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 Margaret Wren on -
You said it all.
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Permalink Reply by T16N R14W S09 on
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Now that all of us have all this "information and knowledge", we are no longer bound by ignorance of the HS play, right? So, then it becomes a personal choice of how we negotiate our lease. What's dumb to me, may be smart for you and vice-versa. Just give me "information and knowledge" and trust that I will make the wise decision as I see it at the time.
Could it be that my life situation is such that I am simply too busy to worry over this issue and choose to pay someone to handle it for me? Kind of like paying someone to mow my lawn (yes, I have the "knowledge and information" to mow my own lawn)!
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Permalink Reply by Snake Stewart on
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If you are in a possition financially that this deal really doesn't matter to you at all , then I for one, would be happy to have you donate your minerals to me .
If you are that busy, shouldn't you use your time more wisely and get to work early this morning , instead of posting on this ridiculous post.
Do you still pay your "landman" when he isn't still cutting your yard in the winter ? That is certainly your right and I respect that but please don't blame your "knowledge and information" when you are still paying your "landman" when he isn't even still cutting your grass.That may make you seem rather frivolous with your money and someone may try to take advantage of you.
Just my opinion.
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Permalink Reply by Bandit, UMO on
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Without a group to negotiate, I would get virtually nothing for my little 1/4 acre and I would probably have to spend what little bonus I get on hiring an attorney to review the lease clauses before I sign. To join a group and hire a seasoned professional familiar with the clauses to negotiate the lease to ensure that the landowner is protected is smart, especially if there are no O&G savvy people in the group's membership. The lease is a binding contract that will probably last 60 years or more. I agree that it's not wise to pay a percentage of royalty forever, but paying a percentage of the bonus is reasonable for the services of a professional. I would rather have 96% of what a group/negotiator can get for me than 100% of what I can negotiate for myself.
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Permalink Reply by keb on
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all groups don't charge a fee. Most groups I read about were composed of landowners who paid a fee for a lawyer to write up a contract; each member paid a small fee for services.
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What's up Snake?
1. The money is important to me, I just don't stand to make enough money to worry with the effort.
2. I'm at work and have been since 7PM last night (don't tell my employer).
3. It's a one time payment to "cut my grass". No cut, no pay.
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That doesn't sound quite as bad.Easy with those all nighters. People may start to think you're O&G. HA!HA!
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I didn't even know how to spell O&G until about 2 months ago when I came across this site. And now I know it stands for Oil & Gas. Information and the internet is wonderful!!!!!
I find the posts on this site amusing. I will spend hours at "W" (I even hate to say the word) reading them. It reads like a mystery novel.
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Permalink Reply by bullbayou on
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I guess that Pat is another of those uneducated people that seem to forget that this IS America, and if you do not want to use a person that gets a small percentage then you don't have to. Just do it yourself. I am sick and tired of hearing all of that crap. Just go out there and lease your property yourself.
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Permalink Reply by Margaret Wren on
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I didn't get the impression Pat meant no group, I thought Pat meant don't use a group that is giving a lawyer a percentage of the bonus and royalties!
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Permalink Reply by Har C2 on
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Each person has to make his or her own decisions. If you do not get professional advice because you do not want to pay for the services of a professional that is your business.
If you make a mistake in the writing of your contract with the o/g and you end up getting taken advantage of, you will be wishing you had obtained professional advice.
I am not paying a % but I will pay an hourly fee for legal advice. There are ethical lawyers regardless of the lawyer jokes, etc...... FIND A GOOD OIL AND GAS LAWYER AND PAY FOR GOOD ADVICE.
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