Replies to This Discussion

Permalink Reply by Mike Higgins on September 27, 2010 at 2:47pm

what is the 5% commission for? for negotiating a lease? contacting production companies?

I signed a lease on my residential property in Butler county.... would like to do the same on some commercial property I own in Lawrence county

Permalink Reply by Rick on September 27, 2010 at 4:01pm

Yes negotiating a lease, and contacting production companies.

Permalink Reply by Mary j. Green on September 29, 2010 at 12:42am

Hi Mike. All I can say to this is, do the math. Let's work off of the 100 acres...100 X 1500.00/acre = $150000.
150000 X .05 = 7500. That's alot of change to pay someone who is going to do for you NOTHING that you can't do yourself. Admittedly, we got a lawyer AFTER writing our own addedum only to have him type the addendum in "legalese" (with alot of wording mistakes that I corrected, I might add). As for his "negotiating" for us, it didn't happen. Any negotiations were done between us and our East rep, who ironically presented us with an addendum from EAST. The total lawyer cost was in the ballpark of $500. Why anyone would pay a lawyer a percentage of anything is beyond me. Just take a minute and consider what they would make if you and all of your neighbors signed with this group. I can guarantee that would be ALOT of money for the very little work that they would do.

Permalink Reply by Mike Higgins on September 29, 2010 at 3:47am

I agree. Our group did have a lawyer (not working on commission) and I had my contract reviewed by my attorney (no addtional cost to me -- part of a legal plan I have). Our strength was in our group's total acreage.

Permalink Reply by Keith Mauck (Site Publisher) on September 29, 2010 at 2:09am

Yes. I am seeing a disturbing trend of 5% becoming the norm for these fees. Beyond lost income, I do see disadvantages with paying someone to lease your land for you... One, they aren't doing anything that you can't do with a good attorney reviewing lease language. Two, if the gas companies want your land, they're are gonna find you. Three, there is an inherent conflict of interest virtually on the same level as the landowner and the drilling company. Obviously, a negotiator is going to feel compelled to lease your land and get paid...which is gonna drive the value of the land down and weaken lease protections. If I were a gas company, I would much rather negotiate with someone working on commission than a well organized landowners group. The bottom line: the only one who can take your best interests to heart..is YOU. But, it takes time and a little dedication. If you are talking about a large chunk of land - it's probably worth it!

Permalink Reply by Joe Baran on September 30, 2010 at 1:25am

The assumption I see with a lot of people is that a lawyer has the skill set to "negotiate" a lease. Most lawyers have the ability to negotiate lease language but not the ability to negotiate commercial terms of a lease (even though they say they do). In order to negotiate commercial terms, a competitive environment needs to be established and research needs to be performed for each opportunity. This can be done by owners without any help. However, depending on the owners availability and time commitment this may not be the best option. I don't think 5% is out of line considering some other groups I see on here and heard of from other places charging 15%-20%.

Permalink Reply by Mary j. Green on October 6, 2010 at 7:46am

I think alot of ppl are seeing the amount offered for signing without considering the taxes that will have to be paid on top of the 5% fee. Again, do the math....believe me that's alot of money for very little worik!

Permalink Reply by Dan on March 30, 2011 at 10:12am

I was told last week that the Mt. Jackson Group is now closed.  You can join Mt. jackson Group phase 2 as it was presented to me.  The only catch is that they now want 8% of the bonus AND 5% of your royalties (for the first five years!!).  How about that deal!!!  Now the Coexprise company they have hired to do the marketing of the land may be worth it.....but it does seem like they are either getting Greedy....or maybe they are having to put so much time into this group, and they see little chance of any major increase in the lease bonus offers of the $2,000/acre thats out there.  They claim to be able to get you a minimum of $3,000/ acre and 17% royalities.  Not sure what to think.....

Permalink Reply by Jim Litwinowicz on August 31, 2011 at 2:55pm

The Mt Jackson group is closing a deal next week for $3000/acre and 17% gross royalties.

Permalink Reply by 015334grltd9m on August 31, 2011 at 3:00pm

Jim,  is it with shell?

Permalink Reply by Jim Litwinowicz on August 31, 2011 at 3:03pm

No, new company

Permalink Reply by 015334grltd9m on August 31, 2011 at 3:17pm

Jim, one family member of 500 acres in Ohio we manage has 52 acres in Pulaski that he is very eager to lease, Shell looked at it and said not in their target area.  If interested, please have the new company call me 330 503 4650.

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