Replies to This Discussion

Permalink Reply by insomniacnla on November 25, 2008 at 14:11

Mr. Krow,

Individual landowners were also asked by Chesapeake representatives to sign letters of intent at the beginning of negotiations. I was told that CHK required my signature before any lease negotiations could begin. Here is an email that I received from a CHK landman:

"Please see the attached Letter of Intent. Please note we have attached a blank lease form as Exhibit A and note the letter of intent says this is based on a mutually agreed upon lease form. Please let me know as soon as you review it. I am planning to come up to the shreveport area tomorrow, and if this letter is approved, we can sit down and try to come to an agreement. Thanks.

Please send me an email back to let me know you received the letter. Thanks.

Agent for Chesapeake Louisiana, L.P."

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Permalink Reply by insomniacnla on November 25, 2008 at 15:20

KB,

I SOOOOO agree with you. I also thought that the once a landowner signed a LOI, that it would remove any incentive for the o/g company to move quickly and have the lease executed.

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Permalink Reply by sesport on November 25, 2008 at 15:48

Mr. Krow - of the 3 associations that my family members are involved with (that being neighborhood/homeowner associations), we signed Non-Binding letters of intent. I'm not aware of any Assoc. that tried to push BINDING letters of intent. I am aware of those who were asked to sign such with landmen or attorneys, though.

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Permalink Reply by HBP on October 29, 2008 at 2:05

Two Dogs, The letter of intent is useful for what you stated but it was brought into play here more because of the competition. In areas of intense competition there was no time to run title back to patent prior to signing the lease or before competition broke a deal up. Having and agreement to "agree" calmed the waters to allow deals to get done.

I did not see them necessary in areas w/o competition, but they started showing up everywhere.

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Permalink Reply by Two Dogs, Pirate on October 29, 2008 at 3:28

HBP I understand why they use them but can only speak of the one that I looked at for a landowner. The copy that was left with the landowner, who was an older fellow, had no date and no property description just blanks to be filled in at a later date. I asked why he had signed and he told me that the landman was with a local resident that he trusted. The letter provided for a time frame of 30 days. When the landowner contacted me it had been 60 days since he had signed. He had tried to contact the landman many times but was unsuccessful. Like I said "Beware of the Trojan Horse". Letters of intent can come in all kinds of intent both good and bad.

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Permalink Reply by sesport on November 25, 2008 at 16:45

Those NBLOI's are meant more as an indication of the total & (somewhat) contiguous acreage and as shopping & negotiation leverage. Some of the Assoc.'s actually own common area in their neighborhoods, thus the governing boards have authority over that acreage. As far as having "authorized agents," each group (coalitions usally) has chosen it's own way of being represented. Some have chosen local landmen, another is working with an attorney, another used both a landman & attorney.

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Permalink Reply by Inez on October 29, 2008 at 4:26

A group in Greenwood, who signed their leases with Chesapeake (brokered by JPD Energy) on Oct. 4, with 25-day drafts, are still waiting. It appears now that only property owners who don't have a mortgage on their property are fairly certain of getting their drafts funded. Others are being asked to complete a "non-disturbance" form to cure their title. I was wondering if anybody knows if this is standard operating procedure, or if it is something new being required. My fear is that it is just another way to break a deal. Does anyone know what the content of a "non-disturbance" form is?

Thanks for all the shared info . . .

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Permalink Reply by barneyfife on October 29, 2008 at 8:55

A 25 day draft means 25 working days, not calendar days. Assuming that the drafts were received on October 4 which was a Saturday, the drafts were probably placed in the lessor's bank for collection on October 6, Monday. The drafts might be sent off on October 6 depending on the time of day presented or the next day, but assuning the clock started on Monday, October 6, today, October 29 would be day 18 of the 25 days. If Monday October 13, Columbus day was a bank holiday, it would not count as one of the 18 days. The weekends would not count either. So don't give up yet its too early to say that the drafts will not be honored.

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Permalink Reply by landleaser on October 29, 2008 at 9:37

I can guarantee that the draft will not be paid before January. Chesapeake has made it clear than nobody is gonna see a dime before January. So it might as well be a 90 day draft.

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Permalink Reply by RJ on November 4, 2008 at 1:33

Landleaser,You sound like you have some sort of inside information. Care to share your sources with the rest of us??

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Permalink Reply by The_Baron on November 4, 2008 at 4:26

Drafts can take up to a week to make it to the lessors bank. Thats assuming your bank knows what to do with it.

I issued a draft this summer to a l/o who took the draft to his bank the next day. Several days later he noticed a isf charge on his account. When he inquired they said his draft bounced. His bank (A large financial institution at that) had processed the draft as a check. I had to issue a new draft (I did reduce the # of days) and gave my l/o a buisness card from my bank so his bank could call mine and learn how to handle the draft.

It is a sign of times withj banks building branches on every street corner, that the level of training for the tellers has gone down. Many tellers are nothing more than cashiers.

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Permalink Reply by The_Baron on November 26, 2008 at 5:26

While your at it jim why not chang the amount?

I would send your altered draft back, and issue a new one if it has been altered after being signed by the landman.

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