Maybe someone out there can help me. I am not leased and have not signed up with any lawyers but have gone to a couple meeting. One of the lawyer goups just called and said they have a contract with Halcon and want me to sign a contract. I would get 3150 an acre and 18%. However the lawyers want 150 per acre and 1.5% of the roylaties for 5 years. The 1.5% would translate to 8.33% of my royalties. But they said that need to do it by monday. I hate to rush into something but what if i wait and nothing happens. I hate to give up some of may royalties. But i would hate to end up with 18% of nothing.
What do you think?
That deal sounds crazy, go directly to Halcon and get the same deal without giving a lawyer 1.5% of your royalty or $150 an acre.
It sounds like you are dealing with car salesmen not landmen. When they put in that urgency to sign right away is when I would throw up the red flag. Did they say why it has to be signed so soon? I don't think you are dealing with lawyers but rather landmen. Have you taken the proposed lease to an experienced oil and lease attorney for review? There is more to a lease than just the bonus and % royalties. You are signing for many things besides the money, it could affect you and your land for the rest of your life. You must do your homework and make sure you have some protection written into your lease.
Do you think (Halcon) will deal directly with me. Also I called the number for adapt energy and they were not in the office but the guy I talked to said either they were part of Halcon or leasing for them. They might just be a flip company.
I am dealing with the marcellus shale law group out of pittsburgh. I went to one of their meeting but never signed with them but I left them my contact info. They said they had shop around a countract with 22 provision and none of the oil/gas companies bit. But Halcon did and accepted all their provisions and wanted all the land they could get in Venango co. (I own property in sugarcreek and oakland township.) They said Halcon wanted everything by Wensday. I told the law group I needed time to think about it. I might call them back tommorrow for more info. I then saw the add in the paper for adapt and thought I might call them and see what they had to say but the guy I talk to was not in the office so could not tell me much. He did say it depended what township I am in. Did not seem to excited about oakland.
I don't have a direct contact with Halcon or Hilcorp, but perhaps someone else here does. Not sure if Seneca Resources is looking to lease more right now. I think competition is good for the landowners.
This type of high contract should be illegal. I hope someday that it is. I would not give these guys one penny. It sounds like a bad five year marriage....I would wait until you find a legitimant offer from a reputable landman. It is ashame that there are a lot of people who don't ask questions and just sign the paper.
I signed with this group of Lawyers back in Febuary. As an out of state landowner I felt this was a good option. I have been in contact with them for 5 weeks about this deal they are offering now. If I had not signed up with them in Febuary, I would also think this deal is something to stay away from. Since I have dealt with them since Febuary, I still maintain that I made the correct decision for my situation. I agree it may not be for everyone. Our land is in Jackson township.
The decision is always up to you, but people who choose to represent themselves have been said to have fools for clients. You have provided some of the details of the contract terms, but you need to read the entire contract, even several times if necessary and take notes on what your questions should be. What does it provide for in the other terms of the contract? Why? When? How? Who? If you do not understand the details, this is what legally trained people called lawyers can do, help you understand the terms and more importantly ramifications of the terms. Ask questions and ask for specific answers to your questions. 18% of zero is still zero, so that is always a consideration.
Having an attorney review your lease is a great idea. Signing a "marketing agreement" with an attorney group from Pittsburgh is not the same. Please don't confuse the issue. If and when the development actually hits the area, landmen with legitimant leases will be knocking down your door. In the meantime if you sign now with a reputable company that actually drills wells, and you get a good lease with decent addendums now, more power to you.
I believe that Albert Einstien said, "Everything is easy, unless you understand it."
This response is intended for all of my fellow landowners in Pa. - I am considering leasing my subsurface rights. With the potential magnitude of the Marcellus Shale, and now Utica, I would NEVER negotiate with any of the energy companies without KNOWLEDGEABLE representation.
I am an Attorney, and have been practicing for more than 20 years, but subsurface/energy leasing is not my area of expertise. I know enough to know that I absolutely need help and guidance in this area. I've seen some replies in this blog that suggest going to the energy companies and negotiating your own deals, without representation. I do not believe in "do it yourself brain surgery." The law firm that represents me has negotiated nearly 40 CHANGES to the original lease proposed by the energy company (and their team of lawyers). The language in the original lease heavily favored the energy company, to my detriment. My law firm is working for ME, and not the energy company.
It may surprise some, but it is true that Lawyers get paid - just like everybody else who works. If I end up executing a lease, I will pay my law firm $150 per acre, all of which will come from my up-front bonus money.
If I do enter into a lease, and the Marcellus/Utica actually becomes what I've heard it could be, then I will be "married" to the energy company for a long time. I would never make that kind of commitment without representation.
I believe that attempting to negotiate on my own, without knowledgeable representation would be penny-wise and pound-foolish.
What law firm are you using. I don't mind paying an attorney for services but I don't want to be ripped off either.