sorry to hear of your problems
sadly you will not be the last one we will hear this from on these type of groups
I hope you can find a good lawyer to get you released from this
too late to double down
Wouldn't be surprised if the lawyers had the checks issued to them so they could deduct their share first. After they get all the cash then after a few rounds of golf they might disburse it to the landowners.
When Tracy first posted this I thought it odd she would have signed an "extension" after only 60 days when the lease states they have 90 days. I asked her for clarification and she told me that she signed a lease in Oct and then in Dec was told to sign another lease as the offer had gone up. This means that even though she had already signed a lease, she was given the opportunity to sign a better lease two months later, making several hundred dollars per acre more. How many times has that happened with a landman?
When it is time for the checks to go out, they go directly to the landowner with the fees already deducted. That is so that the Lessee doesn't have to worry about paying taxes on the full amount or have to show deductions and then justify them to the IRS.
Sorry Jim, but Oct. 19th to Jan. 19th IS 90 days, and we were told in advance that we would get the best deal possible. I only made $250 more per acre, not SEVERAL hundred. M&P and co-exprise increased their fee also during the extension from 6% to $250 per acre which comes out to be more than 7%. Also, I would have liked to have signed something stating that if we didn't get paid by April 15th, which was supposedly guaranteed, the fee would be reduced by a percentage. By the way, the lawyers were suppose to get back to me today and let me know what is going on, and I haven't heard from them yet. Probably won't either.
You said you signed the extension in Dec, well short of 90 days. And to "only make $250 more per acre" a couple of months after you signed the first lease is unheard of in this industry. No land man has ever gone back to a landowner and said, "Hey, even though you signed a lease a couple of months ago, I can get you $250/acre more now." At least not that I know of.
I don't know how many acres you have but I would think most people would be happy to get $250 more by waiting a little longer.
And all the title work is being done by Western Land Services and is out of the control of both M & P and Co-Exprise. The delays are because of poor record access at the courthouses and the large number of titles being researched. There are several gas companies with thousands of leases to do.
Sorry it is taken a little longer than expected.
Bill; they would do that when an existing lease is expiring but they would never do that two months after a lease is signed.
Here's another thing that doesn't add up. Tracy said she only made $250/acre more. But when leases were being signed in Oct when she originally signed, the fee was 8% of the bonus which was $3000/acre. (at that time the 1% of the royalty was optional, I think) That works out to a fee of $240 and $2760 to the landowner. But in the later deal which she signed, the bonus was $3250 to the landowner and $250 to Co-X with no royalty fee. So that means by given a second lease two months after signing the first lease, she made a difference of $490 /acre and Co-X only charged $10 more!
To get $490/acre more two months after signing the original lease is pretty amazing and shows just how good Co-X truly is.
Oh my gosh Jim. Stop trying to make yourself and Co-X out to be some great deal! I signed up with M&P lawyers originally in Oct. They were charging a flat rate fee of 6% of bonus with NO royalty fee. At that time, CO-X were the ones charging 8% bonus fee and a % of the royalty fee. Then, when the two companies joined together for the extension in Jan. ( 90 DAYS--you need to go back and read my email to you---it didn't say Dec., it said January.), the fee turned from 6% to a flat rate of $250. NOT so AMAZING!!
Whether $250/acre is a a good deal depends on what ultimately the lessor pays you as a signing bonus. If M&P finds you a lease that pays you $3000/acre, then M&Ps commission is8.33%. If signing bonuses begin to plummet as I am afraid they might, then M&Ps percentage drag on your bonus money goes up dramatically. I don't like the flat fee/acre by M&P because they make the same amount of money whether they get you into a good lease or a bad lease. In fact, with a flat $250/acre fee they might as well recommend any lease at all to you so that they can get their money now. For that reason, I am becoming somewhat skeptical about their ethics. Are they looking out for you or just for M&P. I think you should raise these questions with them directly. I would be interested to hear their answers.
The lease is actually one of the best ones around. My problem is if I am paying someone $250 per acre to secure a good lease for me, and it says that I am to be paid before April 15th, then I should be paid by that date. Since they are well aware that the people haven't been paid, they should have been looking into it much sooner. Hilcorp got the payment request on April 17th, and I had to find that out for myself. So I'm still waiting!
It sounds to me like you are going to get your money very shortly. Do you mind revealing how many acres you have? If you got $3250/ acre you should be overjoyed. I think my general point that a percentage commission is usually a smarter arrangement than a flat fee is valid for the reasons previously stated. I would be overjoyed to get $3250/acre and pay $250/acre to M&P. Congratulations but have a little patience.