There are many Gas and Oil Company's out there leasing if u join a landowners group u than in turn cant just sign a lease w one of them if u wanted to if i were u i would just wait if a company is interested in leasing ur land for drilling they will come to u
Yes, they are tied in w/ Co-Exprise, and I know about the 4 Cty. group. The attorneys they are joined w/ are the same as I had for my shallow well lease. The Idea is to make our properties more appealling once in a large group (20k+ ac.), thus get a better deal. The committment is for 6 months renewable unless given 30 days notice. Their fee is 6% of bonus payment payable when the landowners get paid. Signing w/ the selected gas co. not required. I have also seen a similar offer w/ only a 4.5% fee. Hoping someone who has done a deal thru CX to respond w/ pros &/or cons. I know for sure I dont want chx or halcon.
Should the extent of remuneration to the Landowner Group be limited to a fixed percentage of the sign-on bonus, it seems that the interests of the Landowner Group and the Landowner would likely be in alignment. A caution would be that the highest sign-on bonus would not necessarily be attached to the best lease. The sign-on bonus is the appetizer, what happens afterwards is the real meal.
In the past, I have heard of arrangements that also result in a portion of any future royalties going to the group that markets the lease. This practice greatly troubles me, as these individuals will be sucking off of the properties (in leach like fashion) essentially forever. I have seen one arrangement in which all royalties first go to the group that marketed the lease, then periodically are disbursed by them to the Landowner (after the marketing group has removed their cut).
An arrangement that I am a bit ambivalent about is one in which the group that markets the lease receives an Over-riding Royalty Interest (ORRI) directly from the O&G Company. In that case, the group that markets the lease is separately negotiating for what is in their best interests; perhaps in a fashion that does not necessarily align with the best interests of the Landowner.
For an individual, the assistance of a knowledgeable middle-man could well prove of value – so long as their compensation is reasonable and finite.
Before signing any agreement with a Landowner Group, I would suggest that you are given (in writing) a detailed description as to exactly how they will be compensated by any and all entities (do they obtain additional consideration/compensation from the O&G Company?). Additionally, I would separately spend the several hundreds of dollars required to have a disinterested qualified Attorney (who represents you, and you alone) review all documents – prior to your signing them. You only have one chance to get it right.
All IMHO, with nothing above substituting for advice from a qualified Attorney.
Good luck, and please let us know what you learn, and how matters turn out.
Thanx for your input. Are you permitted to indulge any of the particulars of your lease and/or group?
Thanx JS, That is both encouraging and informative. I do know of another attorney whom I can consult with - great idea. Part of what I like about the proposed agreement is each lease can be tweeked to some extent. By the way, what does IMHO mean?
Looking for a real meal,
RE: "what does IMHO mean?"
In my humble opinion.
All I, or most anyone else on this board offer is an opinion.
It is up to the reader to decide whether that anonymous opinion is worth anything.
Oh yeah! I knew that (not!!). Thanx, and is that your pet coyote?
It has been our experience with our clients that landowner groups sound good in theory, but they do not benefit the landowner as promised. We do not recommend landowner groups for many reasons and there are hundreds of landowners who have signed that will agree. Be careful and don't be fooled by the hype you may hear at the town hall meetings or with the fancy mailings.
Do you have that opinion about all land groups? I want to sign up with Buckeye Mineral but haven't quite been convinced that's the right thing to do.
Fang, Thank-you for your reply. I have read many of your posts and could not agree with you more. I have just under 70 acres in New Lyme Township.
I just can't see signing up with a Land group before knowing some terms of the lease. Everyone I talk to says I'm going to be left behind if I don't get in a group. I think I'd rather take my chances and make sure what I'm signing up for is what my family and future family will be happy with. I think many people are only seeing $$$ and not realizing what they're getting into. Thanks again!
Join a landowners group in your area that does not charge you a commission from your signing bonus. A group where the leadership has their own property involved as well as yours so you are not sold out for a quick profit. If the leadership has confidence in the job they are doing allowing members to opt out wont be a big deal as very few will leave. Exciting times ahead for 2013, Happy New Year !