Unsolicited offers by mail
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.
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Replies to This Discussion
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Permalink Reply by Gale on
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Funny you use the example of cosmetologist licensing in comparison to buying and selling mineral right. I often use that example as a salon owner we have more restrictions in the salon than lots of businesses. Although our services usually have short term impact on clients we have extremely stringent rules and regulations. Example being the selling of mineral rights by mail solicitation, a person not reading and comprehending the meaning of the document could lose potential income for their self and family forever. Bars are another example, they are not even required to carry liability insurance which we in the salon are, how many people get killed from getting their hair done? How many from drunk drivers? And the list goes on and on!
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Permalink Reply by Andrew on
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Dino,
I tend to agree with you on the licensing of landmen. I think it would be the best way to protect the public from someone who woke up this morning and decided to call himself "landman." I think it would also protect competent and professionally responsible landmen, which I believe are the substantial majority of those in the profession. Nonetheless, the American Association of Professional Landmen is strongly against such regulation, and I don't think it's likely to happen in traditional producing states like Louisiana without something dramatic occurring which would lead the citizens to demand licensing.
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Permalink Reply by Ed on
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I think it is more akin to this:
You can buy and sell land. You can buy and sell cars. You an get online and buy and sell stocks. You can buy and sell minerals. Buying and leasing minerals is not a service industry. Everyone has the same information available to them.
A state approved oil and gas lease would never fly. What's good for one person is not good for another. Each and every lease has to be negotiated to satisfy each and every mineral owner.
Also, each state has it's own mineral code that is the result of many years of trial and error. Louisiana mineral owners would not want to use the Texas lease or vice versa. The state laws are very different concerning many things.
Lessors should always seek legal advice if they are not comfortable with what they are doing.
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