Replies to This Discussion

Permalink Reply by Skip Peel - Mineral Consultant on June 7, 2012 at 10:12

What do you mean by "controlling interest"?  If JB Land has contacted you they seem to think they you own an interest in the minerals.  Owners in undivided mineral interests may independently sell, lease, assign and generally manage their interest as they see fit.  Only in certain, specific circumstances does it matter what the other undivided interest owners do with their share.   The terms of the lease are important and the royalty and a few other considerations are more important than the bonus $ per acre.

Permalink Reply by Just want mine on June 7, 2012 at 16:33

Bless your heart and thank you for replying!!  Like I said this is the first time I've been contacted about leasing.  It's kind of the elephant in the room that no one wants to discuss.  I do own an interest in the minerals.  I tried to talk the family member into dividing it up years ago so I could do as I pleased.  Be it cut timber, live on it, or sell.   I was told a few years ago from the lawyer that handled some family business that since this family member has the majority of the land, controlling interest, if he decided to cut the timber he has to give me a chance to agree or disagree, in which if I disagree to the terms he could cut the timber but has to pay me for my portion.  So with all that being said I didn't know how he could sign a lease since it's undivided.  And what happens if I don't sign the lease and production is made.  I have received the written lease in the mail.  Not too sure if the % of royalty amount is good or not, or even negotiable.  From reading through this thread, which has helped, I'm just needing some help, guidance, opinions, something because this is my first time to do any of this.  Thank you again Skip!!

Permalink Reply by Skip Peel - Mineral Consultant on June 7, 2012 at 16:39

Minerals are different from surface ownership and timber.  You do not require anyone's permission to enter into a lease covering your undivided interest in the minerals. 

Permalink Reply by Just want mine on June 7, 2012 at 17:02

I have 30 days per JB Land Service to sign & return.  Would I be better off w/a lease or without?  Would I truly benefit if I wasn't under a lease.  Would it be less or more if any?

Permalink Reply by Just want mine on June 7, 2012 at 17:03

Thank you again, your help is very appreciated!!

Permalink Reply by GoshDarn on June 7, 2012 at 18:49

just want mine:

With minerals in La., you don't have to sign unless it's a good offer.  In other words, your relatives can sign and they can get their bonus money, etc.  If you decide not to sign, your decision doesn't affect their lease at all.

Also, a lease negotiation can go on for many months.  So, if this is a first offer, then hold out for a much better offer. 

Also, depending on the number of acres involved, you might think about using a lawyer to vet the lease and make sure certain favorable pro-landowner "addendum clauses" are added to "exhibit A."

Hey, don't rush.  Take your time.

Good luck.

 

 

Permalink Reply by Just want mine on June 8, 2012 at 4:09

GoshDarn

Thank you for responding!!  The lease JB sent that I just received yesterday had a paragraph stating sign and return by 30 days from date, so it had me a little worried about the terms.  However, it does have the addendum clause for exhibit A. Which myself, couldn't tell you what that is since is the first time I'm dealing w/anything w/it other than paying the taxes. Since another family member has the majority of the property I'm sure the T's were crossed and I's dotted but I just didn't like the sound of the 1/8 royalty.  I'll have to do a little more research.  Which this thread has shed a lot of light on things.  Thank you for everyone putting in thoughts and concerns.

I will for sure take my time.

Thank you!!

Permalink Reply by GoshDarn on June 8, 2012 at 5:49

jwm:

If it was me, I would not make any assumptions at all.

(Why?)

Because that 1/8 royalty is a huge red flag.  Very bad mojo.  Smells bad from get-go.

Ergo, I'd lay ten-to-one odds that the so-called addendum clauses in their pro-operator "Exhibit A" which they sent you are greatly flawed, too.

In other words, there are numerous clauses that a savvy landowner (or his/her attorney) can have written into any lease per a lease negotiation.

So, whomever in your family negotiated that dang-awful 1/8 royalty, I would assume, probably also dropped the ball on the needed lease clauses, which could literally add up to maybe tens of thousands of dollars per 7 acres and the life of a productive field of oil and/or gas, etc.

Yes, SEVEN ACRES is good stuff.  Nothin' to sneeze at.  So don't go thinking otherwise.

Ergo, don't sign that lame lease, even if they WANT you to believe you only have 30 days.

Hey, that's big-time b.s.  They're attempting to buffalo you into making a bad, bad decision.

You absolutely don't have to play their stupid game.  You own the land and the minerals in the ground (even if it's undivided).

In other words, they need you.  You don't need them.

So, tell whomever landman -> that you're unhappy with their peanut offer and that when the "true" operator wants to make you a fair-and-reasonable offer -- whenever in the future -- that you'll be willing to consider it and that you'll be using a good O&G attorney to proof your lease and make sure that you have a landowner-favorable "Exhibit A" -- i.e., not one which was probably written by the land company/broker, etc., to fit their needs and not yours.

So, if you want the name of a good lawyer, let me know.

Don't cave.

Hang firm.  Indeed, it isn't that hard to do, really.  Just haggle.

Take care.

GD

 

 

 

 

 

 

 

 

 

Permalink Reply by GoshDarn on June 8, 2012 at 6:06

P.S. -- jwm:

If it was me on 7 acres, I'd hire a good O&G attorney to vet the lease.  Trust me.  It'll be well-worth it in the long run.

Those who pinch pennies on such important contracts are not doing their due diligence.

These days, the fine print can really, really bite ya.

Permalink Reply by Just want mine on June 8, 2012 at 6:41

GD:

Thank you for your feedback and advice, it's greatly appreciated!!  Luckily I'm as hardheaded as they come and do not plan on caving.  After reading over the lease, there's an "additional terms and provisions" paragraph that states:  It is agreed and understood that wherever the designation "one-eighth" (1/8) appears in paragraph 3 hereof, the same shall be deleted and the designation "twenty-two and one-half percent" (22.5%) shall be substituted therefore.  Now when speaking w/the 'landman' from JB on the phone I was told 22.5% it wasn't till I got the lease in hand that I saw the 1/8%.  I must agree that I believe a O&G attorney is in the future due to the fact that this is all greek to me.  I'm just not certain about that additional terms paragraph!!

Holding my ground!!

JWM

Permalink Reply by obed w odom on June 8, 2012 at 7:26

It sounds as if you will indeed be getting 22.5% instead of 1/8 royalty. I think it's pretty common for leases to contain boilerplate  language in the main body which is then superseded by an "Exhibit A" containing "additional terms and provisions.

Permalink Reply by Skip Peel - Mineral Consultant on June 8, 2012 at 2:17

I don't know all the details of your mineral ownership nor your personal financial position.  You need to spend some time doing your homework here on the site or hire an attorney.  If you have sufficient net mineral acres owned the operator of any well will prefer to have you under lease.  You can lease at any time up to and even after completion of a well.  The first offer is never the best offer. 

• ‹ Previous
• 1
• …
• 13
• 14
• 15
• 16
• 17
• …
• 23
• Next ›
• Page