Glade Road group, XTO at odds over returned leases

Glade Road Neighborhood Alliance, representing about 1,500 landowners in northern Hurst, reports that XTO Energy and its land agent, Holland Acquisitions, has returned hundreds of leases that its members signed at formal meetings with the only explanation that they were "not accepted" and no bonus will be paid. Organizer Jim Whelan said his group estimates that between 40 percent and 50 percent of its members signed leases before XTO rescinded its offer on Oct. 16. XTO was offering a $24,000/acre bonus and 25 percent royalty. "Our view is they invited us to a signing party and the terms were negotiated," Whelan said. Alliance leaders are examining options, he said. XTO declined to comment.

In the wake of the sudden halt in Barnett Shale leasing that hit in October amid plunging natural gas prices, producers typically stated that anyone who had returned a signed lease or had been issued a bank draft would be paid a signing bonus. Neighborhood leaders in Southwest Fort Worth, Colleyville, Bedford, Arlington and elsewhere have all reported that producers dealing with their groups have honored that commitment. And according to the Alliance, XTO sent this email to organizers on Oct. 16:

XTO Energy regretfully rescinds the offer to GRNA immediately.

Holland Acquisitions signed 80 leases last night on behalf of XTO. The signing event last night was for the Wintergreen II neighborhood, and the only folks who were turned away were those from other neighborhoods, for whom Holland did not have paperwork prepared. Again, no one from Wintergreen II was turned away, and Holland closed up shop when no one showed up for 45 minutes. Anyone who has signed a lease that Holland has in its possession as of last night will be paid.

The volatile market conditions we are all living through have caused corporations around the globe to refocus corporate strategy.

Regards,

Ryan M. Skelly
XTO ENERGY INC.
810 Houston St.
Fort Worth, Texas 76102 

Instead, "anybody who went to the signings and signed with Holland - all those leases were returned by XTO," Whelan said. "There's a lot of people who are not too happy about it."

-- Jim Fuquay

Comments

[BC]

Liz - you are wrong! Leases are not typically signed by both parties. Since you obviously are not familiar w. oil & gas leasing you should look at a standard apartment lease to see if it is signed by both parties. Also Williams (Tulsa) is not the same as Williams (Midland).

[Erin Sharrieff]

This just reassures me that we made the right choice in choosing Ceasapake over XTO who tried to trump the deal we had but we stuck with our original deal and now we don't have to deal with stuff like this. I hope someone finds a way to give XTO what they diserve.

[Lizabeth]

I think any judge will tell you a contract isn't a "done deal" until BOTH parties sign.

[Jeff Hillard]

Wrong. XTO did not sign a contract with the 'Alliance'. The Alliance is merely negotiating for the good of the entire neighborhood(s) or subdivision(s). The Alliance doesn't own the mineral rights, each lot owner does. The energy company has merely made a verbal and written offer. Unfortunatley for these folks nothing is final in a contract until an offer from the energy company is made, that offer is accepted from the individual mineral owner (by signing the lease), and then by receiving the bonus paid from the energy company, and then the oil and gas lease being filed. If some of the people signed these leases and returned them to XTO, they can still rescind the offer by not paying a bonus to the mineral owner and thereby not filing said lease. You see, one of the elements of a contract is consideration passing both ways, and by the energy company not paying the bonus and thus not filing the lease, it is in fact lawful for them to rescind their offer as it stands. Fortunately for other people some other energy companies in this same situation 'honored' these deals, but are not lawfully required to. Thanks.

[HAHA]

Tommy you must be a heck of an oil and gas lawyer since you know so much. Read the paperwork XTO can resend that offer at anytime. HAHA and because one signs does not mean everyone has agreed. HAHAHA what a joke, every homeowner has the right to sign or not it is there land and a H.O.A. or some bs group can not force them to. You have no idea what your talking about but thanks for the great legal advice.

[Joseph]

I would have to disagree with you Tommy. There is only a verbal agreement which is only a binding form of commitment in the state of New York. The document is not a viable contract until it is signed and notarized by both the lessor and lesse. Due to the volatility of the market I understand the reason for the returned leases. There is little to no doubt that some of the individuals will acquire lawyers. And they will be fed the notion that they will be able to get the original offer. The only thing they will win is the exposure and a high bill from their attorney. There is always a chance that if you hold out too long. You will find yourself left out. This was the case in this situation. I feel no compassion or sympathy for any of the residence.

[Bill]

Offer
Acceptance
Done

[Tommy Hart]

Just because they did not sign the lease on the earlier date is not important. In effect the offer was given to the whole group. As soon as they accepted and signed one lease they accepted all the leases. The time in which the lease was signed was just a matter of convience for the company and should not be confused with the commitment. XTO and all other energy companies that signed one lease with a group in effect signed all the leases at the sametime. Cant wait for the lawsuits to hit on this one. When your talking about signing 1000's of leases it is not practical to sign them all at onetime they must spread them out in order to be functional but spreading them out does not give the companies the right to back out. When they accepted the deal with the organization or the oranganization accepted the deal and the 1st leasor signed the document, the whole deal is final. It will cost the energy companies a lot more in lawyers and they will ultimately have to pay what they owe to the residents.