Regina, Please do not take this the wrong way. I now know and understand why the landman has told you that his Field Director…etc. needs to be involved. Because if you have spent anywhere near as much of his time as you have on the forum I would have told you that as well. Not that it’s wrong of you, and I am not saying you like to hear your own points of view , or complaining . But we can’t afford to spend the time that you would require, even though we would like too the majority of the time. But in the very competitive work of obtaining prospect and position in a play. There aren’t enough hours in the day. I never really was a fan of forced pooling, but now I see why. I don’t believe people should have decIsions made for them concerning themselves or what is rightfully theirs. Adults should be able to make a decision right or wrong by themselves. But I can clearly see now the need for it, because without it someone that wants to make everything difficult can effectively keep others from being leased. Which in that case someone made the decision for them depriving them of a choice. In that instance which is worse? No money , no lease, mad neighbors…or forced pooling? Andnformthemwonderful idea of your database of leases. Sure , but realistically the geology makes the value, not your neighbors or the next town over… I have leased whole townships where the value was set section by section, and that’s what we could and did pay, or it wasn’t leased. So while your theories aren’t all half cocked. There is no way your lease you made would ever happen. I can see it now, one of my Landmen coming to me with your lease. I would laugh, but send it up the ladder to the land manager they would laugh, and then it would go the same way, prob till it reached the top and from there it would hit the trash. I pride myself with my ethics and standards in this business and there are many who don’t, however seems to me Imget screwed over in real estate all the time, the only thing is they are never paying me. That’s actually probably the reason for escrow in real estate now that I think about it, make sure right amount gets where it is supposed to go.
Regina:
What Tom says has a lot of merit; but, just remember where he stands. He may have great ethics and I'm sure he does, just remember. Also, as with buying or selling a property, there are positives and negatives to both sides of every situation. If my house is worth $400,000 and the market has bottomed out in my area, I'm not going to get that much, the same goes with the lease. In addition, if you own your minerals by yourself or you can call all the shots without intereference, you have one thing in your favor. If you have enough acres for a good horizontal well or multiple wells (>640 acres) you have another strong point in your favor. Now if you can say yes to these two elements, and you have done your homework and feel strongly about a specific point whether it is $$$'s for a bonus, percentage royalty or other lease provisions, then remember the important word from above. If Tom's company wants the lease they will talk, if they want to flip, they will probably walk; but, in my opinion, I would thank him. You were probably not broke when they came a courting, and you will get by without the offer that wasn't pleasing to you in the first place. If they wanted your minerals, they had a reason. If the offer is bad, then you probably haven't lost much anyway. Now you still have the minerals if they ever drill and if it is relatively good, you will get your day and it will be worth the wait.
Now, back to your scenario. 300+ acres, lots of relatives that can't come to an agreement. I think you have to look your lease over and be very reasonable and very cautious. I don't believe you should ever forget your magic word though. As Tom said, I hate mandatory pooling; but, it does have a place. I don't like the mandatory pooling rules, they are written to punish the unwilling mineral owner, in fact, I believe it is legalized theft; but, who am I to fight multimillion dollar oil companies, railroad commissioners and bought and paid for judges.
As the old saying goes! At least on this subject, "That's all folks"!
In closing!
This is in the Mineral Rights Forum News letter; but, I'm too lazy right now to look this up again and it is to late worry about it. Chesapeak is in a lawsuit in upstate New York, where they are worried about loosing leases because of a moratorium on fraccing. Originally, Chesapeak paid mineral owners $3/mineral acre for a large portion of their leases. Many of the leases since then have gone for $5000/mineral acre. I leave you with that thought.
regina redmond said:
Yes, an attorney would be helpful, but keep in mind their stock in trade involves over the top language, statements that the average person would find hard to follow. In recent years the trend has been to have clarity in contracts, meaning "in plain english". Our consumer credit laws have changed drastically because of the desire to present terms in language everyone can understand. So should contacts like the lease proposed to me by Exterra. It should be clear, definitions should be given to words that the "trade" uses, like a shut in well. I think the biggest misunderstanding would be the "forced pooling" or pooliing concept. In most cases, especially my families, the average person would not understand some clauses in the contract without giving it to a lawyer. It has been my experience, hiring someone close to the community is not always getting the best advice. I don't want to say the "good ole boy" network, but it does exist. Today, in this forum, it was posted that she was offered $750. per mineral acre and three sixteenths in Weld County. And that was just for 1.4 acres. I was told just a week ago, that $500 was the best Exterra could do and they went back on their word on the three sixteenths and reverted to 1/6. I think there should be a comp data base for this stuff, just like there is for real estate. I would like to know the value of the leases that did become effective in the last year. I read all the drilling permits and the drilling applications just to find a lease that was recorded. When I did, of course they had as consideration $10.00 +, thereby hiding or making confidential what the bonus was for that transaction. I did find what the royalty payment was because it was part of the lease. Mineral rights owners are at such a disadvantage when it comes to knowing the market. Then, how do you know if who you signed with is able to complete the lease, or did they just flip it. That is huge with me. I don't mind the assignment part, I just want to know who is at the end of the tail. So, yes I will be having fun trying to convert the legal jargon into "plain english". Regina:
I would also like to let everyone here know, that I myself was burned badly by my own lack of knowledge in this subject years ago when my land in the haynesville shale was leased for $150 per acre. When not two months later the land down the road leased for 15,000 per acre. So yes , I love what I do now , and it was learned out of a bad situation that was turned great . With a little help from a Landman out of Longview Tx. So I may work in this business and love it, but that never means we work against land owners. And apparently the pooling laws where you live are quite different than OK because everyone up here’s favorite saying seems to be “pool me”
Ok, enough said. I will "lurk" in this forum, reading everything. The project I will be working on is a challenge for me and if I do get to present it to a landman, I will. If you don't ask, you don't get. Well, got to go to work.
If anything truly amazing happens with this deal, I will let you know.