There is no such thing as "normal" when it comes to landmen. They all have different creative schemes for getting their "cut" of your oil & gas money. Some ask for a flat % of whatever signing bonus money they can negotiate for you. Some ask for a % of any royalty you may get. Some will ask for a flat fee. Some will take "all sums above" a figure you agree to. Some make a their own deal with the oil & gas company that is separate from and over and above your lease. Often there are combinations of these methods utilized. Your best bet is to join a non-profit landowner group if you are willing to take the time and do the research and educate yourself. A group with large acreage committed will have considerable bargaining power with O&G companies and you don't have to give up as much of your lease bonus/royalty. You only get to sell your mineral rights once so educate yourself and do it right.
Subject: Letter agreement with broker: Ohio Landowners Sent: Jul 7, 2011 7:37 PM
A message from Olin Hupp to all members of Ohio Landowners on Go Marcellus Shale!
I was approached by Pro-Classic Real Estate to sign a letter agreement allowing them to offer my land in Morgan Co for oil & gas lease. Pro-Classic ask for "all sums" above $1250 for introducing me to any interested oil & gas co.
Is a "all sums above" normal instead of a % of the per acre?
Finnbear
There is no such thing as "normal" when it comes to landmen. They all have different creative schemes for getting their "cut" of your oil & gas money. Some ask for a flat % of whatever signing bonus money they can negotiate for you. Some ask for a % of any royalty you may get. Some will ask for a flat fee. Some will take "all sums above" a figure you agree to. Some make a their own deal with the oil & gas company that is separate from and over and above your lease. Often there are combinations of these methods utilized. Your best bet is to join a non-profit landowner group if you are willing to take the time and do the research and educate yourself. A group with large acreage committed will have considerable bargaining power with O&G companies and you don't have to give up as much of your lease bonus/royalty. You only get to sell your mineral rights once so educate yourself and do it right.
Subject: Letter agreement with broker: Ohio LandownersSent: Jul 7, 2011 7:37 PM
A message from Olin Hupp to all members of Ohio Landowners on Go Marcellus Shale!
I was approached by Pro-Classic Real Estate to sign a letter agreement allowing them to offer my land in Morgan Co for oil & gas lease. Pro-Classic ask for "all sums" above $1250 for introducing me to any interested oil & gas co.
Is a "all sums above" normal instead of a % of the per acre?
Jul 7, 2011