Unethical Gas Broker
Has anyone encountered this situation? I have a 1/7th interest in the mineral rights to land just across the Caddo Parish state line in Marion County, TX. I own this interest along with all of my siblings.
We have a gas broker that has approached us all and appears to be concentrating his initial efforts on the weakest links in my family...those of advanced age with little knowledge of what is happening. He is representing one of the Major Gas Producers mentioned in and on this website.
The terms he is pushing, in my opinion, are very one-sided and I believe he is doing his best to take advantage of my family. He is pushing a 1/5th royalty and payment on a 3 year lease of only $150/acre. On top of that, the lease terms state that it will cover all depths and formations for all minerals.
He has garnered the signatures of three interest owners and I have stopped the wheels right there once I learned that he was actually driving to my family members homes with a notary and getting them to sign this lease in exchange for the small check on the lease. The family members that have signed have NO knowledge of the H-Shale and are in their advancing years.
If all of the interest owners do not partipate in signing this lease, what value is this to the Gas Producer?
Any advice woud be appreciated!
We have a gas broker that has approached us all and appears to be concentrating his initial efforts on the weakest links in my family...those of advanced age with little knowledge of what is happening. He is representing one of the Major Gas Producers mentioned in and on this website.
The terms he is pushing, in my opinion, are very one-sided and I believe he is doing his best to take advantage of my family. He is pushing a 1/5th royalty and payment on a 3 year lease of only $150/acre. On top of that, the lease terms state that it will cover all depths and formations for all minerals.
He has garnered the signatures of three interest owners and I have stopped the wheels right there once I learned that he was actually driving to my family members homes with a notary and getting them to sign this lease in exchange for the small check on the lease. The family members that have signed have NO knowledge of the H-Shale and are in their advancing years.
If all of the interest owners do not partipate in signing this lease, what value is this to the Gas Producer?
Any advice woud be appreciated!
Views: 100
Replies to This Discussion
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Permalink Reply by DrWAVeSport Cd1 on
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I suggest that you consult an attorney asap. You will be saving you and your family many headaches. You and your family deserve THE BEST and MOST ADVANTAGEOUS leasing contract that you can find! And...this is not one of them! I repeat...This is not one of them. Whoever this representative is...is not showing to you and your family any business or professional dignity, in my opinion.
DrWAVeSport 6/15/08 a.m.
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Permalink Reply by Kassi on
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Wow, the sharks are in the water everywhere. I am not sure about Tx law but in LA he would have to get all of you to sign, or at least most of you. Basically if you and your family members lease to a legitimate company at some point this guy would have 3/7 interest and he could lease at a higher rate, pay your 3 family members based on their lease and pocket the rest if there is no way to get them out of the lease. Have you contacted an attorney to see if there is any way to get the ones who have signed out of it? It is a good thing you found out about it before more signed.
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Permalink Reply by Tedford Williamson on
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I have spoken to a couple of attorneys this morning and I suppose that signed are screwed. At this point, I am unsure as to what to expect. The remaining four, I can assure you, will not give in on the same terms of the lease. If anyone has experience in this area, I look forward to your reponses.
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Permalink Reply by John on
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In TX, as long as the subject property is not a drill site tract, and you have at least one of the executive rite owners sign a lease, you can pool the lease and drain the tract. Better sign.
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Permalink Reply by Tedford Williamson on
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Unsure of what a 'direct drill' site is. Of the seven interest owners, we are all siblings and inherited the mineral interest from our father, who bought it from the landowner in the 1930's.
I gather from your post, the only hope I have at this point is in trying to demonstrate to a court that the older siblings that signed were incompetent to do so, due to their health and ability to reason?
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You may have a shot at getting the court to decide if they were competent or not, but you are going to have to weigh you options here.........How much acreage are we talking about? 10 acres or 100 acres? A 20% royalty is not a bad royalty. Is it going to be worth paying an attorney and court costs to get 5% more on the royalty and not even owning 100% of the tract? I would just do my best and work out the best deal that I could with the landman on the remaining unleased interest, and learn from this experience for future leasing.
Just my $.02
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Permalink Reply by Lake_Ninock on
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I don't think the company is at fault here, just the individual landman.
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Make no mistake the companies know what the Landmen do. That is why they hire them as independent contractors or as subsidiary companies, to decrease their liability for the practices they use to get people to sign lowball leases.
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Kassi....Is that realy why oil companies broker out landmen? I have always wondered why. How do you know so much about these companies / landmen? I thought I wanted to be a landman, but with such negative attitudes towards them, I don't think I would like to be one any more.
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