Watch out for phone "solicitations", etc.
I got a message yesterday on my answering machine from a young lady who said she was representing Empire Energy. She left a phone number with a "337" area code (Lake Charles area?). Called her back and got the most outrageous bunch of malarkey about how your "surface acreage" is one amount and your "royalty acreage" is more (about 3X from her examples) and did I want to sell part of my "royalty acreage" to Empire for $4000 per acre. She never once referred to this as what it was-an offer to BUY some or all of the mineral rights on property. I told her to send me all of what she had said in writing and that I would have an attorney review it, but she shouldn't hold her breath until I got back to her. (Note to NY Times: we are not a bunch of semi-literate, inbred dummies sitting on our porches strumming our banjos.)
Have since talked with a few other relatives who report that there are several other unscrupulous people/groups out there that are trying to hoodwink people into selling minerals without using those terms. One company sends a bank draft, and in miniscule print explains that taking the draft for collection amounts to an agreement to sell minerals for the amount of the draft. Another relative (in her 80's) was approached by an individual over the phone with some equally outrageous explanation of what they were trying to do but never once indicating that he was trying to purchase her mineral rights for bargain basement prices. Fortunately, she had learned from her experiences last year with landmen that very little is as it seems and told the person to "buzz off" in her polite Southern way.
Please make sure those around you, especially the elderly and the less informed, know that there are lots of con artists out there and not to agree to or sign anything without discussing with someone else and getting a clear understanding of what they are getting themselves into.
Have since talked with a few other relatives who report that there are several other unscrupulous people/groups out there that are trying to hoodwink people into selling minerals without using those terms. One company sends a bank draft, and in miniscule print explains that taking the draft for collection amounts to an agreement to sell minerals for the amount of the draft. Another relative (in her 80's) was approached by an individual over the phone with some equally outrageous explanation of what they were trying to do but never once indicating that he was trying to purchase her mineral rights for bargain basement prices. Fortunately, she had learned from her experiences last year with landmen that very little is as it seems and told the person to "buzz off" in her polite Southern way.
Please make sure those around you, especially the elderly and the less informed, know that there are lots of con artists out there and not to agree to or sign anything without discussing with someone else and getting a clear understanding of what they are getting themselves into.
Views: 45
Replies to This Discussion
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Permalink Reply by Shep Jones on
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Layla:
This person was obviously trying to purchase royalty from you. The person that you spoke with is right in the sense that there is a conversion factor when dealing with "royalty" acres and "surface" acres. There are 8 royalty acres to every 1 surface acre. This is based upon the fact that when people strarted buying royalty in the 1940's, the standard royalty figured given by oil companies was one-eighth (1/8th). Hence, that is how they came up with the conversion factor stated above.
Be careful when dealing with royalty buyers. They are notorious for trying to buy royalty on the "cheap". Also, unless specified otherwise in your royalty deed, when you sell royalty, you are creating a royalty servitude which is just like a mineral servitude in the sense that you are giving away your royalty for a period of 10 years. This time period could be extended for an even longer time period should your acreage be put into production.
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Permalink Reply by layla on
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Thank you for the information Mr. Jones. I had never heard of this type of arrangement before. It sounded sort of "fishy" the way the young lady was explaining it and from your explanation it sounds like something that could open up a real problem if one were not very careful.
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