2 of the brokers (of the 3 I have carefully negotiated with) put in their proposals that my undivided interest is 2.96 net acres but they are otherwise lowballing on everything.
The broker that has been the most pleasant to deal with (Bearcat Land) and has been gracious in their proposals says my interest is only 2.22 net acres. When I asked how this difference could possibly arise Bearcat in essence has been saying the other 2 brokers did not do proper due diligence.
Rest of the family has already been paid smaller bonuses by other brokers, but based on larger acreage (all of us have the same undivided interest). Bearcat proposes larger bonus but on smaller determined acreage.
I of course want larger bonus on precise acreage (hopefully the larger figure).
Bearcat also refuses to put bonus information in the Lease itself (only in a letter which they refuse to incorporate into the proposed Lease). Asking me to trust them.
I really like Bearcat except I can't see how far off they are from 2 other companies.
Any way for me to accurately ascertain what the correct acreage is on which the larger bonus is based. Or do I have to "trust them" on that too even though 2 other brokers have it higher acreage?
Thanks for feedback and guidance.
Michael,
The acreage and bonus is never shown on the lease. As Bearcat told you it is in an exhibit or offer letter. Have they not given you a specific reason for the difference? If it was found during their title verification process they should be able to tell you what they found that was different from the others.
I strongly disagree with the opinion above by DM. There is no way I would leave 3/4 acre on the table if it was rightfully mine.
DM, I'm not saying make it a deal breaker but I believe you are better to not have any cloud over your title to begin with. I noticed a mistake the Landman made after our well was spud and I have been trying to get it straight for 6 months now. I won't know anything until I get division orders. If it doesn't come out in my favor then it's time to "Lawyer-Up ". In the words of Nancy Pelosi " We won't know whats in the bill until we pass the bill".
Most leases have a provision to correct the lease if it is not the correct acreage. Likely it will correct itself in the final title process when the division orders are prepared. But I’m not sure I would like to wait for that to happen. What if it is not drilled. 65% of leased acreage is not drilled during the term of the lease and you are out any bonus you would have gotten.
I would look to see if I could correct it before you sign. Everyone seems to want to get into a hurry to sign. 95% of the time, it is not in your best interest to get in any hurry. You may be in the first contact round.
I too like the way most of the Landmen from Bearcat have treated and negotiated with me. But, the bottom line is I must do what is best for my family in our situation. You need to do the same. My priorities would been the language of the lease to make sure it had all of the clauses I want, Royalty Interest, Least term length, and then bonus amount. You should have Depth clause, Pugh clause, No deducts, Shut in, No extension option etc. These things may affect bonus amount or RI, but they can be much more important.
Most of the Landmen you will talk to from Bearcat are not the ones who had anything to do with determining the ownership. If you have a deed or title info, send it to them and ask them to compare. I’ve had some send me the title chain of our ownership. You could also put that provision in the lease.
What I would not want to do is lease it 3/4 s of an acre short without a PLAN. If it has an “intent” clause, saying “it is the intent to assign all of the property in Sec xx-1N-6W to the Grantee” ask to strike or modify that. That is a good clause for the grantee and common. If you have 2.24 instead of 2.22, it makes it quite the mess when title is ran. Now they need another lease for the .02 acre. But I would not want that cause as written when I am pretty sure they are off by 33%. I don’t mind it if I know it is perfect or very close. If I was very happy with the rest of the lease and the bonus was good even with the acreage cut, I would ask to add, “not to exceed 2.25 acres to the line.
I would also ask that the full legal description be used.
Instead of N/2 of SW/4 I would ask for Undivided 1/36 mineral interest in N/2 of SW/4 as they describe it. Then you could lease that other ¾ acre to one of the other companies.
What legal are talking about? 1N-6W by chance?
Michael and Rick have it right. You need to have determined what your actual ownership is as well as the rest of the undivided owners. Demand the proof from Bearcat. At least that would be a start. If they present you with the proof that your interest is smaller, and that makes the rest of the undivided mineral owners smaller too, contact the other two interested parties and ask them for their proof of your larger interest. With this procedure you will likely run into some stone walls.
Thanks for all the good ideas. The proposed royalty is the same from all 3 brokers. I have (rightly or wrongly) focused on the amount of the bonus. Bearcat was supposed to call today (they did not) and when/if they do I will insist on proof as well as review the boilerplate lease to see if an auto-correction clause is in there,
Many thanks to everyone.
What area Michael?
Some of the ones that have been calling me from Bearcat are not leasing from the same title work. Even within the same section. In other words, landman A is leaseing the NW/4 but Landman B has the S/2.
Rick sorry for the delayed response.
"The SW quarter (SW/4) of Section 32, Township 2 South, Range 4 W.I.M. containing 160 acres MOL"
Hope this helps. we're about ready to sign, got a decent bonus after much back and forth with Bearcat. On the whole I endorse Bearcat and trust them but we pretty much had to ask for everything. Much more generous as to bonus than RD Williams (by far).
Assuming we actually get the check after signing the Lease of course!!
Michael A. tell them you want money in your hand before you will sign the lease, have them meet with you or send them a copy of the signed lease and tell them they get the original when you have money in hand. The last two leases l signed the landman brought the money and the lease was signed infront of him.
Mr. Pruitt:
Again sorry for the delayed response.
Logistically (we are on the East Coast, Bearcat in Oklahoma) it would be impossible practically for Bearcat to come here or vice versa.
At some point we decided to take a leap of faith and sign the lease.
The Bearcat guy stood on his head to make this happen. He responded to all of my incessant questions and concerns--though I may not have asked the right ones (royalty rate never questioned by me).The bonus they wound up agreeing to pay was significantly greater than the one proposed by RD Williams (the rest of the family took the lower RD Williams bonus).
Bearcat said we could expect to receive the check in about 4 weeks (1 week passed now).
Thanks for the feedback.
Update in the no good deed goes unpunished category. In my last post I said 1 week (as of Sept 2) had passed awaiting check on agreed deal.
The Bearcat guy at one point before we signed papers asked if we wanted him to "expedite" delivery/payment I said no, just get it to us in the normal course (he had said no more than 30 days).
Now October 13th. Still no check. Approx 6 weeks and counting.....and waiting.
I did I lease w bear cat and six months later found out they never recorded it. They also refuse to put clauses in that I request so I dont deal with them anymore. I have many leases w them that are ok but recently they havebeen hard to deal with…
They have also disputed the correct mineral interest amount on some of mine as well. I also reside out of the state of OK so it is difficult. They have always sent my bonuses after sending a signed lease so you r probably fine…just keep bugging them!
I'm waiting as well with Bearcat but it's only been 2 weeks since I signed the dotted line so we'll see how it goes.
What Section Township and Range is your interest in?
Any luck Michael? Just got my bonus in the mail today...woohoo!