I'll start with the following copied post from Kassi on another thread:
I spoke with Patton Energy for my group as well. I chose to turn the offer down on our behalf after researching the company. I could not find ANYTHING about them on line. I started asking around about them and found 2 groups who had tried to deal with them.
One accepted the offer they signed a 30 day contract. The deal was like this: you sign a 30 day contract. He then tries to find someone to purchase your contract for more than what he is paying you. If he can not find a buyer he cuts you loose from the contract. Meanwhile, you are out of negotiation with other companies for 30 days. This group got cut loose after 30 days. No $27,000.00 and no 27%. Instead 30 days later they had to regroup and start over.
The second group made an appointment for Mr. Patton. He never showed up to the meeting.
You have to remember folks not every company is one you want to deal with. You should research all companies in depth. Look at their track record, their experience with horizontal drilling, their stock market history, their legal history. Make sure the company you deal with has the funds to actually pay. One man around here had a check for around a million come back NSF after signing a contract with a smaller company. If you deal with a smaller company make them put the money in a kind of escrow account prior to signing. This is a business deal folks, treat it as such. Either get very savy yourself or hire someone who is.
This is true. I posted this on another thread. Please be very careful who you deal with and research them well. This man may be very nice and may pay some folks well, when he can find a buyer, but it is risky in my book.
Another company recently come to the play is M.L. Benedum. I spoke with this company as well. Researched and again can find no information regarding the company. I did find a couple of articles from a few years ago about a wild catter named M.L. Benedum. I think this may be some relation to him. They may turn out to be reputable but so far my research is not turning up the kind of things that make me feel comfortable about negotiating with a company.
In 1908 Mike Benedum and Joe Trees came to the Caddo Field and leased 130,000 acres. They were the first to cement a well in. They had little success at first with the wells they drilled and decided to go six feet deeper than any of the other wells in the Caddo Field they brought in a well that did 3000 barrels a day. Standard Oil tried to put the squeeze on them through a railroad that they controlled by not letting them move the oil. Benedum & Trees complained to the Federal Government and finally were able to move their oil. They developed plans to build a refinery but were bought out by the Ohio Oil Co., a division of Standard Oil, for 5 million in cash and 1 million more after the first 5 million dollars of Caddo crude was produced. Their leasehold interest went on to produce over 1 billion dollars worth of oil and gas.
The first thing I would do is search the Louisiana Secy of State corporate database. Any Louisiana corporation, LLC or partnership, and any non-Louisiana corp, LLC or partnership that has qualified to do business in LA will be listed.
It's suspicious, but not necessarily a deal-breaker, if the entity is not listed or has registered recently.
For example, Patton Energy, LLC is not listed as of 8/3/08. (There may be a little bit of a lag, so it's possible that it registered in the last several weeks, but that would still be suspicious.)
FYI, I'm a Texas registered company, not Louisiana, and have bought, sold and traded oil and gas leases, land and other assets in Louisaana for years and have never registered or have been required to register with the State of Louisiana.
I think it is a mistake to think that if you do business in Louisana you have to register with the State.
Any corp, llc., etc. doing business in the State of Louisiana is required to be registered with the Secretary of State's Office. If you are an out of state corp, llc, etc., you should be registered as such. Business Law 101
I found several Enron reports that listed a Lone Star Land Development as a subsidiary. Given the Enron colapse I am sure they have spun off if it is the same company. Can you share contact information about them?
As exciting as this is, we know that we have a responsibility to do this thing correctly. After all, we want the farm to remain a place where the family can gather for another 80 years and beyond. This site was born out of these desires. Before we started this site, googling "shale' brought up little information. Certainly nothing that was useful as we negotiated a lease. Read More