This is a caution note to folks who may be getting offers from a certain company that has a $500 Collection item attached to the bottom and a teaser of $3,000,000 at the top. It shall remain nameless since I have had similar offers from two companies like this. I have run into these guys before and I am sure they have a herd of attorneys. Please read any offer like this carefully. Note that they want you to grant them power of attorney, agree to their mediator, their venue. They can withdraw the offer at any time. They want you to hand over a signed conveyance without getting any money. (I would never hand over a deed or a lease without getting money at the exchange.) Note that the draft does not specify how many days until it “might” be able to be cashed. They want a deed, your 1099’s, your leases and your social security number and never tell you when they will pay? They want you to do their title work for them. Sounds suspicious. If you even consider this deal, talk to an attorney first. Tell the attorney to check the company with the Better Business Bureau and run a check with the Attorneys General of OK and KS.
Now lets get to the offer. They want me to multiply my decimal amount by $3,000,000. For a an old vertical well that I have interest in, that would be about $5800. However, I have had the engineering done on that well and at $50 oil and $3.00 gas just for a guesstimate, that well has $82,000 worth of value left. And they are moving in the rig to do a horizontal well very soon. No way would I sell. These two companies have sent me multiple letters over the years offering to take these “old” wells off my hands. In every single case, I don’t even answer them and have had very nice horizontal wells-many times multiple horizontal wells- follow soon after.
I have marked over the pages of the offer in black magic marker DO NOT DEAL and made a note in my files so that my children will be aware.
Please check the reputation of any company that offers to buy your minerals. Get offers from several companies if you feel you need to sell. Reputable ones will do their own title work and bring a check when they exchange for the deed. Learn about your area. Check the investor presentations of the operators doing business. See where they are doing drilling next. Check the OCC well records in the sections around you to see if horizontal drilling is coming. Ask questions on the forum. Be mindful if you have relatives that may not be as watchful as you are. We have to be energetic in protecting our mineral stewardship.
When I got a batch of offers from them a few years ago, it looked like an offer for one tract, but when I read the fine print, it was for everything I owned everywhere for a measly $200. Yes, I have looked them up on the Better Business Bureau and Googled their legal issues in various states.
Good Post. There are so many things wrong with the “deal” those folks offer, it would take a 30-page lawyer’s brief to educate the mineral owner.
I have heard that if you sign and return the mineral deed, they will RECORD it before they even verify what you own. That nasty little trick keeps you from selling to a legitimate buyer who makes an acceptable offer to you.
Thank you M Barnes for this valuable information! You have probably saved many folks & families! I appreciate the input and knowledge that is shared on this site. Laura
I have received at least 5 of the offers that you are talking about within the last few months and I just file them away. I had a bad experience with the same people about 10 years ago.
I have had many of those offers iver the last 3 months. There is a prepaid envelope with it. I rip up the offer and mail it back. Figure they have to waste labor to deal with it. Maybe they will get the message. I do this will all my junk mail.
I too have a file for the kids. Have them calling my brother or our lawyer.
Very informative and helpful, Martha. I’m curious about one thing you mentioned - having “had the engineering done” on the well for a guesstimate of remaining value. Is that something an ordinary mineral rights owner can arrange to have done? I presume it must be costly, though. We have had wells in OK continuing to produce gas and natural gas liquids for long enough that we have begun to sort of count on the income, but really have no clue how long it could last. We own the mineral rights only, not the land.
Yes, an ordinary mineral owner can have a licensed engineer evaluate their wells to have the value of remaining production calculated. It is not that terribly expensive, but that is a relative term. I have had to do it for probate purposes. Seems expensive if the well pays $2.00 a month, but not expensive if the well pays $3000 a month. If you have quite a few wells and heirs, then it is something to think about doing for estate planning purposes. My grandparents and parents did that and set up LLCs and trusts to wisely pass on the mineral rights in the most tax advantageous way. We have some wells that have been producing since 1919. Gas wells in good reservoirs tend to last longer.
HI ,I was Just wondering if anyone has ever done business with Vandetta Royalty Partners
I seen that the SEC had a complaint on them but not in Oklahoma and were found guilty in Texas . I believe they have scammed people in Oklahoma also if this isn’t appropriate I will delete
Ponzi schemes sometimes pay well above market rate for leases and minerals. The primary objective in dealing with them is being certain you get paid before you deliver a lease or mineral deed to them.
Two of my clients received letters trying to get them to sell their minerals from a company called Great Southern Minerals. No documents at the county clerks office with that name on them and it looks like the company is out of LaFayette, LA. Has anyone dealt with them or know if they are legit?
I have gotten letters from them for years. Have not dealt with them as I don’t sell. Not on Bizapedia. They have an A rating from the Better Business Bureau in Lafayette.