ATTENTION Landowner Group Members

The IDEA of "strength in numbers (acres)" is quite apparently agreed upon by many members. Let’s not forget that a portion of those "numbers' will not have a chance at the lease being paid.  Because if your "numbers" are not connected/contiguous to other "numbers" the valve of your numbers are not as appreciated by the potential LESSEE. And an outfit, no matter how financially secure, only has so much capital it is willing to spend/risk on a project.

Hypothetical Question: What if a group of 25,000 acres agrees to sign but only 10,000 of those acres are contiguous, what would be the incentive to pay the remaining 15,000 ac scattered all over the area? After-all, 10,000 ac would be quite enough leasehold to form producing units.

Also remember lawyers are paid directly from the amount of time spent "consulting" with the client(s) board leaders and it is very profitable to drag the process along for themselves. Every time a call/letter/email/fax is addressed concerning the process of your group.....cha ching, time is being billed. Another thing to remember, your area is not the
only area.....rather than drag it out, an outfit (especially a proven profit making producer not a flipper) just may pack in it and move to another more open-minded area and spend their money there. Which would leave your area open for another round of negotiations with another outfit and the much anticipated billed time for your friends at the law firm?

Hope you didn’t have plans for the bonus money anytime soon, yet the possibilities of a royalty check. Don’t worry, that new roof on your house/barn can wait (it isn’t leaking "that bad"). You can always wait for next year’s model of the truck/tractor you were planning on buying.  Paying off those loans can also wait...after all you've been paying on them for
years already. College tuitions can be paid for by the loans you were planning on getting anyhow. Your daughter’s/son's wedding will be fine downsized, their so in love it won’t matter. Vegas....you can do just as good at the local casinos that are closer to home and are popping up everywhere, you can’t afford to take that much time off of work anyhow.



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Permalink Reply by Schnoozie on November 17, 2011 at 7:07am

I know exactly where it is.

 

Permalink Reply by dr j on November 17, 2011 at 3:00pm

I don't have a dog in this fight but will confirm.... 2 1/2 years ago the flipper contingent was leasing land in Columbiana County.  There are leases out there that paid the landowners anywhere from $8/acre to 75 or 100.   That was 2008 or 2009.  In the summer of 2010 the "big guys" arrived and the offers were 250/acre to start- went up quickly to 800/1000 then 1500.   Stayed around 1500 until the large land groups started to form.  Those landgroups were signed at around 2000-2500 last spring.   Now people are signing at almost 6000.  There might be little "pieces of the puzzle" getting more.   The cold "offer on the table" when the landman knocks on the door is now4000 but the large majority of folks who are signing currently are signing at 5800-6000 with 20% gross royalties.    So while I don't vouch for anything else anyone else says... but those are the facts in Columbiana County.    In fact a family member just had a call to sign up their unsigned small parcels.  4000/17%.   Before they could execute the documents- the O/G company called back and upped the offer to 5850/20%.   When it happens, it happens fast.

 

Permalink Reply by Jim Litwinowicz on November 17, 2011 at 6:58am

Finnbear;  everything you said is true.  However, that does not mean that people cannot share the methods they use, expose their dubious misleading tactics,  or warn others to be very cautious in dealing with them.

Permalink Reply by Finnbear on November 17, 2011 at 7:46am

Jim,

By all means,  we should share the methods they use, expose their dubious misleading tactics,  and warn others to be very cautious in dealing with them. Knowledge is the how other landowners can prevent being taken advantage of by them.

Finnbear

Permalink Reply by Schnoozie on November 17, 2011 at 7:51am

I have gotten "friended" by 10 people now. Must have been something I said.

But thank you everybody, thats a little wierd for me.

Permalink Reply by Schnoozie on November 17, 2011 at 8:20am

I got jumped about my property as soon as I got on here, of course each not wanting to violate the non-solicitation policy.

Two lawyers from Butler, one from Pittsburgh, a "Land Consultant", an "Advisory Team Member" from somewhere near Beaver, Pa. Then finally a Channel Partner.

 

Permalink Reply by R. East on November 17, 2011 at 8:36am

If there truly is a non-solicitation policy, why does a certain someone keep talking about how great Co-X is? They have been trying to sell acreage in northern PA for over a year with no success.

 

Your Post's today have been spot-on Schnoozie.

 

I was part of a "Group" and we, the landowners, put it together and marketed it ourselves.........WITHOUT giving away part of our royalty or bonus money.

I laugh at some of these titles people come up with in an attempt to distance themselves from a "landman" i.e., Land Consultant, Advisory Team Member, and my favorite....."Channel Partner". At least most landmen are straight-up and tell you they are a landman.....

Permalink Reply by Schnoozie on November 17, 2011 at 9:25am

My Atty. sugested I call Chevron since they have some wells that used to belong to Atlas to my South on Rt. 173 just above I-80. Atlas was always good to the landowners up here with their shallow wells. I also Called Seneca in Brookville since they have bunch of wells to my North. I will be seeing them after Thanksgiving. 

Permalink Reply by Finnbear on November 17, 2011 at 1:29pm

I used to hunt some Seneca land in Elk and Jefferson counties.

Permalink Reply by Schnoozie on November 17, 2011 at 10:23am

My point exactly, lets say another deal comes along, and it is a good one with fair terms. You cant take it because you are locked in for a year with them. Then you have to take the one they get for you, they use the word "Obligated" its in the contract.

Say all facts, answer all questions. I never got to the 1420 acre unitization in the contract, saw that over the weekend. Thats 10 properties my size or a unit the size of Grove City I can't imagine my royalites divided by 10 other properties would be anything if I was stuck with that.

Permalink Reply by Nelson Roe on November 17, 2011 at 10:27am

As I stated before, not all groups will obligate you like that.  The group I joined you could withdraw up to the point of signing the lease.  Also, you can often negotiate the max unitization.  The companies seem to want to have at least 640, but would prefer larger.  1000 - 1280 seems to be fairly common for a limit around here. 

Permalink Reply by Schnoozie on November 17, 2011 at 10:35am

I look at it like this. 640 acres is my land 135, plus my neighbors 100, go across th street his 135. add the opther ones as far as I can see you get 640. Looks big enough. I f they wanted to put me in a bigger unit for a well with bigger potential I guess they would just come to me and explain their plans. I will have to ask about that.

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