Rush to Drill for Natural Gas Creates Conflicts with Mortgages (NYT, 10.19.11)

So, how would one counter the mortgage lenders?

 

http://www.nytimes.com/2011/10/20/us/rush-to-drill-for-gas-creates-...

 

"Lenders predict that the conflicts between leases and mortgage rules are not likely to cause foreclosures, nor have they resulted in broad litigation or legislation. But many of the leases do  constitute 'technical defaults' on the mortgages, lenders say, and will likely result in new rules from local banks and additional hurdles to getting a home loan or refinancing a mortgage."

 

more roadblocks  80P

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landownerPermalink Reply by P.G. on January 20, 2012 at 16:09

I don't know what the issue is..land owners don't actually own the NG under their land, just the right to go after it.. so how could there be a lean placed on it?


landownerPermalink Reply by P.G. on January 21, 2012 at 5:32

I can understand if an owner allowed something permanent that altered the surface that would harm the lender's position  such as leasing a pad or or pipeline but don't know what the issue would be otherwise for extracting NG from a lateral well running underneath the land located elsewhere..
NG isn't any different than water...


Oil & Gas ProPermalink Reply by Two Dogs, Pirate on January 21, 2012 at 10:11

I had to deal with mad lessor down in Avoyelles Parish about a year ago. The rig was on his property drilling and there wasn't a subordination of the mortage. The landowner was POed because he found out that another person that he knew got $50 an acre more than he got. He said the landman and him had a hanshake deal that no one would get anymore money than him. The holder of the mortgage told me that they wouldn't subordinate the MTG without the mortgagors written consent. The landowner said that he wouldn't sign nothing. His daughter the lawyer said she had told him to have a favored nations clause placed in the lease but that he thought a handshake deal would work. She also told me that her dad would be a lot less mad when he starts getting some big royalty checks. The landowner told me that $50 per acre more would have amounted to $150,000 but he also said he would have been just as POed if it was one towsen dollars.


landownerPermalink Reply by P.G. on January 22, 2012 at 6:25

Don't know about elsewhere but here in Louisiana where sections are unitized..it wouldn't matter if one had a lease or not...the NG is going to get mined..right?

Would just being unitized put owners at default with their mortgage lenders?

Would drillers have to get permission from all the lenders in the whole section?


landownerPermalink Reply by P.G. on January 22, 2012 at 8:07

So you think lenders are promoting  Mineral Owners going unleased?


Oil & Gas ProPermalink Reply by Two Dogs, Pirate on January 22, 2012 at 13:57

PG most lendors don't know beans about the minerals on lands they hold mortages own. I can't see where the landowner could get into trouble with the mortagee on something that they didn't sign. I am not a lawyer.


landownerPermalink Reply by robert minton on January 22, 2012 at 10:35

Foreclosure of prior-existing mortgage will "wipe out" subse


Oil & Gas ProPermalink Reply by Two Dogs, Pirate on January 22, 2012 at 13:47

Robert could you please complete your statement, I have no idea about what you said.


Oil & Gas ProPermalink Reply by Two Dogs, Pirate on January 22, 2012 at 13:43

I will never make that kind of a deal, I only make greeting handshakes. I am not a lawyer so I can't comment as to the legality of a handshake deal. I would think that if you had disinterested witnesses to the handshake deal then you may have a case.

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