Yes, and he gets to keep 10 times as much money for himself. That doesn't seem unfair to me. If you sell a house and use a real estate agent you pay a commission of 6 or 7% on the sales price. The guy who sells his house for $500,000 pays ten times the commission to the sales agent compared to the guy who sells his house through the same agent for $50,000. That doesn't seem unfair to me even though the effort by sales agent to sell each house may have been the same. Of course if your political leanings are to the far left, then your complaint is understandable. This is a reply to Mike C.
I get the capitalism thing what I struggle with is ....preying on the herd of lambs
you get the expert who was involved with 1 deal that drug his neighbors in and took there scalps then got a kickback from the lawyers as well is that who you want to associate with
my group is better than yours we have slicker lawyers we are in negotiations with 3 o/g companys
guess what everyone that has land in our area is as well also go to your mailbox every carpetbagger is a o-g expert and a mailer
Mike C; Mike C; every parcel has value. Our area is so fragmented that these companies know in advance they will have to do some horse trading to form drilling units. Our area has lots of HBPd parcels scattered about. Furthermore, there are multiple companies signing leases just in Mercer Co. They know from the get go that they will have to trade and swap to form drilling units. Thus they are willing to accept isolated parcels surrounded by a competitor. They will swap that for acreage adjacent to the larger tracts they have to form a unit.
Mike C; in every single deal that Cx and M & P has done they have gotten more money than the fees just in the bonus than the offers by landman to individuals. No one lost value and in fact everyone gained value. And with better lease terms the value is way better. In fact, the Hilcorp offer was double what we had been offered for over six months. It was only by bringing in outside competition that they were able to force the prices up. No one landowner could have pulled that off.
Just to clarify things a bit. In Oct, Hilcorp was paying $3000/acre through the original M & P/Co-X agreement and people that were not part of the original group were charged an 8% fee. Shell had gone to $3250/acre so that this deal was no longer the best offer from a strictly bonus number comparison. So both M & P and Co-X began to aggregate land to get a better offer.
Tracy did not sign a lease in Oct but instead joined a landowner group being formed by M & P that had a three month agreement. In January, they asked for people to sign a three month extension as they had not gotten an signed offer and Tracy signed that extension.
M & P along with Co-X, working together, got Hilcorp to agree to pay $3500/acre of which $250/acre would be paid directly to M & P/Co-X and $3250/acre directly to the landowner. So the $3250 net was substantially better than $3000/acre with either a 6% or 8% fee.
And as far as I know every lease signed in January was for 120 days. Western Land, the company that does title work for Hilcorp, had run into many problems that caused delays. Western had brought in extra people, paid to have the courthouses to stay open evenings and Saturdays (Cost shared by other O & G companies like Shell that were in the same predicament) and even bought extra computers for the courthouses to use. But they still couldn't meet the 90 days so they asked and received the 120 day time period.
I have not read through Tracy's lease but I am reasonably sure it was for 120 days. Even if it was for 90 days the money will be there shortly. The problems were with the complex deed work necessary and the congestion resulting from the mad rush brought on by this tremendous opportunity that we are all blessed with. Rather than be at each others throats, we should all be a little more patient and be thankful for our unforeseen riches.
Impressive, all in one breath.
A courthouse, was open on a Saturday, in North America. funded by Oil and Gas companies???
Where and when again was this?
Guernsey County were or are running extended hours at the recorders office three nights a week till midnight and open on Saturday from like 8 til 2 I might be a bit off on the hours but it had been in the press and posted here in GOMS.
Let me clarify, what I meant was a courthouse that was open in the evenings and on the weekends at any time in PA, expenses paid for at the request of an oil and gas company, to meet any deadline, supported by land in PA going into a group lease.
I'm confused. M&P and Co-x took the standard Hilcorp lease, word for word and changed/added a few addenda. I have copies of both. Hilcorp was more than happy to have you sign direct with them. So why pay the commission? Negotiate a few addenda on your own. I'm not seeing that minimal amount of work worthy of that commission, or any commission for that matter. If they had a lease like the S.U.R.E. lease or Friendsville lease, then definitely. Those leases were about 17 pages versus 3 pages. What was really funny was that they put a lot more time in the contract you signed for them to represent you than they did for the lease they wanted you to sign. That contract was actually longer than the lease! So for 6,7,8% and $250/acre you got a couple of addenda. Can anyone explain this to me?