Paying % of Bonus or Royalty should be illegal
With the public knowledge of the Shale now, NOBODY would lease their property to any Oil and Gas company for the few dollars an acre they were getting last year. You have more information and know better now. In fact there are people so mad about "being taken" only a few years or even months before everybody knew about the Shale they have class action lawsuits against the O & G companies trying to void the lease. Good luck.
Use the same knowledge to understand that if you pay an attorney or anybody else a % of your bonus and especially a % of your royalty to negotiate a lease for you it is the same as turning down an offer for thousands an acre and instead saying you want the hundreds an acre they used to offer. Now that you know how valuable your minerals are you wouldn't take hundreds.
Where are the class action law suits against the CPA's and attorneys that took advantage of everybody early on and got them to sign a lease for a % of their money while also getting the O & G companies to pay them a percentage of that money too. The only other business I can think of that gets paid by both sides like that is a sports bookie.
If you are lucky enough to have a royalty check for 10 or 20 or 30 years, do you really think that somebody that played both sides of the deal at the beginning deserves part of your check?
There just is no way that the guy negotiating can have you AND the Oil and Gas companies best interest in mind at THE SAME TIME when he is negotiating. You want a higher lease bonus and royalty and the Oil and Gas company wants a lower lease bonus and royalty. So who do you think he would be working harder to please? I know who my guess would be.
It just isn't smart people. You have more information and knowledge about all this now. It just isn't good business for you to pay a percentage and I don't know how anybody that charges you 4%-5% can possibly still have a good reputation. Especially the ones that have you sign paperwork that says you have to pay them even if you find a better deal with someone else. How do they get away with this stuff?
I'll step off the soap box now. I just hate to see people throwing away money. One day it will make a big difference to you when it all becomes clear.
Use the same knowledge to understand that if you pay an attorney or anybody else a % of your bonus and especially a % of your royalty to negotiate a lease for you it is the same as turning down an offer for thousands an acre and instead saying you want the hundreds an acre they used to offer. Now that you know how valuable your minerals are you wouldn't take hundreds.
Where are the class action law suits against the CPA's and attorneys that took advantage of everybody early on and got them to sign a lease for a % of their money while also getting the O & G companies to pay them a percentage of that money too. The only other business I can think of that gets paid by both sides like that is a sports bookie.
If you are lucky enough to have a royalty check for 10 or 20 or 30 years, do you really think that somebody that played both sides of the deal at the beginning deserves part of your check?
There just is no way that the guy negotiating can have you AND the Oil and Gas companies best interest in mind at THE SAME TIME when he is negotiating. You want a higher lease bonus and royalty and the Oil and Gas company wants a lower lease bonus and royalty. So who do you think he would be working harder to please? I know who my guess would be.
It just isn't smart people. You have more information and knowledge about all this now. It just isn't good business for you to pay a percentage and I don't know how anybody that charges you 4%-5% can possibly still have a good reputation. Especially the ones that have you sign paperwork that says you have to pay them even if you find a better deal with someone else. How do they get away with this stuff?
I'll step off the soap box now. I just hate to see people throwing away money. One day it will make a big difference to you when it all becomes clear.
Views: 150
Replies to This Discussion
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Permalink Reply by Pat on
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Yes there is a difference. You don't continue to pay that broker a % of money as long as you live in the house like you will being paying the attorney or CPA that charged your a percentage of your royalty.
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Permalink Reply by DYST_JP on
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There is some difference. Real Estate Professionals are governed by the State. So if they screw someone over they lose their license and can not work anymore. Is this the same with professional landmen? Real Estate law states that there is full disclosure on the sale of real property, is this the same with O&G lease and landmen?
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Permalink Reply by Kassi on
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That is one of the things we would like to lobby for once we get CANLLA going. There needs to be some form of regulation for landmen like there is for real estate agents. At the least there needs to be some form of continueing education requirement.
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Permalink Reply by Bobi Carr ("parker") on -
Don't forget to regulate the negotiators they stand to gain (or fleece) more than many a landman ever thought about taking.
What's good for the goose is good for the gander.
Anyone who wants to play in the big league should be happy at having a standard set.
I know that regulations usually weed out some of the bad seeds and those who are professionals are usually glad to meet the standard.
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Permalink Reply by keb on
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Kassi, please contact me at my email address:efon911@yahoo.com;Kathlyn Barnes. We have property in Keatchie and would like to join the group you are forming. We have other landowners also who would be interested.
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Permalink Reply by P.G. on
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Don't forget the Real Estate commission designed the standard purchase agreement. Anyone can download it from their website. Who designed the standard O&G lease?
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The Oil and Gas industry. Same ones that designed the laws. That is why it is important to negotiate a smart lease and to lobby for a few much needed changes in the laws.
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Permalink Reply by P.G. on
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The Real Estate Commission designed the purchase agreement so that they would be fair to both parties. Maybe there needs to be a commission to do the same for these leases, huh?
At least have some kind of disclosure as to what the impact of each clause means in lay terms seeing how land owners aren't reasonably expected to be legal experts.
The reason the Real Estate Commission was formed in the first place was to protect the unsophisticated public.
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Permalink Reply by keb on
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amen to that! I wholeheartedly agree. There should at the least be some sort of disclosure in 'laymen's terms.' Far too many people have been taken advantage of because they just didn't know.
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Permalink Reply by keb on
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I'm with you Kassi. Let's get to work on the 'smart lease' and I am ready to lobby for changes in the laws.
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Here is my concern. No one in this discussion is talking about what is more important than the money. The money will spend fast but your property and what is alowed to happen to it and around it can have a long lasting impact. There are a lot of folks out there negotiating leases for more money than you can get on your own. But most are settling for the standard lease or one with a few addendum that are not nearly as tough or in depth as they need to be.
What about negotiating strong environmental and land owner protections. Negotiating the money end of things is easier than negotiating those aspects of the lease. Negotiating a quality lease that is specific to the needs of the land owner and looks beyond today into the future is not as easy as one might think. One must draw from legal, environmental, geological, Oil and gas drilling, and business resources to really put together a comprehensive coverage package. Then that person has to have the ability to negotiate well to get a final product the O&G company will agree to and the land owner and future generations can live with. Remember, the lease you sign today will last for generations. Do not stick the people who come after you with something you and they will regret. It is about more than the money folks.
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Permalink Reply by Snake Stewart on
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It is easiest for me to use or group. We have the potential to have to pay someone roughly $2,500,000 for bonus only fees on a $10,000 per acre deal. What planet does the guy/girl come from that is worth that kinda cheese ? Thats not even figuring royalty % that some are still trying to envoke!
I have seen more deals backed out on by pros in the last month because of deals they are making on their other properties in other parts of town.Trading favors in one part of town for another. Especially when he is working for royalty %. He gets the same money whether or not he represents you and yours or cuts your legs out from under you.
There are plenty of weak kneed people on this play that are fearful of the O&G's leaving or of taking advantage of them. Unfortunately some of the folks they are hiring are a bigger threat then the O&G's.
There are many different styles and strategies at play on this shale. Some have been successful , most have not. There are even some that believe SWAMO isn't a force on this play and that we will fail to come through at the end of the day because of our approach or my delivery. Some of those have already been laid to rest and are now looking out their windows wide eyed because the offers are still moving just like most of the vets on our side told them they would.History is the best indicator as too whether something was a bust or brilliant. History on the Barnett has taught me most of my approach , the rest is about right and wrong for me with a dash of Snake mixed in there. If I am wrong then there will be more lost then bonuses but thats something that human nature dictates, not I.
At the end of the day you will be answering for what you have decided to do.You can try to blame someone else but its on you at this point. There have been many days that I have been unhappy about the days events and I have had to pay for those things in a personal way. I am a big boy and as long as I make mistakes trying to do the right thing then I believe that I will be able to live with that. There are those that I have offended on this site out of anger. For that I am truely sorry. For the others that I offended because of who you appear to be as an individual , get over it ! If you are making a living fleecing sheeple, ( no thats not a typo ) 1/2 sheep ,1/2 people , then you reek to me. I will just have to find a nicer way to say it , thats all !
P.S. Sheeple is copyright protected and borrowed from my friends Earl and Earlene , shout out to my homies ! SOUTHSIDE !
P.S.S. By the way "GOOFY" , I should and did take it personal. SWAMO was here before you got here and SWAMO will be here after you are gone ! It wont be a group "like" SWAMO. You have made your bed.
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