After having been a Landman in all capacities for over 30 years now (ie. first as a courthouse record checker, then as a broker, then 17 years as an Operating Company Landman and now simply managing what we own) I have definite opinions on how the BONUS payment matter needs to be handled. The field brokers working in the courthouses and motel rooms etc. are guys out there trying to make a living. We have a lot of youngins out there now who simply do not have the experience that some of the older pros do. I get calls every week as I manage substantial mineral interests in 8 producing states. Some of the younger Landmen have not had the time they need to learn to live by strict ethics due to the booming pace of the industry at this time.
MOST LEASE BROKERAGE COMPANIES ARE WORKING UNDER THE DIRECT ORDERS OF THE COMPANY CLIENTS THEY HAVE. NONETHELESS, THE BROKERS NEED TO DEMAND THAT THEIR CLIENTS BEHAVE ABOVE BOARD AND ADHERE TO LONG ESTABLISHED PRINCIPALS THAT MOST LANDMEN HAVE LIVED BY FOR YEARS AND YEARS.
IT IS REALLY IMPORTANT TO KNOW THAT OUR DOMESTIC OIL AND GAS INDUSTRY CANNOT SURVIVE WITHOUT THE SERVICES OF THESE FIELD BROKERS, THEY ARE IMPORTANT PLAYERS IN THE FABRIC OF THE DOMESTIC E&P INDUSTRY. THE BY WORD IS THIS.....THE AVERAGE MINERAL OWNER NEEDS TO TRULY LEARN AND UNDERSTAND HIS OR HER ASSET. KNOWLEDGE IS POWER.....KNOWLEDGE IS KEY TO SUCCESS IN ANY NEGOTIATION.
My process is that when I negotiate a lease with a broker who calls, that once the terms are agreed upon, we will execute the lease form as negotiated, I will send the broker a COPY ONLY of the executed lease and will send them our W-9 form, I tell them in writing, I will give them 15 days maximum to send a CHECK for the amount due......at that time, I will then (and only then) mail them or Fed Ex them the original fully executed lease. I explain in WRITING, that if we are not paid in the said 15 day time frame, THAT THE TRADE IS DEAD AND NULL AND VOID. I make exceptions to this rule if I have extensive experience with the buying broker or the company he or she is buying for. Sometimes I will give 20 days....but no more....PERIOD. I will not sign a brokers draft no matter who it is from.....and when they tell me that it is "subject to approval of title", I tell them........."go do the title exam first, then call me back and if the lease is still available, then we will talk but don't call me until you have your homework done first".
The subject of "Cold Drafting" is deplorable and un acceptable.....no Landman who gives a damn about his or her reputation would ever work for anyone who would even condone such a thing. THE CURRENT PROBLEM WITH THIS ISSUE HAS BEEN MASSIVELY PROPAGATED BY AN OKLAHOMA CITY OIL COMPANY WE ALL KNOW ABOUT AND I HOPE THEY GET THEIR ASSES SUED BECAUSE OF THE MUD THEY HAVE CAUSED TO BE THROWN ON ALL US WHO CONDUCT OUR BUSINESS ABOVE BOARD AT ALL TIMES. I personally plan on writing the President of the American Association of Professional Landmen about taking a stance on this matter immediately.