"FAVORED NATION "clause will protected you
my understanding is:
if you have a "F.N."clause in your lease, you can sign up now & if the prices goes up in the furure you will be compensated at the new higher price.
if you have a "F.N."clause in your lease, you can sign up now & if the prices goes up in the furure you will be compensated at the new higher price.
Views: 1564
Replies to This Discussion
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Permalink Reply by Snake Stewart on
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What happens if they send another group in to sign other landowners.Kind of squirrely if you ask me but it wouldn't surprise me.If company A signs some landowners and Company B and C sign others,who can tell what company is with which group? Just because I say I am working with PetroHawk doesn't mean that I am.If another big boy signs rest of group,would PTHK have to honor other companies higher amount?
If you are getting the very best offer you are ever going to get........Why wouldn't they grant it ? We could use some additional info on this subject.Please be OVERLY CAUTIOUS when dealing with any of these guy's and "girls"who are ever so quick to tell you they will have to check on something but they don't see a problem with it.Never to bring it up again!I know of examples in this play were they were promised verbally that something would be in contract only to find out too late that it wasn't.When brought to their attention after signing they simply said "show me in contract where we said it". Sad but very true! FAV. NAT. could be a blessing.I guess it depends on tricky wording and interpretation that may give us a false sense of security.The best approach may be to stick it out until you can't stand it anymore,sign your lease and go on about your business.Let the attorneys figure it all out.That tricky wording stuff could get you in more trouble then it is worth!
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Permalink Reply by Randy on -
I've had many people ask about this, and never granted one. I haven't seen any example of CHK granting one either except perhaps in very specialized situations where you have some acreage that is an absolute must have. Most people just don't have the acreage to negotiate something like that.
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Permalink Reply by BeatBama on
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That is probably why then , we have a significant amount of acreage. I just wanted to make the point that they do make this kind of offer. But the FN clause isn't worth a damn if nobody next to you signs a lease. Anyway, royalty percentage is what really matters if this thing plays out.
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Permalink Reply by Lerret on
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No company is going to "grant" a favored nations clause
Actually they do frequently, but they may limit it to the drilling unit or a small area, not a township or parish size.
If you are administering an estate, and you are not a pro, the FN Clause is your protection too> That is you cannot be held liable by heirs for getting too little money. You will match the high dollar in the drilling unit.
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Permalink Reply by RAY on
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a FN clause with a time limit & tied into your section is not asking for much.
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Permalink Reply by Randy on
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asking for much or not, if you get one out of me your a tough tough man.
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Permalink Reply by HBP on
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Just my two cents, but I don't see them giving out FNs on this project due to the huge price jumps and disparity. If they show up at all, they will probably be limited to a bounding neighbor who signs within 3 months (or something like that, etc...). If you got a flat out FN for anything the company buys, somebody (landman or inhouse) messed up somewhere, because enough of those could make certain areas less economical to produce real quick.
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Permalink Reply by Joan Williams on
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I was told Chesapeake will not grant a Favored Nations clause. And who could blame them ? You sign for 5,000 an acre today and expect to get 10,000 an acre next month if offers go that high ? No way will they write that in their lease.
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If you want more money down the road.....put a no surface rights clause in your lease.
Then down the road IF the company wants to drill on your property or run a pipeline across it they will have to negociate a price to drill or cross your land with you ! That's exactly what I did in my lease.
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Permalink Reply by EASYMONEY on
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OFF THE SUBJECT A BIT:
CAN ANYONE TELL ME HOW TO TRY AND FIGURE THE AMOUNT OF MONTHLY ROYALTIES ON A WELL THAT IS PRODUCING 16 CUBIC MILLIONS A DAY???
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Permalink Reply by MTA on
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The amount per acre/ per month would be $2,443 (that is based on a price of 13.3 and 16M cubic/day) and I got this number from www.pagaslease.com/calculator_natural_gas_royalty_form.php
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Hello MAE,
That sure would be a nice check every month for 30 or 40 years wouldn't it. Slowly but surely , they are heading our way!
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