other excuse for lowering the % you get due to some "entities" that have an interest  opt not to buy gas some months so they say we have to take more then and give up down the line.  Am checking on that little tid bit!  Also, Chk sells its gas to a subsidary of Chk for LESS! Now, how can that even be legal.  Put it all in writing if you deal with any co! We didn't know! SAM 

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