Replies to This Discussion

Permalink Reply by Kassi on August 16, 2008 at 4:42

They do a preliminary title but they do not go all the way back to look for any leins, leases etc from the first sale of the property until they have a deal. At least that is my understanding. We decided we would not take a draft. The O&G company agreed to the letter of intent and then giving checks at the lease signing.

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Permalink Reply by Kevin on March 24, 2011 at 5:18

I am old school trained as a Texaco Landman in the late 70's.    I work for a family that does not deal in drafts, whether buying or selling.  If the lanowners would trash use of the draft the companies might start training their own men again. 

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Permalink Reply by smith1 on August 16, 2008 at 3:02

i.e. did anyone have trouble collecting? ours is for a 15 day draft. And what can you do if it doesn't "clear"?

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Permalink Reply by Snake Stewart on August 16, 2008 at 3:31

If your lease has been posted I would seek legal counsel.

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Permalink Reply by Landowner on August 16, 2008 at 3:59

I am having a hard time understanding the process. You sign a legal contract that you accepted their offer. Then they don't pay. Then what good is the contract. Doesn't sound very binding to me. What happens if you the landowner decides not to take the check, do you have that option?

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Permalink Reply by Snake Stewart on August 16, 2008 at 4:07

I would hate to be in that position. You would have to get an attorney to clear the mess up I would think. If you have a lease on file who else will offer you a lease even tho you haven't been properly compensated for said lease ?
Every single aspect of these situations are heavily weighted toward the O&G's. It has taken years for them to line up all the domino's that they have. If you get in a head butting contest with the O&G's on these premises then you will have a severe headache. Period.
I am quite sure that the lease would not hold up after non payment but it will be on you to handle the mess.

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Permalink Reply by Landowner on August 16, 2008 at 4:11

Snake, What I am asking is if an o/g writes you a contract and you accept, then what I am reading is that they can back out by not honoring a draft or check, but on the other hand if you sign the contact it is binding to the homeowner. Am I right?

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Permalink Reply by Snake Stewart on August 16, 2008 at 4:14

That is exactly what has happened in our area. I don't know how binding it would be after the time had expired but you can bet our group will not be going down that dark alley . Too much room for horseplay.

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Permalink Reply by insomniacnla on August 16, 2008 at 4:38

The story that the landmen will give you is that the landmen have to have a commitment from you (letter of intent or signed lease) in order for the landmen to be able to order the check from the o/g company. The landmen will also say that once the lease is signed and they leave a draft as payment in order to give the landmen time to go and check the title and make sure everything is the way it should be. The landmen say that it takes hours and hours and thousands of dollars for them to check the titles and they are not going to invest that amount of time or money for a lease that is not already signed.

Don't fall for this, it just gives them more time to do what the landmen should have already done. I have told the companies that I will not accept a draft and that they have plenty of time during negotiations to go and check my title. It was only after I kept arguing that they finally agreed.

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Permalink Reply by ed on August 16, 2008 at 6:57

I have accepted a 15 day draft. Time is not up yet and I have no reason to expect any problems but if the company backs out now I will start with a half page ad in Sunday paper next to theirs.

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Permalink Reply by smith1 on August 16, 2008 at 11:47

Ours was for 15 days also, still a few more days to go, but if yours doesn't clear, let me know and I'll be with you on the Sunday ad! Do you mind me asking who you signed with or is that confidential?

Permalink Reply by Kevin on March 24, 2011 at 7:49

 Trash the draft. You own the minerals and an oil company isn't worth squat without your minerals. 

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