Replies to This Discussion

Oil & Gas ProPermalink Reply by HBP on August 24, 2008 at 3:34

Jim, Would you say that you have never used a draft to buy a lease or royalty?

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Oil & Gas ProPermalink Reply by HBP on August 24, 2008 at 5:07

Sure, I'm with you. There is nothing stopping a landman from running title, executing, paying, recording in 5 days. If thats the only lease they are taking and they have nothing else to do.

But , the money in this play makes the title requirements greater. The landmen are basically running abstracts to get the money approved from their client. You have to admit, that changes the game some.

Then you have competition. While you're running title, the competition may convince a landowner to take the draft or they may have fewer title requirements for payment and get a check quicker. Then the landmen spent 3 days on a title chain back to patent before he finds out there is nothing to lease there. And very few landowners would keep handshake agreements with money this high. Get burned like that a few times, and it will make you more cautious about running full title on a tract you don't have executed.

I see it from the landowners point of view, but there is alot more risk in this business than the l/o acknowledge sometimes.

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Permalink Reply by Tricia Baker on August 26, 2008 at 11:04

This certainly has been an informative thread. Thank you all for being so candid.

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Permalink Reply by JT on August 28, 2008 at 13:51

I was paid with a 15 day draft by Petrohawk . Everything went well and I was actually paid early.

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Permalink Reply by milton A1 on August 28, 2008 at 14:07

Petrohawk paid my family on time with a draft.

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landownerPermalink Reply by smith1 on August 28, 2008 at 14:52

nope, 15 days, petrohawk, paid draft, extremely efficient and well handled

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landownerPermalink Reply by smith1 on August 28, 2008 at 14:53

I even spoke to my bank, larger ones here in region and they assured me that they had no problems whatsoever with Petrohawk's drafts/payments at all.

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landownerPermalink Reply by nyghtbreeze58 on August 28, 2008 at 16:15

My family leased land to Chesapeake in summer of 2007 and we were paid by draft then. We negotiated another deal with Chesapeake this year in May on some other acreage. We signed and received the bank draft the same day. It was a 15 day draft but we were paid a little early. Both times no problem.

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landownerPermalink Reply by Russell Thurmon on March 18, 2011 at 6:21

I've been in the mortgage business for 15 years - I can't remember a title run that took more 3-4 days

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Oil & Gas ProPermalink Reply by Skip Peel - Mineral Consultant on March 18, 2011 at 6:52

Ever run any mineral title in those 15 years, Russell?

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landownerPermalink Reply by Russell Thurmon on March 18, 2011 at 7:00

Yes - if the land owner still owed the rights

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Oil & Gas ProPermalink Reply by Skip Peel - Mineral Consultant on March 18, 2011 at 7:26

That's part of the equation.  Do they indeed own the mineral rights?  When there is no clear answer based on public record, the research can become quite complicated and time consuming.  Prescription as defined in the Mineral Codes requires a search of a minimum of 52 years ownership under the most simple of circumstances and often much longer.  Sometimes back to patent.   Interpreting when servitudes were created and when they may have expired can be difficult.  And mineral production and operations must be documented in addition to title conveyance.  It can, and often does, take longer than 3 - 4 days.

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