Organizing to negotiate
Organizing your group to negotiate in large numbers was first mentioned to me by - a landman. It seems to me that organizing in large numbers is only benefiting the oil companies. The landman is saved from going door-to-door and the group is brought to him for easy pickings. And then, you get the take it or leave it offer (with a slide percentage, of course.) If you don't take it, the offer is reduced. Now, we know that is not true. If you don't bite, the offer goes up. So we regroup again, and we get another take it or leave it and another slide percentage. I realize there has to be a limit, but it seems the offers with a group organization are no better than if we bargained individually, maybe even worse. I am thinking that we fell right into the lap of the landmen and saved them a lot of time and legwork. Am I wrong?
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Replies to This Discussion
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Permalink Reply by Snake Stewart on
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Hello dianeh , You do what others are doing. Waited 1 month and the offers started again. If you are on the shale , you are on the shale. They have to keep the advantage as best they can. Threats to leave are childish games we used to play as children but it works for the O&G's. " I am going to take my ball and go home" Remember those days ? I used to get spanked if my Mom heard me say that. The O&G's should as well .
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Permalink Reply by Grice on -
I checked your location, and there is a production well in your section. It has been in production since 2002. The operator for the well is Moransco Energy Corporation. Since they already have an interest in your section, they would be the most likely candidate to contract with. Their number is (318) 221-5001.
With the well already in production, even as an unleased landowner, you should have been getting monthly statements from the operator. Are you 100% sure you own the mineral rights to your property?
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Permalink Reply by SharonB T18N R15W S8 on
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Who's section did you check?
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Permalink Reply by Grice on
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Sorry about that. The way this forum organizes response post, sometimes makes things look out of order. I was responding to an earlier post made by dianeh.
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Permalink Reply by dianeh on
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My family has owned the land for 100 years. I purchased it in 1971, i should own the mineal rights. how do i check it?
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Permalink Reply by Kassi on
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Give it time. One problem with all of this is everyone is in such a hurry to lease they reduce their own bargaining power. Keep the group together, discuss what your bottom line is and what are the most important things to you beyond the money in a lease. Then stick to your guns as a group. This is a huge play. If you are patient you will get a good deal.
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Would you still join a group of landowners from a broad sweep of sections if your section is already 90% leased and you are a holdout? Don't you have a different bargaining position than a group has at that point?
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Each situation is different FOG. And you do make several valid points. You are the one at the end of the day that has to live with what you do. Thats why it is so important to be as informed as you can possibly be. This may sound harsh but I certainly don't mean it too. The decissions that we make today will affect generations to come! There isn't any way around it. If there i someone that will receive the fruit of your labors after you are gone then you should also include them in your reasoning for the decissions you make. If not , live life to its fullest.
Just for the record , groups signed for $8,000 to $10,000 an acre on average more then individuals did on the Barnett. Good luck and best wishes FOG !
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Permalink Reply by Kat S8/T18/R15 on
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Boy, did I stir up some opinions with the topic of groups!!! I've been AWOL for a couple of days and came back to all this response. I went to our group meeting in North Highlands Thursday night. Prior to the meeting, I had been led to believe our group was going to settle for the 12,500/25% offer, and my faith was restored in the group. They basically told CHK - not good enough. I saw so many elderly people that didn't have a clue what was going on with their land and were desperate for help. This made me realize that some people, even though they want to be informed are having a hard time and do need the groups.
I have also seen recently someone in our section get no more for their 37 acres than I have been offered for 2 acres. This person also believed what the landman told him about anyone being left unleased would only get 2% royalties. If that were true, then why would they bother to lease anyone. I didn't realize how gullible some people are and that brings the groups into a much better light. Maybe I just was venting and now have readjusted my thinking. Thanks!!!
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The sad fact is this is much more complex than most people realize. Even with all the education out there people are still unsure of what to do and vulnerable. There is a lot of talk about the money but people need to be looking well beyond the dollar signs to the more lasting impact of the lease they sign. Unfortunately many people have taken the attitude that the O&G Company will do things right and the law protects me or worse yet, Bob down the street signed so it must be ok. Neither of which is a wise way to handle the business of mineral leasing.
I am glad groups are forming. I pray they are looking at the entire picture and putting community before money.
People need to be negotiating for quality of life and environmental and land owner protections. The money is nice but will spend fast. Signing something that does not protect your long term interests and your land cant impact the rest of your life and many generations to come.
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Permalink Reply by jkw3 on
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Having sat across the table from many landowners/mineral owners, believe me when I say that the companies want to control as much acreage as possible with as little capital risk as possible. There is nothing inherently evil about this... it's just the way all business is conducted. The bottom line is that if you have to deal with individual lot owners, there isn't a lot of difference in the time dedicated to leasing a town lot than an owner of 300 acres of minerals. Though most companies may not want to admit it, organizing in groups, especially in urban areas, can benefit both the mineral owner and the oil and gas operator. An old maxim of law is "good contracts make good partners." Put the time in to understand what you are doing, but remember that the contract (lease) should benefit both parties.
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