lessors
I have been in touch with Landowners Leasing Group LLC and wonder if anyone else has been contacted? They want 6% of the signing bonus on less 100 acres (whichI have). Thanks for any information.
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Permalink Reply by Art Tripp on
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I believe you may have read several of my earlier writings so I won't duplicate them in this thread (most can be found under my profile). We sent in our paperwork for LLG two weeks ago and I spoke with LLG today just to do a check on the current status of things. The meetings they had were primarily information sessions and not so much set up to immediately sign folk so things started somewhat slowly. Since then they have had landowners sign up with LLG and have received an increasing number of phone calls and such as word has spread. They are presently reviewing the information on each landowners properties and forming into groups in regard to leasing opportunities. Those who have signed with Landowners Leasing Group will be receiving a copy of the signed (by LLG) consulting agreement as well as access information to the 'client only' section of their website. They are having another meeting at Salt Fork Lodge on the 20th and while this meeting concerns the 'selling' of oil and gas rights, most of the same representatives that presented the previous meetings will be there and can be available to answer questions on the leasing aspect of LLG. I'll likely have more to post as things develop and change, but for now that's the status as I know it.
As a sideline and through contact I've had with my job, the O & G production and infrastructure continues to assemble with a lot more to come (and a lot more growing will be happening in the area). Some wheels are turning slowly, some a lot more quickly, but for the most part all are progressively turning. A lot of big things are being said about Cambridge and the surrounding area so it will be interesting to see the change and future development.
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Permalink Reply by Donna M. Thompson on
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I feel that you seem very well informed and wonder what you think about waiting and having the oil companies contact everyne personally thus passing the paying of the 6% since I have only 8-1/2 acres. May I have your thoughts on this? Thanks I wonder if waiting would be more profitable.
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Permalink Reply by Art Tripp on
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With our current leases (Harrison & Carroll Counties) we had relatively small parcels and thus were in a take it or leave it position in regard to what was offered (Chesapeake) - though we did attempt to do better than was offered. I'm not saying that they are bad leases (at least at the time signed), but it's likely that in today's day and age that they could have been better. Our Tuscarawas County property (7 1/3 acres) is currently Held By Production so is out of play at the present.
We have a little over 103 acres in Guernsey County and were somewhat out of the loop when the initial round of leasing occurred a couple years ago so have remained unleased. Since then, we have spoken with several O & G companies as well as attempted contact with others without success.
I am far from being an expert in the area and the more I learn, the more it appears that having some type of professional represenation or consulation can be an advantage - whether it is through a landowner group or individual legal resource. A few of my personal thoughts and feelings are...
Landsmen and standard leases are primarily set up to the advantage of the O & G company (which can be considered a 'good' business practice from the company standpoint) and I would prefer to have some strength on my side in regard to a lease with my personal (landowner) interests - both in the financial aspects and surface protection.
Some folk are finding that while one section of a lease looks great on the surface, an unnoticed provision in another section can take it away.
Royalties negotiated on the Gross, or on the Net with deductions, as well as other intricacies can have a big effect on what the numbers on the check arriving at your doorstep will look like.
The more acreage available to negotiate with (possible by partnering through a landowner group), the more leverage there can be for a better lease.
Having professional representation (legal, financial, real estate and such available with LLG) geared toward the landowner can be an advantage verses trying to do something on your own - important toward avoiding pitfalls that have occurred in several leases I've seen comments on.
Much has been learned and continues to develop on the subject of leasing and I would much rather have the assistance of knowledgable folk in the loop on my side and not take the chance of trying to figure it out on my own and missing a small but vital detail.
Depending on the circumstances, there can be a multitude of possibilities out there, or there can be a limited number of possibilities, and possibly even none at the present.
Given that we are presently unleased and haven't had success in obtaining one on our own, we've decided to sign on with LLG and give it a shot. LLG's consulting agreement runs through April 15, 2014 and if we are able to obtain success through their representation in that period of time, we will be quite happy. If not, then we will be free to continue on our own and pursue another course as appropriate.
In regard to the cost (5-6% of the signing bonus), at the present we have zero signing bonus and zero royalties so if we can improve on that with their help it can be a good thing.
While only time will tell, we are comfortable with taking this route and seeing what happens.
Wishing you the best of luck.
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Permalink Reply by Chris on
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I'm all for landowner groups but 6% and being locked in for a year is crazy. That is potentially a lot of money for them to highlight your parcel on a map and email it to x company. If you haven't been able to lease your guernsey property yet, what keeps them just cherry picking you out again. If no other contiguous land is being offered
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Permalink Reply by Art Tripp on
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We have SWEPI (Shell) leases, which has been purchased by American Energy Partners, adjoining our property to the north, south and on our SE corner as well as Gulfport adjoining to our west. We have had contact with Gulfport with no result as well as contact with various other companies with no interest. We've attempted to contact AEP but have had no response back from them.
From individuals that have been able to make contact for AEP, the lease offer has been for Net on royalties (from which they do not want to move away from) and LLG has been successful in negotiating Gross along with additional protections in favor of the landowner (LLG has also been successful in negotiating that the O&G company pick up the 5-6% on some leases). All things considered, we are comfortable letting LLG work on our behalf for a few months and seeing what can come about.
The consulting agreement with LLG is for six months (actually through April 15, 2014) and not a year.
Given that we haven't had any success in months of attempts on our own and that there is a lot more to a lease than simply signing whatever is presented (especially in regard to the multitude of negative aspects that can occur in a bad lease), and the professional representation and collective knowledge base that LLG has associated with, we signed on to give it a try. If LLG can obtain a lease that we are satisfied with then we will sign, if not then we are not bound to do so.
Each situation can be a little different though and each individual needs to determine what is best for their particular case. For us, we decided to sign with LLG and feel pretty good about it. Time will tell.
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Permalink Reply by Donna M. Thompson on
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I wasn't aware that we are not obligated to accept the offer they make for us. Does that mean we can take any lease that is offered to us to our personal attorney for advice and not accept it? Thanks
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Permalink Reply by Art Tripp on
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The consulting agreement designates Landowners Leasing Group as the exclusive agent for negotiating a lease during the period of the agreement (6 months). During that time, LLG works to obtain a lease suitable for the landowner to sign and if the landowner is presented with a lease proposal during the consulting period which the landowner desires to accept, then LLG will receive their fee based on the percentage of the signing bonus. If no suitable lease is obtained, then the landowner isn't obligated to accept just any offer - you still have to approve and accept any agreement and aren't forced into taking anything. You only accept the lease agreement if you are satisfied with it. In regard to having an alternative attorney or representative during that period, it'd be best to contact LLG for advice in that area.
I would recommend you contact LLG directly at (740) 815-5401 and they will be glad to address any questions or concerns you have.
My only association with the LLG is that I have chosen them to represent my interests in obtaining a lease. I'm not an expert in the field (that is why I've decided to obtain their resources for assistance) and LLG has associated with various legal, financial and real estate professionals to work through all the intracies from the perspective of the laneowner interests - especially important when dealing with a landman or O&G company in which their interests are the priority. If I can get something great through LLG, I would be quite pleased. If not, then I'll be free to pursue whatever other direction I would desire.
As a side note, given that they are working for me and doing all the associated work during the consulting period in an attempt to get a good lease, it is only fair that they be compensated for their efforts if they are successful in obtaining something I want. If they are unable to obtain a suitable lease then I don't have to pay. There are a multitude of courses to take in obtaining a lease (a landowner group, personal attorney, representing yourself, etc.) and I'd recommend looking at each and choosing whatever is best for your individual situation.
Wishing you the ultimate best.
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Permalink Reply by Donna M. Thompson on
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Dear sir: I certainly appreciate your very well written reply to my question. Thanks for taking the time to give me your thoughts on this matter. I am 88 years old and think I do not have a lot of time to work this out on my own. Thanks and take care.
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Permalink Reply by Art Tripp on
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I can appreciate that and since we've tried on our for a while now own without success, we're with the hope that LLG can obtain some results in the next several months during the length of the consulting agreement.
While they're at work though, we're still going to keep up on things both online here and wherever else we can gain some information and should we not have a lease by then, we'll be prepared to continue forward again on our own in May.
In many areas, it seems like it's not so much a matter of 'if' a company will be interested in leasing, but a matter of 'when' they will be interested in doing so. A lot of things are moving forward, just not always as swiftly as might be nice. I would put a caveat with that comment though and it's not always simply a matter of speed in obtaining a lease, but it can also be just as important to get a good lease.
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