There is no such thing as "normal" when it comes to landmen. They all have different creative schemes for getting their "cut" of your oil & gas money. Some ask for a flat % of whatever signing bonus money they can negotiate for you. Some ask for a % of any royalty you may get. Some will ask for a flat fee. Some will take "all sums above" a figure you agree to. Some make a their own deal with the oil & gas company that is separate from and over and above your lease. Often there are combinations of these methods utilized. Your best bet is to join a non-profit landowner group if you are willing to take the time and do the research and educate yourself. A group with large acreage committed will have considerable bargaining power with O&G companies and you don't have to give up as much of your lease bonus/royalty. You only get to sell your mineral rights once so educate yourself and do it right.
Subject: Letter agreement with broker: Ohio Landowners Sent: Jul 7, 2011 7:37 PM
A message from Olin Hupp to all members of Ohio Landowners on Go Marcellus Shale!
I was approached by Pro-Classic Real Estate to sign a letter agreement allowing them to offer my land in Morgan Co for oil & gas lease. Pro-Classic ask for "all sums" above $1250 for introducing me to any interested oil & gas co.
Is a "all sums above" normal instead of a % of the per acre?
What makes this site so great? Well, I think it's the fact that, quite frankly, we all have a lot at stake in this thing they call shale. But beyond that, this site is made up of individuals who have worked hard for that little yard we call home. Or, that farm on which blood, sweat and tears have fallen.[ Read More ]