Replies to This Discussion

Permalink Reply by Gasman on December 5, 2011 at 7:26am

Matthew,  you had asked him about his fees once before and he not only did not reply to your request but he deleted all of his posts.  I too had heard that he was charging 5% of bonus and then taking 1% of the royalty too......outrageous in my opinion.

I guess if this fee schedule is incorrect he will reply  to correct it otherwise I guess it is what it is!

Permalink Reply by James Brink, Esq. on December 8, 2011 at 10:09am

Unfortunately, not all landowners are savvy businessmen.  Many folks are blinded by the fancy fake check being waived in their faces by the landman sitting at their kitchen table.  I have dealt with dozens of landowners who went to their "family" lawyer for advice on their lease.  Naturally, anybody unfamiliar with the industry will read the standard Producers 88 and opine that it looks "legal."  That is the real travesty.  Then when the well is drilled next door and the landowner has 1 acre in a 640 acre holding his land HBP forever, what is to be done?  Nothing but collect a miniscule check for the next 30 years.  Frankly, I don't consider helping landowners to maximize thier financial position "wiggling" into their pockets. 

Permalink Reply by James Brink, Esq. on December 8, 2011 at 10:02am

Gasman:  I replied to Matthew Santiago below.  We have nothing to hide and freely disclose our fee arrangement.  I challenge any other party offering services similar to ours to do the same.  I can't explain why our posts were deleted, but I can assure you that we did not delete them.  And we certainly would not delete them in order to avoid answering a question. 

Permalink Reply by James Brink, Esq. on December 8, 2011 at 9:58am

Part true, part not true.  Yes, it is true that our fee is 5% of the paid up bonus.  But we do not intend to take the money and return to Texas, or wherever.  For this fee, we will provide continued legal services for 5 years after the signing of the lease.  Most production operations will commence within the first 5 years, so we will be there when the flagmen and dozers show up to make sure any restrictions negotiated in the addendum are followed.

More important, we will be there to address any water issues that may arise.  If you read some of the producers' addendums carefully you will see that they will exert "best efforts" to remediate water damage.  This is not enough.  Their "best efforts" needs to be defined explicitly.

The 1% of the production royalty WAS added at the request of landowners who felt more comfortable with us being tied to the land in order to address future legal issues.  When we first began acting as a landowner agent, this provision was not originally in the agreement. SO we added it.  NOW we have removed it.  However, by removing it, we limited the duration of our representation to 5 years rather than for the life of the well.  However, should an individual landowner request a "life of the well" period of representation, then we would negotiate a continued annuity to cover our legal exposure.

We are hiding nothing and if you come to one of our meetings we will provide you with a copy of the agency agreement for you to reveal to the world.  Our services to the landowner are unique and, in our opinion, necessary.

 

Permalink Reply by Gasman on December 10, 2011 at 7:30am

I personally believe that a good O&G attorney will give me a lease and addendums that will protect me.......meaning that if it is a good lease I should not need the services of the attorney after the signing.

But I realize that I may need them for a rare issue and the charge will be $150/hour...thats reasonble, isn't it?

But my math may be fuzzy....if I utilize your advice I will pay 5% of my bonus money?

Current offer from Shell= $3250 x 5% x 120acres =  $19,500 that i would have to pay you!

I could pay my O&G attorney a whole lot of hours or keep the money for myself :)

Permalink Reply by mike on December 10, 2011 at 12:19pm

I am with you gas

Permalink Reply by Johhny Jacobs on December 12, 2011 at 9:20am

Rebuttal James Brink Esq.?

Permalink Reply by James Brink, Esq. on December 12, 2011 at 9:33am

Sorry, I did not realize that we were engaged in point-counterpoint here.  Gasman's math is not fuzzy.  It appears that you and he are experienced enough to proceed on your own, which is fine.  I wish you both the best of luck. 

By the way, an experienced O&G attorney charges a minimum of $250 per hour, which only takes 78 hours of work to reach $19,500.00.  Even an small lawsuit to enforce a provision in a lease will exceed this amount.  My math is not fuzzy - this is almost 30 years experience as a litigator speaking here. 

Again, good luck to both of you.

Permalink Reply by R. East on December 13, 2011 at 5:18am

Amen Gasman.........I agree with you............5% of bonus PLUS 1% ORR!!? I will stick to paying my counsels his hourly fee.

I have cut and pasted my favorite part of "the" post:

The 1% of the production royalty WAS added at the request of landowners who felt more comfortable with us being tied to the land in order to address future legal issues.

WOW, Can you imagine landowners actually "requesting" to give up 1% to increase their "comfort" level? Geezz