Replies to This Discussion

Permalink Reply by ledlights on December 20, 2013 at 0:34

Dino,

I did not imagine that your posting of those website addresses was intended as a solicitation. I have posted some web addresses that did not comply with the rule Skip states above, after asking Keith if was appropriate. So I believe it is accurate to state that exceptions are allowed to the site rules with permission from the site operator. The bigger concern I have about posting web addresses of possibly questionable enterprises are the sometimes accompanying risks ranging from obvious and obnoxious hard to kill pop-ups up to invisible but more insidious (and unsolicited) viruses. If any of these addresses are from companies at the bottom end of business conscience I would put little past them.

The only value I have ever gotten from mail offers we have received is a very small hope that they may occasionally be from someone who actually has done their homework and they do indeed know of some activity or plans that could make our minerals more valuable than I am otherwise aware. Usually the amounts offered upfront provide no such uplift for me.

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Permalink Reply by Gale on December 14, 2013 at 20:22

I've received tons of these offers over the years and the only attention they get is going straight to the shredder.

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Permalink Reply by Hopeful About Natural Gas on December 14, 2013 at 21:20

You are wise and I always enjoy reading your posts. I have kept a couple of old "offers" from years ago - like an offer of $2K to buy over 400 acres (total, not 2k per acre)

But, I have kept the only to show my kids what they look like and why to avoid them. O&G is complex and you either need a good lawyer, good friends or a GHS - hopefully you can have all three!

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Permalink Reply by Dino Roberts on December 18, 2013 at 19:09

seems like i got one many years ago and tossed it; still digging around here but no luck yet;

my operator puts them in my check envelope now and again;

has the Cobra petroleum sent an offer lately ?

 

 

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Permalink Reply by Ed on December 19, 2013 at 11:32

Watch out for this one!!

I was at pack and mail to get something notarized and the very old man in front of me was having some trouble understanding his lease. He was signing an OGM lease to send in. I told him I would gladly look at his lease and help him with any questions, that I was in the business and wanted to build goodwill.

Well... He had a decent lease, but the back page was a conveyance of all of his mineral rights. It looked just like an exhibit "A" that is standard on many leases. He had no clue he was about to convey his mineral rights!!

I explained what he had and told him to go to his attorney in Shreveport for advice.

I cannot stand to see people taken advantage of. A fair deal is one that is fair to everyone.

Ed

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Permalink Reply by Two Dogs, Pirate on December 19, 2013 at 11:50

Who was the buyer?

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Permalink Reply by Ed on December 20, 2013 at 17:58

I don't know. It was some company leasing and it was several years ago. Probably just someone hoping to flip the lease.

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Permalink Reply by Hopeful About Natural Gas on December 19, 2013 at 20:12

This is a question for the legal beagles here ... is is possible/desirable to create an ongoing post about this problem. These guys really make it look bad for everyone in oil and gas.

Would it be possible/desirable to make a list of "offers" we happen to get in the mail and post a scan of the offer with the problem paragraphs highlighted?

I bet this is bigger than most of us realize simply because many people will be too embarrassed to admit they signed away their rights.

I would not want to restrict royalty buyers from using the mail but many of these guys are con-artists dabbling in o&g not established businesses.

HANG

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Permalink Reply by John Brewster on December 20, 2013 at 5:39

Hang:  Good idea in concept, but perhaps not a "fix all."  First, I don't know how this website works in terms of having an "ongoing post".  Skip might have a view on that.  The second challenge is what Dino Roberts alludes to below - the variations and complexities, both in terms of the many ways in which documents can be deceptive, and in state law on this subject.  Ultimately, there is only so much we can do to warn folks about what to look for; their best protection would be to have a lawyer (and I is a retired one - not soliciting business) look at everything.  However, as I have noted in an earlier comment, not all lawyers deal with O&G conveyances every day and most are not qualified to (nor should they ethically) offer "business advice" about what is a good or decent offer.  So, we could put together a list of the warning signs of a scam - things like language that conveys all of the seller's minerals in a section, unit or county when that is not what the mineral owner intends, overbroad warranties of title, etc.  Even if we post sample language, a clever draftsperson can find other ways to achieve his nefarious objective.  I would also like to think we could offer some guidelines on fair pricing, but that too is an elusive goal.  Good producing royalty or mineral estates which have been permitted for drilling can command a range of pricing depending on location, risk of the drilling, potential, etc.  Having every good intention, it is difficult to think that we can effectively offer advice that would be universally helpful.  Believe me, as someone who has purchased several thousand nma, mostly unsolicited (although seldom by letter offer), I hate what a majority of these people are trying to do to unsuspecting owners.  I would love it if sellers had better access to legitimate buyers - the kind who have enough integrity to find out what is going on, share that information with an owner (to explain why offers are streaming in), and then propose what kind of terms should be expected in a fair transaction (with no surprises).

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Permalink Reply by Skip Peel - Mineral Consultant on December 20, 2013 at 5:52

John, and other interested members, there is no set option for the kind of permanent or "ongoing post" under discussion.  There is a "blog" option but that format would not serve the purpose envisioned IMO.  The best course would seem to be a request to Keith to post a link to a comprehensive overview of selling minerals/royalty with a permanent Main Page link.  Below the Main Page banner is a link titled, "More".  Under that link is the oft quoted and linked white paper by KB concerning Unleased Mineral Interests, titled "UMI Basics".  As the site is currently formatted I think that would be the place for the white paper.  Anyone interested can contact Keith.  Someone will need to write the white paper or maybe someone can start it and others can contribute like a wiki.

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Permalink Reply by John Brewster on December 20, 2013 at 6:30

I wonder if there might be some good law review articles out there which would be the basis for developing a "white paper" (after conversion into laymen's language).  Perhaps I will do some searching after Christmas.

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Permalink Reply by Dino Roberts on December 20, 2013 at 5:17

sometimes, i think the entire mineral buying and leasing should require a license of some sort;

do you know that it takes more classes and State certificates to cut hair, than to buy leases or minerals ?

posting any and all wormy documents for suggested conversation and improvements to the whole scope of this would be a good thing;

tricky offer letters, low lease and royalty offers, 2 year kickers buried in a 3 year lease etc...etc...i think this stuff has been going on for 100 years (that is why so many acres are HBP with a 1/8 royalty), its just now coming to light with the use of great websites like this and the fact that computers allow 5,000 letters to be mailed at once, versus one-at-a-time back in the days of the type writer or even worse, the face to face meetings and scamming folks in their own living rooms back in the day;

maybe we need a State approved, Statutory oil an gas lease form, similar to what the State uses or what Exxon would use ?

and some sort of big bold language about selling, like the State of Texas has on their mineral offer regulations ? how does a Deed "look like a lease", when is stays Deed at the top, for example ? or how does a Draft "look like a check" ? just cause it might be green ? hahaha

then comes the other issue, that Leasing is actually a Term conveyance of your minerals, with the possibility of reverter and potential royalty if the term conveyance does not expire; (in many states); that is why "leases" have grant, sell and convey language in the first paragraph;

geez who knows, this gets overwhelming sometimes and at some point education is the key VS trying to regulate each and every step of life;

cheers and hope this helps and have a very Merry Christmas !

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