Is that typical and how can we protect ourselves? The landman we are in negotiations with is PS Dudley from Colorado. We have heard from others that he is with a Houston based company. Does anyone happen to know Mr. Dudley or even heard of him. We have come up empty with our search for any info about him. Greatly appreciate all the info we have learned since we found this site. Awesome network!!
Actually, I believe that you are referring to T. S. Dudley. Tom Dudley is an oil and gas lease broker based in Houston. He has offices all over. If his agent tells you that he cannot disclose his principal, then he is very likely telling you the truth. Some clients do not want their name disclosed, others do not care.
It is not necessarily typical but is not uncommon. You try to protect yourself by negotiating the terms of lease as you want them to be, by refusing to lease to companies you don’t want to work with, and refusing to lease to unknown companies. However, the truth of the matter is that one can negotiate in good faith with a good company and then they turn around and sell (assign) the lease to someone else that you don’t want to work with. Ask a lot of questions, use your best judgment and intuition, and hope for the best. Your best bet is to have a large percentage of the acreage desired and/or to group together with the other mineral owners in a negotiating unit.
Thank you so much! They have made an offer to lease 900 mineral acres we own in the Bakken so just knowing we are dealing with a reputable company is a relief. We are really green at all of this. I read an earlier post where you are mending from what sounded like a really tough surgery!! You’ll be in our prayers for a speedy recovery.
Thank you Dorothy! Getting the name straightened out helped us immensly!! Good to be able to read about them. It left us feeling more confident about negotiating. Next step is finding out if their offer is reasonable/comparable for Bottineau Cty.
Dorothy Johnson said:
It is not necessarily typical but is not uncommon. You try to protect yourself by negotiating the terms of lease as you want them to be, by refusing to lease to companies you don’t want to work with, and refusing to lease to unknown companies. However, the truth of the matter is that one can negotiate in good faith with a good company and then they turn around and sell (assign) the lease to someone else that you don’t want to work with. Ask a lot of questions, use your best judgment and intuition, and hope for the best. Your best bet is to have a large percentage of the acreage desired and/or to group together with the other mineral owners in a negotiating unit.
One compromise is for you, the lessor, to require written consent to assign by the lessee with the usual troublesome language qualifier of “consent not to be unreasonably withheld” … yeh, what constitutes “unreasonable”? Think about it this way: if you’re a stockman and a cattle contractor wants to buy your herd at a competitive price do you want to have any control of who he brokers the herd … say, maybe not to Methodists, or Sooners, whatever? TSD is a prominent and well-respective firm with industry-prominent clients: likely EOG.
Thank you Rocky. The “oil fog” is clearing! Your analogy was perfect for us cause we actually raise cattle!! TSD made us an offer of $105 per acre and 3/16 royalty on 1000 mineral acres we own. Not a clue as to what others in our area have been offered. No ones willing to talk!! What’s your opinion of that offer?
No disrespect intended to Mr Dudley, I’m sure he is very reputable. In your analogy, you might want more information about who the cattle contractor intends to broker your herd to if you need to collect your payments from the last buyer of each cow.
Rocky Arrell said:
One compromise is for you, the lessor, to require written consent to assign by the lessee with the usual troublesome language qualifier of “consent not to be unreasonably withheld” … yeh, what constitutes “unreasonable”? Think about it this way: if you’re a stockman and a cattle contractor wants to buy your herd at a competitive price do you want to have any control of who he brokers the herd … say, maybe not to Methodists, or Sooners, whatever? TSD is a prominent and well-respective firm with industry-prominent clients: likely EOG.
Non-disclosure of a land agents client is a problem from our point of view. I prefer to know who we are dealing with so we can do research on the Company that will be drilling our mineral property. I want to know something about an Operator’s drilling, production, and completion performance and also check on their financial soundness. This may be a problem in leasing our mineral properties but of the last half dozen leases I have negotiated the Land Agents complied with our request to disclose the Operator. For example, we had one case recently where a land agent contacted us about leasing our minerals. The agent did not wish to disclose the identity of the Company. I told the agent our policy and finally the agent disclosed the entity and had the Company contact me directly. It turns out it was a one person geoscientist consultant who wanted to develop a prospect and peddle it to other Company’s. We declined the offer on this type of situation. So it is important to know who we are dealing with.
Mr. Edwards, I too have no disrespect for Mr. Dudley but I can tell you that we were contacted by a landman for that company here in TX when the Eagle Ford Shale interest reached our county. They were the first company to approach us and had an especially low ball offer. We waited and were soon contacted by other landmen with higher, better offers. Dudley also made low offers to many of our neighbors. Most everybody has waited and many of us have made reasonable deals with other companies, some in excess of 1000 per acre. I don’t know if the same would apply in your area, I’m just relating what happened in ours.
Andrew C Edwards said:
Thank you Rocky. The “oil fog” is clearing! Your analogy was perfect for us cause we actually raise cattle!! TSD made us an offer of $105 per acre and 3/16 royalty on 1000 mineral acres we own. Not a clue as to what others in our area have been offered. No ones willing to talk!! What’s your opinion of that offer?
Thats right !
Mike Igau said:
Non-disclosure of a land agents client is a problem from our point of view. I prefer to know who we are dealing with so we can do research on the Company that will be drilling our mineral property. I want to know something about an Operator’s drilling, production, and completion performance and also check on their financial soundness. This may be a problem in leasing our mineral properties but of the last half dozen leases I have negotiated the Land Agents complied with our request to disclose the Operator. For example, we had one case recently where a land agent contacted us about leasing our minerals. The agent did not wish to disclose the identity of the Company. I told the agent our policy and finally the agent disclosed the entity and had the Company contact me directly. It turns out it was a one person geoscientist consultant who wanted to develop a prospect and peddle it to other Company’s. We declined the offer on this type of situation. So it is important to know who we are dealing with.