As Skip will recall, but most of you may not know since I've not been on this site in awhile, I own lots of minerals across the Ark-La-Tex. I was an executive with E&P companies before retirement. I have been on both sides of this debate. Basically, I share the concern that overzealous legislators not inhibit the ability of people to offer to purchase mineral estates or royalty interests by mail or otherwise. Having said that, I share Skip's concern about how some do that. Bank drafts designed to look like checks, and descriptions that include "all that the Grantee owns in a county" are reprehensible, especially when the cover letter gives the appearance that the purchase only involves specific interests in a well, lease, or unit. A larger concern is that those soliciting often have information which the owner is not aware of - most commonly, permits to drill on or adjacent to the targeted interests. I suppose that is commerce at work, but I have always disclosed what I know when buying minerals. At first that seemed to cost me some deals, but I also bought some properties because people appreciated my honesty - so it worked out for the best, and I could sleep at night.
Just some observations on both sides. BTW: In the past, I have sent complaints (without response) to the AG in Texas about practices that I consider predatory (most particularly buying everything one owns without properly disclosing that, and enclosing phony drafts with caveats so that the recipient's expectations are unfairly inflated). I once received a draft for over $300K for some valuable minerals but not that valuable. I phoned , identified myself as an attorney/mineral owner, and the company said it must have been a typo! I agree with Skip - it is good that Legislators are becoming aware of these practices. I just hope they don't impose restrictions that keep honest people from doing things the right way.
I agree with you. I'm not sure what direction this is going with this legislator. I would have asked more questions before I started soliciting letters. But that's the old TV Reporter guy in me. I like to know where things are going and why.
This could go "good" if its investigatory and "bad" if its to limit the ability to make offers by unsolicited mail. As I see it if limits are put on solicitation then to get an offer for a lease or a sale you would have to hire someone to act as your agent. I guess I can see paying someone 6% of the bonus and a percent of the royalty because a landman can't make a direct unsolicited offer. This could really screw things up.
What? Why would you not want to be clean in what you are buying. Are you saying, Joe Aldridge, that someone can buy minerals without properly describing the property they are buying minerals on?
I think it is a mistake to suppose that the interest in researching this issue is related to the fact that the offers are unsolicited. I think the interest is much more likely to be related to the other salient facts. Inaccurate/incomplete legal descriptions, verbiage that references sale of interests beyond that described in the legal description, granting of power of attorney, tying up the mineral interest by way of a draft, etc.
Not saying that at all. All transactions should have a complete description of the property and the actual type of transaction that it concerns. Again, my concern is a legislator getting involved and writing legislation that would keep me from getting offers by mail, etc. In this day and time we seem to lose a little more freedom each day because of legislation that is meant to protect us.
In your original post dealing with Cobra you are the one that states that this inquiry deals with unsolicited letters.
The term, "unsolicited" is only part of the description provided to me. In that same original post I mention other areas of concern. You chose to fixate on the term, "unsolicited. I'm pointing out that when reviewing unsolicited offers particularly in the case of Cobra, the terms and manner of presentation are what I view as troubling.
This is truly a matter of Buyer Beware. Or, more correctly, Seller or Lessor Beware. Unsolicited offers for mineral rights amounts to trolling for the uninformed. No amount of legislation protecting landowners from abuse is going to stand up in court when challenged, as it will be immediately. The only practical recourse for most folks without benefit of counsel is to know what you've got and make the best deal you can with the right parties.
I have purchased several thousand net mineral acres since the late 1980s - the majority of my offers were unsolicited. I have no problem with that whatsoever. It is deceptive practices and withholding material information that is bothersome. Frankly, cheap shot, a mineral owner probably can't protect himself from a buyer who willfully omits to disclose important information by hiring a lawyer. Most garden variety attorneys, even many O&G types, have more experience with documentation than they do knowledge of how minerals and royalty should be valued.
If an individual were to sue a buyer alledging that he took advantage of superior knowledge, the buyer would simply assert that he acted on public information that was equally available to the seller. I am not aware of any laws currently that require a buyer to disclose all that he may know about the upside value of a property. Until that changes, if it ever does, the professional buyers who do their homework (and I am one - albeit, I prefer the honest approach) will always be able to pay less that a sophisticated seller might demand.
For the most part, States cannot regulate what folks put in an envelope and mail; that is the job of the federal government;
some of the offers we get for Texas minerals have some sort of big, bold legal language about Sale of Interest, required by the state law i suppose;
if you want to protect mineral owners, then all leases should be drawn using the same form that the State uses and all royalty paid should be 25%; now that would be some nice legislation to craft;
these companies look like any other business with a website:
and the list goes on and on...Google: sell my minerals or royalty; there are tons of them all over the country;
we get offers all of the time, post cards, deeds, letters, drafts, calls and flyers in our checks by the operators;
education is way better than regulation, regardless of the situation or business;
just sayin....and thanks for your time;
Dino, your welcome. And although I agree with your post it violates site Rule 2 regarding the posting of website addresses. Welcome to GHS.
2) There is zero tolerance for unauthorized solicitations and spamming in forums or through the system. Solicitations include veiled commercial posts. Spam, flooding, advertisements, chain letters, pyramid schemes, and solicitations are also forbidden. The posting of a website, email, phone number or address will be considered a solicitation. Permitted sites include news (not blogs), non-profits & government agencies. Also, utilization of one's profile photo or name to promote a biz is prohibited.
sorry ladies and gents ! no harm intended and i need to read the rules better;
thanks for the heads up !!
No offense taken. I don't think the site rules are a part of the process for becoming a member
Welcome Dino! this is a helpful site with many knowledgeable people who love to look at the details - even of websites. best of luck