In the beginning of this great Utica play on GMS archives, landowners can read in real time the evolution of the play up to the minute today, this is phenomenal and most likely unprecedented. The lack of knowledge and experience in a play most likely damaged landowners and yet created immediate wealth for many.
This writer who ran a sleepy land mangement company in Ohio, constantly provided insight, knowledge and understanding on GMS in order for all landowners to grasp the industry that required for their survival the minerals owned by each and every landowner in ther Utica shale.
In the beginning, another phenomenon which sprang up immediately was the massive landgroups and this vehicle for many seemed to be the organization to protect, organize and lead the landowners. Rather than revisit the enromous amount of information relative to landgroups, I leave it to the reader to gain this knowledge on GMS.
What needs to be said and what has been needed from the beginning is Land Management and following is why many landowners have made serious mistakes which many times unfortunately are permanent:
1. Land management is a team of qualified professionals with experience individuals working strictly in behalf of the landowner.
2. Landowners require assistance from the beginning of a play and for the life of the industry in a play.
3. Pooling resources (legal,engineering, monitoring, accounting, research) is economical and affordable allowing a landowner to continue their normal lives.
4. Basically a land management group is identical to property management in real estate however specialized. Sadly, land management is rare in this play.
This is an opener and is meant to further the debate and education of us landowners as we continue down this journey. And, I strongly believe this is needed more than ever today.
Forgive me everyone, but I am beginning to become very disturbed here if it is revealed that Janet and Jim have no experience in anything relative to this play we have been living through for close to two years now. I have met Jim and he is a nice person, but I will not excuse anyone without experience leading a fellow landowner into negotiations that will affect his or her property for most likely the rest of their lives.
Landowners here with minerals are at a once in a lifetime crossroads and being led by inexperienced self proclaimed "experts," is very disturbing and most likely illegal. Many here can read my post in the beginning of GMS and I was very concerned for all of us here. Yes I am in the land management business but no one, no one here can say that I force management on anyone nor am I unqualified. I have invested, developed and managed property since 1983 in four states and it is really upsetting me that fellow landowners have been taken advantage of. So from now on I will call it as I see it.
Again, all I want to know speaking for us landowners here, is what are the qualifications of any leaders of landgroups ?
Ron: They seem like honest folks, but you made a good point. This Marcellus rush is like gold rushes of the past. Grab a pan and head to the crick.
I had a meeting several years ago with a landman working for a contractor gathering leases for a large operator. He was a nice kid. During our meeting he said, innocently, that being a landman was the best job he ever had. By golly, only six months earlier he was framing houses!
An oil and gas lease is one of the most complex transactional documents in existence. Add to it addendum language, order of payment language, right of way language and you have a whopper of a transaction. Every word in every document has a specific meaning. Now, I ask you, how on earth can such a monster be explained to the folks by people who do not understand it themselves?
MEOW! As if you know the whole story.
Fang is an apt name lately. Shame. So as you go on questioning in a negative manner all who make statements on here, please tell me who or what you are helping? The great and all-knowing Powerful OZ turned out to be less than he would have others believe.
Shape up, Be useful to readers or be ignored by readers.
Glad you believe that I have pure motives, because I DO! My learning process related to O&G has never stopped. Through the information I've gathered over the years and up to the present, in many fields related to drilling, as well as drilling itself, I can thank "boots-to-the-ground" individuals, universities, company owners, and top-ranking officials in strictly O&G law firms for this portion of my education. That is what I've shared with 4-County members, and the public in general.
In my mind an expert is one who claims to know it all, and in the O&G field I don't believe it's possible. It's as static as jello on a wall! One may perhaps be an expert on what has already transpired, but not on what is to come.
Putting post -ers on the defensive leads readers away from real issues ... similar to politicians slinging mud. What is it readers are not supposed to be focused on? This is a rhetorical question.
We do not all share the same ideas and that can be written in stone, so let's move on?
Did anyone take note of the O&G article in the WSJ recently. Those living in PA and WVA are @ the top of the heap, and it's still growing!
Sorry for the delay in answering your questions; God bless this play, it is giving us all alot of work lately. First of all it is a relief to read what you write since you are truly a veteran of the old oil and gas industry locally. Some here on GMS really do not fathom how rewarded we are to have you and other professionals giving good advise here.
As far as large acreage being the first to be leased, farms really were managed correctly by the owner farmer, so to lease he only needed a good lawyer. Where we found ourselves in the beginning of the play was managing smaller suburban and urban properties. Since we have been into property for many years, the pace was never like it is now with the energy companies as new tenants. We also found ourselves wondering how we fit into this new demand, but after the awe, we fell right back into looking out for the best interest of our landowners and ourselves. Yes, we probably were the first to successfully negotiate with majority of the energy companies at our doorsteps, Shell (PA), Hilcorp,CHK, and BP.
When CHK first opened up Mahoning county for leasing, our in house real estate lawyer immediately contacted an oil certified lawyer from Texas for consultation. In addition, as the engineer in the group I retained an engineer from Texas locally who was in Russia five years ago doing well logging on the largest horizontal rig operated by Exxon, he taught us about well logging. What we first concluded was that landowners would need property management for the duration of the well and that ROW, royalty accounting, surveys and every normal thing relative to property was still going to be needed albeit more intense.
One important thing we realized from the beginning is that property managemnt is really landowner driven, there is not a fast sale approach, "sign this lease or you will be left out" approach. Property managemnt is still the same as far as demand, if you want and need your property to be managed, call us up, it is a genuine relationship. The landowner wants someone experienced and established to look after their property period. For instance today, having lunch with an associate in downtown Youngstown, a very wealthy businessman came in an waived at me, so I walked over shook his hand and chatted a bit about the upcoming outdoor movies and we started talking about energy. He surprised me that he owns 500 acres here and another 200 acres there and that he hasn't leased yet. Most likely because he is pretty much isolated from solicitation by his staff and he does not need the money. He asked me to give him an email shout and we would sit down and talk about management. Now this one is a large landowner but it is the same as most of our landowners, community, big or small.
Finally one of our key new additions to our team, because we had no experience in oil and gas realtive to land, is an "older" exlandman. I know, I know, not all landmen are evil. What impressed us about this landman the most, was we met him as one of the landman of a major energy company trying to lease our lands. He was man enough even though he severed his employment , to forward us to the company he left. He was at odds because of.......morals, he felt many of the approaches required by the large energy companies were just not feeling right with him. In any event, he is a great God send to our small management team.
anyhoot, enough about us, once again this is not a plea for clients. More likely, this is a response to the outrage of unprofessionals tarnishing the service of land management and a counter to landowners being taken advantage of by a new industry we are unfamiliar with.
I predict more lawsuits will be filed against self proclaimed "experts" who led landowners into negotiations with multi billion dollar companies denying the property owner professional representation. Thus resulting in the inability of the mineral owner to secure the fairest value and terms.
It was very enlightening for me to read the posts back and forth. All of the comments, from both sides, support my long held views that landowners groups do not work. Why not? Because there is an inherent, built in bent towards a conflict of interest. While landowners' groups are touted as "unions" by some attorneys' groups, they are not because of a union's concept of "one for all and all for one." By its very nature, that cannot happen in a landowners' group because no operator will ever be obligated to take every lease of every member in a group. And when attorneys purport to represent all of the group members, what becomes of the landowners left out? What about the attorney's ethical obligation to that landowner?
Story time. There was a Texas-style landowner group in Butler County. The leaders of this group, with the aid of a certain attorney, split from the group, signed their own lease and left the rest hanging. To this day, they remain unleased. The simple, honest act that could have been accomplished to avoid this conflict of interest would have been to tell the landowners that it would be up to the operator to choose which leases it wanted and that a possibility existed that they would not all be leased. This was never done because the leaders wanted to keep this group together for some reason, most likely for their own potential pecuniary interests.
The only purpose I see for gathering groups of folks and pooling acreage is to assure that the folks are ALL treated fairly and equally. I submit that this can be done without making promises and guarantees to them that cannot be enforced.
My two cents.
I beleive past landgroups will be investigated on how they represented landowners.
FFF, Do you have any HBP lease samples available that you could send me? Thanks, Harry