Misleading Shell landman

Had a Shell landman stop by the house the other day. One of the tricks he tried was to flip open his folder and show me what he said was a check for the full amount, and then quickly close the folder.  I asked him to re-open the folder and when he did, I saw it wasn't a check but a bank draft. Big difference. A draft is more of a promissory note saying that they will release the funds at some promised point...like after the title work is done after 90 working days. And if they don't release the money, it can be quite a legal fight.

When I said "Thats not a check, its a bank draft" he said "Yes but you can take it straight to the bank" again implying that it could be cashed immediately. When I told him that I cannot cash it until the funds were released many months later, he changed the subject.

I had met with a bank's financial adviser and he told me that they had an elderly couple come with such a draft and told him they had just ordered a new car, thinking they could just deposit the draft like a check since the landman had called it a check. They had to call the dealer and cancelled the order.

Be very careful in dealing with these landmen.  You have to parse everything they say.  After meeting this guy, my local politicians are looking much better.

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Permalink Reply by Dave on October 26, 2011 at 11:13am
should one landman disparage another Jim?
Permalink Reply by thelma cathleen hays on October 26, 2011 at 12:23pm
they are all alike, been dealing with landman, company men, pipeline guys , waterline guys, have not yet had one tell me the truth. 
Permalink Reply by Jim Litwinowicz on October 26, 2011 at 2:51pm

David, first up I am not a landman. Landmen work for the oil and gas companies either as employees or a contractors.  As such, their job is to get the best possible deal for the company. Two year ago, I was looking into becoming a land man...until I talked to one and he told some of things they were doing. I've been cursed by high morals and couldn't do it.

I work as a contractor for CoX. They work with landowner groups to grow the group and then get them the best deal possible. I sleep much better knowing I am on the side of the land owner/lessee.

And even if I was a landman, I would call out unethical and misleading practices. When someone does something below decency standards it hurts the entire industry.

Just today I talked to an Amish gentleman that I had talked to last month and he accused me of lying to him.  When asked to explain why he thought that, he said it was because I told him they couldn't just take his gas if he didn't lease. Two guys were there earlier this week and told him if he didn't sign they would just drill underneath his land and take it.  I had to tell him they were lying and just trying to scare him into signing. At that point he told me he wasn't going to sign with anyone.

These guys make everyone look bad and build distrust. I don't know who they are or what company they were with or I would call their office a file a complaint.

Too many companies allow this stuff to happen.  And it is hurting the entire industry. People around here have little respect for landmen and even the good ones suffer because of it.

 

Permalink Reply by ShaleAdvice (Steven C. Townsend) on October 28, 2011 at 2:44am

What does that mean, "contractor for CoX"?  Do you or your employer represent the individual landowner with respect to their individual lease and addendum or do they need to hire someone else to do that?  It is my understanding from reading their agreement that they should hire their own attorneys.  There are a lot of people out there who gather landowners up and sell to the highest bidder at the time, but what happens 6 months or later when the drillers have come in and something goes wrong? 

I'm not picking on you or your compnay, but I want to make sure everyone understands that their are just as many other gourps trying to take advantage of landwoners just like the some of the landmen.  I've reviewed the leases and addendums that several landowners singed with the encouragement of CoX in 2010 and 2011...these landowners have brought them to us because they have already had issues with them.  What should I tell them??  Who should they call??

Permalink Reply by Jim Litwinowicz on October 28, 2011 at 3:32am

I am an independent contractor that has agreed to help Co-X aggregate landowners. They are not my employer.  Any and all landgroups always, or at least should, encourage landowners to have their own lawyers review any document before they sign them if that is want they want to do. Thats just good business practice. It protects the group leaders and the landowners.

The purpose of the agreement is to get them the best deal possible at that time. If they are paying the .85% of the royalty, then Co-X will do random audits of the well logs to ensure proper royalties are being calculated and [aid out.

I don't know what "issues" people are having so I can't advise anything. They should call Co-X to work out any issues and then proceed in their best interest.

Permalink Reply by Gasman on October 26, 2011 at 11:27am
I have had my issues as well in fact we probably all have.  I guess they are just doing their job and they are nice guys but heck be more honest with us huh?  Don't mislead people so much.  They will close the deal, cash their commision check and be gone forever we need to live with the lease for a long time.  My advice is don't take their word at anything, confirm and verify everything!  If you can join up with your neighbors for better bargaining power and also so you know what the landman is telling your neighbors and what is really happening in your area not what the landman tells you.
2s72s0k9mm8gdPermalink Reply by 2s72s0k9mm8gd on October 26, 2011 at 1:16pm

I would have thought every landman within a 50 mi. radius would know who you are ,  Jim! LOL

What is the normal amount of time from signing to bonus payment? I was told it may take the full 90 days.

Permalink Reply by Jim Litwinowicz on October 27, 2011 at 2:10am

Glenn it varies by company. From what I hear, Shell will take the full 90 days...and that is 90 working days, excluding weekends and holidays. Word on the street is that CHK delays theirs even longer.

I know that Hilcorp has already paid some people.  The lease calls for them to pay 10 days after the title work is done and 90 calender days to complete all title work or the lease can be cancelled by the landowner. Since we signed Sept 7-9 that means it was about 45 for the first checks. Still waiting for mine!

Permalink Reply by Brett R Oxley on October 27, 2011 at 7:06am
CHK, takes the full 90 and squeezes a few extra from that.
Permalink Reply by Dave on October 26, 2011 at 2:06pm

have lease will travel 

kinda like will pallidin have gun will travel

 

 

 

2s72s0k9mm8gdPermalink Reply by 2s72s0k9mm8gd on October 26, 2011 at 2:23pm

That's going back a few! I think the Marcellus was just beginning to form then! LOL

Permalink Reply by Dave on October 26, 2011 at 2:32pm

black and white tv and I caught it as a rerun

how sad I remember---mike nelsons sea hunt before I walked to school up hill both ways carrying a hot potatoe for lunch

and a mans handshake was his word a long time ago..............................

 

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