Have you received an offer to buy your minerals? What State/County/Township are you in?

I'm in Ohio/Noble/Marion and continue to receive offers.  14 so far by mail, and another arrived yesterday.  Post your information and I'll draw a map of "mineral interest".    Have your offers increased, remained constant, or stopped coming?  Just curious, and it might be fun.  Thanks.

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Permalink Reply by Mark Duncan on May 27, 2013 at 2:36am

One of the purchases that was presented to me was for gas and oil, of course all shales but nothing else( cetainly enough though) surface rights were negotiated starting at set amounts of money and still owned by the property owner. That included how far a well had to be among other things including logging, pipeline depth loss of tillable land. This was going to be handled in an adendum to the contract/deed.Hope that helps some.

Permalink Reply by Trapper on May 27, 2013 at 2:05pm

Bottom line: Don't sell your rights!

How many more of these mineral buyers have to be exposed as the minions of the big guys for all to see?

Think about it. Why would they pay for the milk when they can buy the cow for a small fraction of the price and have the milk for free?

Anyone who tells you otherwise is a wolf in sheeps clothing. There are many wolves hunting through our flock , don't fall victim to them.

Permalink Reply by John Stanton III on June 2, 2013 at 9:02am

TOTALLY AGREE  HOW DO THEY SLEEP AT NIGHT??????

Permalink Reply by Jeff bunn on May 28, 2013 at 4:31am

I have leased with Pleasant view management llc. in Noble twnshp, Noble county

Permalink Reply by Allen M Breyer on May 28, 2013 at 4:38am

Yes!  My property is in Windham Township, Wyoming Co PA and I probably receive two written offers a week.  The most recent one is offering more than Chesapeake paid for the rights in the beginning (I'm a member of the Wyoming Co Landowners group) but obviously it's for a permenant sale of minral rights, not a time-limited one like the Chesapeake lease.  One wonders if these offers represent something.

Permalink Reply by The Hiker on May 28, 2013 at 12:02pm

Thanks Jeff and Allen.  I'm keeping track of the replies, and you guys so far are right in the thick of it for the Utica and Marcellus. 

The more responses we get, the more complete the map becomes.

Permalink Reply by Alan Bowers on May 28, 2013 at 7:17am

Ohio, Columbiana County, Wayne Township

 

Received a letter from Gateway Royalties LLC, with an office in Carrollton Ohio, seeking to purchase an interest in my royalties, the end of March beginning of April 2013.  I stopped down at their office to find out the details of their offer.  I spoke to Aaron Pilgrim, Land & Marketing Manager.  Aaron said Gateway was focusing on leases owned by Chesapeake and so far they have acquired 50% interest in 6,000 acres.  I received a verbal offer of $2,000.00 per acre for 50% of the royalties from my present lease and any future oil and gas lease.  In addition, I would keep any Bonus Payments and any future Lease negotiations would be up to me but I would be required to at least make an attempt to lease again if my present lease expired.  I asked him to write up the offer.  Aaron said he would have it in the mail that afternoon.  It was clear from my conversation with Aaron that he did not understand that all Oil and Gas Leases were not created equally and he had never heard of ALOV or the leases created by the landowner group. 

 

Three (3) weeks go by and nothing in writing.  Then I get a phone call from Aaron.  Aaron had discussed things with his boss, the owner, Chris Oldham (full name Larry Christopher Oldham).  Chris didn’t want to tie up such a large sum of money in one area (I own quite a few acres).  The offer changed to $1,000.00 per acre for 25% of the royalties from my present lease.  Again, I asked him for the offer in writing.  Aaron said he was in Fort Worth Texas at the time of the call and he would get it out in the mail in the morning.  More than a week later something finally shows up in the mail.

 

Gateway Royalties LLC is registered in Ohio as a foreign entity.  From what I have been able to track down it appears to be a sole member Texas LLC, with Chris being the sole member that operates out of Chris’s home in Fort   Worth Texas.  I found news reports that Chris had put together $34 million in venture capital from investors to buy royalty interest in oil & gas leases here in Ohio.

 

After reading the proposed Assignment of Oil and Gas Royalty that was prepared by Chris Oldham it appears that they are not checking the recorder’s office for specifics of each individual’s lease that they make an offer on.  Also received was a separate Order Of Payment and Agreement.

 

The Assignment of Oil and Gas Royalty stated that if the Assignor (royalty owner) was not able to negotiate a new lease, if the old one expired, that the Assignee had the right to negotiate one on the Assignor’s behalf.  There are some serious pitfalls with that clause.  There was no place in the Assignment for Chris to sign the agreement on behalf of Gateway.

 

The Order Of Payment and Agreement did not contain any place on the document for it to be notarized by either party.  Payment could take up to 90 days with an additional sixty (60) days if the property had a mortgage on it, for a total of one-hundred fifty (150) days until the assignor would receive payment.

 

There was nothing in either document to void the agreement if Gateway Royalty LLC failed to make payment.

 

The Assignment of Oil and Gas Royalty and the Order Of Payment Agreement remind me of many of the older one-sided Oil and Gas leases that I have read, not very well crafted and too many questions left unanswered that could lead to litigation down the road many years later.

 

If time permits perhaps we will see how they react to a counter proposal.

Permalink Reply by Nicholas P. Sciotti on May 28, 2013 at 8:09am

Alan, have you had anyone else review the proposal or negotiate a proposal on your behalf? The reason I ask is because my business partners and I have seen these firms try to prey on "un-represented" land/lease-holders time and time again. Even if it's not with a group you actually pay to "represent" you, I'd still recommend a professional presence..

We do it for our clients all the time, although my firm actually has a group that will come in to negotiate on behalf of our clients (assuming the property is over 500 acres, which is sounds like yours is..). A little professionalism tends to push these groups to more serious offers or no offer at all.. (and by the way, I - in no way, shape or form - work for or with a oil/gas company, nor do I receive the slightest form of compensation for this type of assistance). I work with a firm that simply manages investments, estates, endowments, and the financial planning strategies of our clients; however, our firm was quick enough to realize most of our clients were the ones holding the mineral rights and it would go a VERY long way to provide a dedicated team to help them with whatever they needed as most of them never dealt with this type of process.

Can we share phone numbers on here? (i'm a little newer to this as a number of my clients recently requested I get on and try to answer some of the questions flying around out there, especially now)? I'm only asking because I'd be happy to describe, in slightly greater detail, exactly what I mean by my preceding message.

Good luck though!

_Nick

Permalink Reply by Chris Oldham on May 28, 2013 at 10:24am

Alan-

Gateway Royalty LLC is a royalty acquisition company located in Carrollton, OH.  My  wife, Christinna and I and our now 3 month old daughter bought a house and moved to Carrollton about a year ago.  I purchased the old Huntington Bank building off of 2nd st. in Carrollton across the street from the courthouse.  We live here now and plan on being here going forward.

 

With respect to the offer that you received, the offer was for $4,000 per net acre. An example is: If a royalty owner owns 100 acres and sells 50% of the royalty, the offer is calculated as $4,000 * 50 acres (100 * 50%) = $200,000.  I want to make sure you understand that it is not $2,000 per acre for 50% or $1,000 per acre for 25% because that is not right.  It is VERY misleading when people think our offer is $2,000 or $1,000 per acre, that is just not the case. Our offers are based on the situation that each landowner is in based on: the lease terms, location to pipeline, timeline of development and most importantly the geological window you land is in.  We do take into consideration the lease terms before we make an offer on your property if we know them.  Many times there is only a Memorandum of lease filed of record.

 

Gateway's counsel Vorys, Sater, Seymour and Pease LLP out of Columbus drafted the Order of Payment Agreement and the Assignment of Oil and Gas Royalty. 

 

Gateway has closed on every transaction that it has signed unless the royalty owner's bank will not consent to the transaction.  We have the money in the bank as your research indicates. 

 

Please feel free to come by the office and speak with me directly.  I am here and very easy to get a hold of.  Thanks.

 

Chris

Permalink Reply by RonD on June 4, 2013 at 10:50am
Chris, your promo material is written to lead me to believe you and Aaron are long time locals but Aaron's Linkedin profile says he is a broker Landman with Cimmaron Field Services in Texas. Aaron's letter he sent me also had nothing but bad things to say about Chesapeake in the Utica. Why would he then tell Alan that you're focusing on Chesapeake? I appreciate that you have moved to this great state but why try to convince us how poor our future is when you're trying to invest in it and just relocated here?
Permalink Reply by Chris Oldham on June 4, 2013 at 4:16pm

Ron-

Thanks for the response. I moved to Ohio to become apart of the local Carrollton and Carroll County community.  Gateway's ONLY office is in Carrollton, OH.  Gateway is a local company even though we have only been in business for over a year now.  During our first year we have sponsored and invested in many organizations in Carroll County.  We are doing are very best to become part of this community and area of eastern Ohio. Being in the area is our greatest strength because most of the other companies trying to buy minerals or royalty are from out of state.  

With respect to Aaron, he works full time for Gateway and will be updating his LinkedIn profile.

The Counties that we are presently working being Carroll, Columbiana, Jefferson and Harrison are primarily being operated by Chesapeake.  There are some other operators in these counties, but Chesapeake is the primary driver right now.  The majority of the acquisitions being made are from individuals who have a lease that is owned by Chesapeake.  This is what Aaron meant.

The intention of the package that was mailed to landowners was to allow Gateway the opportunity to speak to landowners about what we do.  Unfortunately, there were many landowners that received $50 per acre signing their lease in 2008-2010 and they still have a bad taste in their mouth and thus have been difficult to speak to.  The other side is that there were so many things told to landowners by landman about the future royalties that were very inaccurate (ie. not talking about a decline curve or not calculating it into royalty projections), which have made for difficult conversations.  Our materials have allowed us to talk openly about everything going on in the area.  With respect to Chesapeake, we used public articles that were written about Chesapeake and the area and included the information. I am sure you have seen some recent articles about the Utica that are positive and other articles that are negative.  The jury is still out, nobody knows.

In my opinion, The Utica Shale is going to be productive and I believe that it will be successful.  As in any oil and gas field, there are going to be great areas, marginal areas and there will be poor areas.  The economics are going to be different depending where your property is located.  Gateway is building a portfolio to diversify its position because we know that it all is not going to work, but hopefully we will have more wins than losses.

Lastly, we're trying to convince landowners that diversifying their position is the right thing to do because that is exactly what we're doing.

I very much appreciate your response and questions.  Feel free to call me anytime.

Chris 

 

Permalink Reply by The Hiker on June 5, 2013 at 3:41am

Yes, feel free to call...    Chris:  Please try to limit your advertisements to an off-line conversation.   I realize this site is a tempting place to post your ads because of the readership, but that is NOT the purpose of the site.  If you can't contain yourself, please take the conversation off this thread and start another.  Thanks.

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