AboutFrederick M. Scott CMM RPL Expertise I can answer questions about oil and gas leasing, and give suggestions on negotiating a good oil and gas lease and how to best deal with oil companies or their representatives. I can answer questions about buying and selling oil and gas royalty or mineral rights. I can help with questions concerning forced-pooling, correlative rights, deeds and conveyances, and "post-production" costs. I am most experienced with Oklahoma properties and laws, but am able to answer questions concerning other oil and gas producing states in many cases.
Experience I am a Certified Professional Mineral Manager (CMM) (certified by the National Association of Royalty Owners in Tulsa, OK) and have managed my own oil and gas properties in Oklahoma for over 10 years. I have dealt with many landmen, attorneys, and other oil and gas professionals in the course of doing so. I am also a member of several professional associations and have written articles of interest to royalty owners which have appeared in several industry publications. I have prepared deeds, title work, and done curative for my own minerals; and have acquired a good deal of knowledge on the subject of oil and gas law and landwork in general in the process. I am the owner of Timbercreek Mineral Company, LLC; which was formed as a vehicle to manage family mineral interests, and as a way to facilitate the buying and selling of oil and gas interests for other people.
Organizations NARO, NADOA, AAPL
Publications National Association of Royalty Owners "Action Report" (ROAR); NADOA Magazine, Landman Magazine, and several royalty owner association groups newsletters.
Question We signed a lease with East Recourses last July and have not received the lease money yet. We have received several letters from them explaining the situation and we always opted out of the immediate lesser payment option. We just received another letter that has three forms. One - to opt out of the lease, a second - to receive the immediate lesser payment, and third - a form titled "Ratification of Oil & Gas Lease." It states that we are ratifying the lease signed in July of 2008. To me this simply means we want to stick to the terms of the original lease, but I want to make sure that is what we are signing. I know I should just call East, but I like to have as much info as possible before I go into a conversation on which I really know nothing about.
Any info would be great. Thanks!
Answer Amanda, it's not too terribly unusual these days (unfortunately) for lessees to either not pay on time, or to ask the lessor (you) to accept a lesser payment.
Oil companies, especially the ones that drill in the continental U.S. these days aren't as rich as everyone thinks they are...some are highly leveraged in fact, and after prices went down and credit dried up it took many by surprise. Companies that were able to borrow vast amounts this time last year now see that their credit has dried up. This puts a strain on their cash flow, hence the request that you accept a smaller bonus.
As to the Ratification; without seeing it, or the 2008 lease I'd hate to speculate really as to what you should do. I suggest you see an attorney on that one. A "ratification" of an oil and gas lease is generally a confirmation of a lease executed by a concurrent owner other than the original lessor, so it may be that in 2008 someone other than the current owner signed that lease. I would have to see both to be sure.
Hope this helps you out, Amanda.
Frederick M. "Mick" Scott CMM
