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How do you know your landman is doing his best for you?
A couple of months ago we signed a lease with Blanca Peak Energy. The lease was to be for 3 years with a 3 year option. We have had several leases in the past which were done properly and so we had come to trust what we were told. With that said, the lease contained not one, but all four of our properties. Still not being suspicious because we are new to this, we didn't notice he had (Andy Marlette, Blanca Peak) changed the draft to 120 days instead of 90 as agreed on.
Now, that got my attention, after the fact and too late to change it. In the meantime I told my youngest brother, who is executor, that I didn't trust Andy. He told me he trusted him a lot, and he (Andy) was helping us by researching some leases from our past.
Since then my brother gave him another piece of property to lease. He agreed to 60 day draft, 3 + 3. I told my brother at the time I was not dealing with Blanca Peak again. That was 30 days ago yesterday, and no lease yet. I asked my brother about it and he called Andy, who said (again, again, again) that they are covered up and he'll get it out as soon as possible. Well, with a 60 day draft, 30 days since he said he would fill out the lease and however many days we will wait from today before we get the lease, effectively we could have our minerals tied up for 120 days with no money on the table. All this is just one story. I'm sure others have had worse things happen. I can only pray that at the end of the 120 day draft we are paid. From what I've been told often times landmen simply back down after 120 days and our minerals will have been tied up, cost free to Blanca for 6 months. We're learning. Hope the education doesn't take ALL my retirement from me.
I'd welcome anyone else's comments, lease horror stories, etc. These discussions are wonderful for letting beginners know what not to do. I believe I will have a manager from here on out.
Wes Luke
Replies to This Discussion
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Permalink Reply by Morgan Barnett on -
We will not accept any drafts. Heard wayyyyy too many stories like yours. These guys may need a few days to search your records. If they are ready to lease your land, you might give them a 7 day exclusive if the terms of the lease are satisfactory, then tell to come back with a lease and a check or don't come back.
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Permalink Reply by Wes Luke on
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Morgan,
You can do that? Being new to this I saw what everyone else was doing and did it that way. Never would have dreamed of doing it any other way. Thanks so much for the heads up. We sure don't need any more problems like the one we have now. Life is just too short. : )
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Permalink Reply by Morgan Barnett on
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Your the land owner, they want what you got and you are in the driver's seat. You can ask for the moon if you want, of course they can always say no, but if your in a good area, there will definitely be another land man looking. Getting a check vs a draft though is not asking for the moon.
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Permalink Reply by Wes Luke on
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Morgan,
I believe you're right. Took it a while to sink in, but I understand. Here's hoping you have a great day, and thanks again. : )
Wes Luke
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Permalink Reply by r w kennedy on
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Hello, Wes. I think the answer is, they are not your landman. They are the lease agents landman. The oil co's landman. They could be an independent landman, with 120 working day drafts ( I agree with Buddy that it amounts to a free option ). I think the only landman that is yours would be one that you hire/pay, and even then, you need to ask questions. There are landmen and lawyers out there that I am sure do less than quality work. I believe I never communicated with a competent landman before I came to this site and forums. Had the landmen I had dealt with previously done a good job, I'd have never had reason to look for this forum. I'd have been solidly leased, paid, paying my taxes and spending my royalty. I think the less able landman counts on getting a commitment from you, to tie up your minerals, then they can fix it later with you as captive audience. To restate Wes, if you didn't seek them out and pay them yourself, they are not your landman.
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Permalink Reply by Wes Luke on
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Robert,
I hear you. I know you're right and agree on every point. Thanks for your input. I value your opinion because I know what you've been through. I appreciate you taking the time to help me.
Wes
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Permalink Reply by Joel on
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Wes:
I am/was in similiar positoin with a lease in their hands and no bonus in mine. I was advised to file an affadavit of nonpayment with the county courthouse, that should allow anyone new to pick up your lease. That is only if they have not recorded the lease, if they have it is lawyer time.
Joel
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Permalink Reply by Wes Luke on
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Thanks Joel,
From what I've been told you are right, although I haven't heard the term "affidavit of nonpayment". I think lawyer time is an almost last resort. Lawyers are expensive and in ND they are where the landmen are, the same town in a lot of cases. I don't know if there would be an issue of trust since I haven't yet been in a position to use one up in ND. I wonder how many people have heard of a mineral manager? If you have several mineral rights a manager might be the way to go, especially if you are not too familiar with the oil business like me.
Wes Luke
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Permalink Reply by r w kennedy on
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ND is pretty liberal about recording documents. Whether you record an affidavit of non payment or a declaration of lease forfeiture for non payment they should record it either way. A simple phone call to the county recorders office you are going to record it in would probably provide the document title they would prefer. I think they are non judgemental as long as you leave them enough space in the margin for their barcode and enough space for the seal. Of course you need the legal mineral descriptions so they can index it properly.
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Permalink Reply by Wes Luke on
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Thanks Robert,
It's surprising they're that easy to deal with considering how busy they must be. Isn't it a shame so many companies are doing things wrong to people who for the most part can't afford to take a loss or pay an attorney to take care of these things?
Wes
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Permalink Reply by r w kennedy on
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I think the state will do nothing. As mineral owners, all we can do is demand certified funds, and or not let the executed lease out of your hands without cash payment. Other than that all we can do is try to get the word out on these collection instruments, drafts, orders for payment, by whatever name, that are unenforceable, glorified IOU's.
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Permalink Reply by Wes Luke on
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Robert,
I totally agree. In Texas not once have I had a problem of any kind. So, when I started dealing with landmen in ND it was a completely different game. Kinda like protecting your credit cards from thieves. Since all previous transactions had gone so well dealing with honest folks, I never suspected what all a lease can do to your share of the profits. I was taken to the cleaners by Blanca Peak because I trusted them. Since dealing with them, I only know of one landman I trust, other than my manager. That man is Tim Greenheck with Copperhead in Minot. In fact I need to introduce my manager to Tim. They are both honest and forthright in their dealings and possibly can help each other. Have a great day, Robert.
Wes
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