Washington County, OH

Comment

Landowner Comment by Dee A on Wednesday

As to 14 million, that figure means nothing until it's in context. If they did all the leg work, got the owners a high figure and great land protections, dealt with all the stress and paperwork and negotiating, etc., and then got 14 million for securing the landowners maybe 350 million, that is just fabulous!

Landowner Comment by Dee A on Wednesday

Utica...ah....so you are one of those folks that are trying to keep landowners from joining groups or hiring attorneys?

Steve, I was thinking the same thing about your post, only backwards. LOL

Comment by Utica Shale on Wednesday

It's goofy until you realize that group that has 70,000 acres just paid the negotiator $14 Million from their signing bonuses.

Comment by Steve Wagner on Wednesday

Dee A said it WAY better than I just did with my long commentary.

Comment by Steve Wagner on Wednesday

Utica,

 Like you said, both are paid for by the driller. I'm a landowner, therefore I believe in case #1 I pay taxes on the income that I received which would be the $4000/acre.  I would rather pay the 35% to 42% taxes on case #1 than #2!! The fees to the Negotiator's(Lawyers) being paid for their services would be taxed as income to the Lawyers. The driller would send the 1099 to the Lawyers and they are responsible for the taxes on their income.  I was told that the O&G were ok with this(which they agreed to it) because they can keep the numbers down. It's better for them to announce $4000/acre and pay the fees than to announce $4200/acre. The down fall for the landowner might be (I'm not an accountant) is using the fees as a deduction on my taxes. I'm not sure as I have talked a little to my accountant but did not cover this. All I know is that SEOLA's team of Lawyers are WAY more knowledgable at Negotiating with the O&G than I am.

 

 

Landowner Comment by Dee A on Wednesday

You really like to seek out things just to debate don't you?  

What I said stands. There are only very slight differences. In one case you are on the record of having received 4.2k, then you deduct what you paid the attorneys on your taxes. On the other case, you are on record as having received only the 4k and don't have to deduct anything.

In any case, this is just really goofy to argue about.

 

 

Comment by Utica Shale on Wednesday

@ Dee_A,

 In both scenarios the Driller paid $4,200 per acre.

 Case #1- $4,000/acre to landower & $200/acre to Negotiator

 Case #2 - $4,200/acre to landower

 In both cases the cost to the Driller $4,200/acre.

 Where is the benefit to anybody?

 If the 4.5% does not come out of your signing bonus then you are suggesting that if paid directly the money/cost was a "special gift" by the Driller directly to your negotiator? Really?

 

 Please tell me the the tax advantage when you get a 1099 from the Driller for the $200/acre that the Driller paid to YOUR negotiator on your behalf. If you do not get a 1099 for the $200/acre then the IRS may have problems with you and your negotiator since the negotiator worked for you but the negotiator is paid by the opposing party (the driller).  If you do not get a 1099 for the $200/acre then is that "hidden" income to you then considered Tax Evasion?

 

Landowner Comment by Dee A on Wednesday

It's impossible to know whether that's true or not. It might just as well have been a case that the O&G Co. said we're paying no more than 4K per acre, but the legal team was able to push the final amount up by having them agree to pay the legal fees. There also may be tax benefits for the landowner should they be on record as having received 4k rather than 4.2K

Comment by Utica Shale on Wednesday

@Steve Wagner,

"... no landowner has had to pay the 4 1/2 percent. They have negotiated it so that the O&G companies pay it for the landowner!! ..."

 

 And so you get a Signing Bonus that is 4.5% lower than the landowner who does pay the negotiator directly.  You gained nothing by not paying the negotiator directly. I get $4,200/acre but I pay the negotiator $200/acre, so I net $4,000/acre. You get $4,000/acre and the driller pays the $200/acre to the negotiator. What is the difference? Either way YOU did pay the negotiators fee out of your Signing Bonus. So, the 4.5% does matter.

 

Comment by Steve Wagner on Wednesday

Dee, You're right, If you don't like the lease they negotiate for you, you don't have to sign and you're also released from their landowner agreement and owe them nothing, unless you sign with the same O&G Co. that they brought you!

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