To anyone,
After reading the message from Wes about the string of emails, it would be advised to anyone that has used emails with their landsmen to negotiate a lease, to save each and every email, regardless of content.
You could even save to a file in your computer, or print out and save on paper, for whatever reason. I'd recommend you save them for the entire term of your lease, as this may well be needed if you ever need a lawyer.
I agree, save everything that is on paper. Phone calls are fast and much is discussed that you won’t usually have a record of, but are you really in that big a hurry? I handled my business by mail and my lawyers were surprised by the amount of documents I gave them. Save even the envelopes letters come in. Not a bad idea to print e-mails as e-mail storage is beyond your control online.
Hi Snues,
Actually, I could have saved you the trouble of searching, although it is appreciated. My Dad taught me that unless you were ready to fight, you just don't call anyone a liar. So, I knew I hadn't. That was for Andy's benefit. I would like to take this opportunity to thank you for everything you've done to help me and many other people on this forum. Nuff said!
Yours,
Wes
Snues said:
Hi Wes,
I posted Andy's name in the "search" box for the forum, and read the messages that has him name among them. Not once did I see any word that was "lied" or "liar" or even one that would potentially be misspelled, but still lead you to know that it implied the Liar/Lied word.
Perhaps Andy has a guilty conscience about something, and read between the lines to think it implied those words about himself.
There is the chance, there is a message within the mineral rights forum that didn't pull up on the "search" I just ran, so I will leave room for error, that it may very well exist. But you did "publicly" ask him to tell you where it is, if he wants it corrected.
As per your string of emails that you were sent back from him, those haven't been posted to this website, if you called him a liar, you could erase that from the email and resend it.
Dear Snues,
Not being a devil's advocate, but offering a pragmatic (though jaded) look at some of the issues you raised.
IF (seems that is a big IF with some Lessees) the lease was duly signed, acknowledged and the draft paid, there is not a problem with recordation to protect the Lessee. As to placing the leases of record, it shows to what two parties have agreed. No crime there.
Should the average landowner have assistance prior to executing a lease? Sure. The risk is on the Landowner if they do not seek out some help. Nobody has taken advantage of anybody there. Still willing Lessor and willing Lessee. The average field landman will take more leases in a week than a landowner will grant in a lifetime. Who is in a better position to put their interests in a more advantageous position? The amateur or the professional? My opinion is that if you own the surface or any significant mineral interest position, do not be an amateur. You just have too much to risk.
If the Lessee does not take your lease form, are they evil? No. That is their way of doing business. It is still the landowner's decision to accept the terms and form. Again, no crime there. No ethical dilemma, either.
Is the Lessee bound by some sort of state guidelines what can be in the lease form and can he invent any type of lease form he wants? Remember, what is sauce for the goose is sauce for the gander. Either party may propose whatever they choose to the other in the form of lease. The law does not protect you against making a bad business decision.
Are some companies better to deal with than others? Of course.
Let's talk about landmen in general. In the field, there are generally two different types -- local and gypsy.
I, personally, always prefer to deal with the local landman.
After the trade is consummated, he has to still live in the community. This will give the local landowner some small comfort that the local landman is not out to rape, pillage and plunder. The local landman will always try to balance the needs of the company with the desires of the landowner.
The gypsy has no repercussions against his reputation if he takes advantage of people.
The best course of action, in my opinion, is to get all landowners in section after section to co-cooperatively band together to form a leasing syndicate to be represented by both an attorney and a landman. Share the costs amongst everybody. This strategy has worked in subdivision areas before and to my knowledge has not been done on a large scale. Perhaps a good newspaper article in the local paper would get things kicked off. Dunno. If I were the oil company, I would just move to a more favorable area. And then, someone else will come back in and lease the lands, on a real fair lease form, a fair royalty rate and no one landowner is taken advantage of. Wonder if there is a market to form leasing co-ops?
I wish everybody a happy 4th and bless our troops serving overseas.
The saddest part among checking these numbers, is to look at the leases signed and not finding too many that have been checked by a lawyer, or an informed mineral owner.
I am sure within 6 months or less, we'll be hearing from many unhappy victims of this company, not paying the bonus money they thought they would get.
If you have relatives within the counties listed above that own mineral rights, be sure to alert them, to have the lease checked by a mineral manager or an oil & gas attorney.
I can't stress enough, how important it is, to get your leases checked over before signing. The chance a well will be drilled is greater now, than ever before, and you don't want to be stuck in a lease that leaves you with very little.
Louise,
My family also received an offer to lease property in Stark Co. from Blanca Peak... @ 700/MA. Several other co.'s offered a lot more than that.
Snues said:
They slipped in some more recordings, I will post the new numbers weekly on Thursdays. This week, they've begin to increase their numbers in Hettinger and Slope, as well as Stark. Keep in mind, on June 22, they had 435 recordings, and today's total is now 785. Alarming.
County 30-Jun 7-Jul 14-Jul 21-Jul 28-Jul Billings 30 Dunn 13 Hettinger 36 Mercer 1 Slope 51 Stark 654 Total 785
Hi Buddy,
Yes, you are very right, that "we" as the Lessor can choose to sign or not.
I also understand they need to protect their company to get that lease recorded, but the song/dance the companies give, as to why the payment needs to be delayed beyond 30 days is where I take offense.
Why would they want to record a lease that may be "inaccurate" if that's what the title search is going to prove.
I guess thats what the ratification was intended for?
Thanks for keeping it "fair" for both sides in here.
snues
Dear Snues,
I have been a landman for beaucoup years.
From a field standpoint, there is "buy" title and "drill" title.
Buy title is title sufficient to believe that you are buying a lease from the proper owner.
Drill title is title sufficient to induce you to accept whatever business risk exists to drill a well (no title is perfect).
When I am in a competitive situation, it is pretty easy to find out whom to lease. When we are dukeing it out with another company, as soon as I have an idea a person has an interest in a piece of property, I contact the potential lessor. Where I am located, most Lessors know what they own, or have some idea. At that point in time, I either lease them or get them to sign a letter agreement pending the running of buy title.
Now, how long does this take? Depends. In Louisiana, you can generally run title to a lot of tracts in a short time.
In Texas, it takes longer. How much longer? I can have well over 3000 (typically) acres completed in about a week.
Anything over 20 business days is silly, if you are doing it right. This assumes that the courthouse is not so busy or the title so convoluted that you cannot get to all the books you need to pull.
To record a lease before it is paid is morally (if not legally) reprehensible. There are some states that have held that properly worded, the execution of the lease itself provides receipted compensation. Whoa. So, that is what makes the Letter Agreement so good.
In Texas, on the old Pound form of draft, the landowner could rescind the lease before it was paid, even if he negotiated the draft. I basically started going to checks when that case came out.
I uploaded a form exhibit A to this board sometime back that provides a different manner of payment, that is an integral part of the lease form itself. I do not see why that would not work.
Hi Buddy,
Perhaps ND needs to implement that the landowner could rescind the lease before it was paid, even if he negotiated the draft.
It would put the landsmen on their toes, to make sure that the leases were quickly paid.
That Exhibit A format would work great.
Thanks
Mr. Fisher,
As the person who started this discussion, I have experience with Blanca Peak. They will tell you how busy, covered up they are, therefore they can't possibly get a draft for less than 120 days. Or, their latest ploy is to give you a 60 day draft verbally, then you wait, and wait, and wait and still no lease in the mail. You call and they give you the same song and dance. "We are covered up, but will have it in the mail ASAP. During this whole process I'm being told NOBODY is so busy they can't give you a 45 or for sure 60 day draft. And, what recourse do you have as a landowner? You've already had your minerals tied up for 60 days plus another 60 days for the draft which equals,,,,,,,,,,,120 days IF you have the lease notarized and returned. My advice would be to get a mineral manager and let them handle the details. Life is too short and they can negotiate a better deal which will pay for their services. A good mineral manager is worth their weight in gold, if they're honest. I'm very fortunate to have an honest one.
Yours,
Wes Luke
Mr. Luke,
We have already leased a 480 in Billings to a company that took less than 30 days to pay in full after signing the lease. As a mineral owner, it is my choice to do business with Blanca Peak or say no thank you to their terms and lease to someone else. If it is written in the lease that if not paid in full it becomes VOID after 30 days, as we had in our previous lease, and they agree to those terms, does this hold up if it were to go to court? Wouldn't that free us up to lease to a different company at that point?
Thank for the info.
Have care with definitions Mr. Fisher. From what I have seen, courts consider a draft to be the same as cash. You may have to sue to prove you were not paid if the draft is not honored, as I am doing now. Your lease may not be void after 30 days. There is a possibility it may be void after court action, with you paying the lawyer fees up front, if you were paid in full by draft. If the draft is not honored, it becomes a business matter. The courts seem to see nothing wrong with owing someone money. It’s not like bouncing a check, which is illegal. Best to not let a lease out of your hands until you get a check
John F. Fisher said:
Mr. Luke,
We have already leased a 480 in Billings to a company that took less than 30 days to pay in full after signing the lease. As a mineral owner, it is my choice to do business with Blanca Peak or say no thank you to their terms and lease to someone else. If it is written in the lease that if not paid in full it becomes VOID after 30 days, as we had in our previous lease, and they agree to those terms, does this hold up if it were to go to court? Wouldn't that free us up to lease to a different company at that point?
Thank for the info.
Maybe it would be sufficient to supply a copy of the signed lease until the lease is paid in full, then at that point you would give them the original signed document. A company should not be able to get a lease recorded without the original signed/noterized lease? Thus putting a little pressure on them to pay in full as soon as possible, or risk losing the land to a competitor.
r w kennedy said:
Have care with definitions Mr. Fisher. From what I have seen, courts consider a draft to be the same as cash. You may have to sue to prove you were not paid if the draft is not honored, as I am doing now. Your lease may not be void after 30 days. There is a possibility it may be void after court action, with you paying the lawyer fees up front, if you were paid in full by draft. If the draft is not honored, it becomes a business matter. The courts seem to see nothing wrong with owing someone money. It's not like bouncing a check, which is illegal. Best to not let a lease out of your hands until you get a check
John F. Fisher said:Mr. Luke,
We have already leased a 480 in Billings to a company that took less than 30 days to pay in full after signing the lease. As a mineral owner, it is my choice to do business with Blanca Peak or say no thank you to their terms and lease to someone else. If it is written in the lease that if not paid in full it becomes VOID after 30 days, as we had in our previous lease, and they agree to those terms, does this hold up if it were to go to court? Wouldn't that free us up to lease to a different company at that point?
Thank for the info.
I think you have a good point there Mr. Fisher. Don’t forget to write copy across the the copy in huge letters, as recorders have been known to record copies also. Their job is to record, not to determine real/fake or original/copy. My cheap printer makes copies so well that if it was signed in black ink you have to check for the indentations a pen makes to tell the difference. If signed in felt tip black, you probably cant tell. I think it’s a good idea to sign contracts in blue ink.
Mr. Fisher,
I can't answer your question. I'm no lawyer and I don't have experience with that. When we started leasing in ND we had little experience and a lot of trust because of the stellar way things were handled in Texas. By the time trust was an issue we had signed and obligated. If I had it to do over I would have hired a manager to handle things I knew nothing about. There are hundreds of things that can go wrong, I owe it to myself to get the very most I can from these minerals. I probably won't realize anything from them, but my kids and g'kids surely will. And yes, if you would like the name of a qualified manager who is honest and has integrity, just send me a message in private through my profile. Have a great day,
Yours,
Wes Luke
I am a practicing attorney and I have some suggestions which may help prospective lessors avoid the pitfalls of leasing mineral rights. The following are general observations based on what I have read in the forum. I recommend that my clients record all negotiations with landman. Most smart phones come with recording capability and if you do not have one you can purchase a digital recorder from Wal Mart for about $40. Representations that are made in lease negotiations, sometimes do not get drafted into the lease document. The lease usually contains a clause which incorporates all prior negotiations (integration clause) This clause favors the leasee and the recording of the negotiations will keep everyone honest.
Where possible reduce everything to writing. Try to send an email to the landman confirming what was discussed and agreed upon, making reference to time, place and date of the discussions. If there are multiple meetings do emails or memos daily.
In the lease define what marketable title is. Is a prior mortgage which is not subordinated sufficient basis to cancel the lease? I like to define marketable title as that title which is curable. State in the lease who is responsible for getting the subordination agreement with the lender (usually the lessee). Make sure that the payment period for the draft is defined as that period for lessee to verify title. If lessee does not object to title in the payment period, the lease should specify that the lessee is precluded from objecting to title. If the monies are not timely paid the lease should provide that the lessor has the option to terminate the lease or to sue on the obligation to pay. This prevents the lessee from holding the lease for speculation. If the lease market goes down then the lessor would lose the benefit of the bargain unless the lessor can sue on the obligation. Just getting the right to lease back in a down market is of no benefit to the lessor. This is what is going on in Michigan.
Also the lease should provide a reasonable period for the lessor to cure any title problems. If the landman has reviewed the title ask for a copy of his take off sheet. This will give you an idea what they know and do not know about your interest.
Time prohibits me from going farther but I would suggest one more item which courts like to see. Spell out in the lease that it is the intent of both parties to develop the minerals under the lease and that the contract should be read as such. All paragraphs should be read with this purpose in mind and in furtherance of the intent of the parties. Make sure that the lease acknowledges who the drafted the lease (name and company). Hope this helps some.
Mr. Rolinski made some good suggestions, that I would like to add a bit to. Before you record any calls make sure you notify the other party you are doing so or verify you are resident of a 1 party state and it is legal to record your calls without notifying the other party. Memorializing a phone call with a letter or e-mail that you did not record will only work if the other party responds and agrees that the conversation went as you stated, you can try it, but if the other party doesn’t respond, it wont work. I am not a lawyer, but I think my advice is good in this situation. It can be rough out there.
Mr. Luke,
I have to ask why you would say, "I probably won't realize anything from these mineral rights." Do you beleive that the leasing with the potential of drilling in the next few years is not a good possibility? Do you think this big interest in ND Bakken oil is going to stop a lot like 2008?
Thanks for your honest opinion.
Wes Luke said:
Mr. Fisher,
I can't answer your question. I'm no lawyer and I don't have experience with that. When we started leasing in ND we had little experience and a lot of trust because of the stellar way things were handled in Texas. By the time trust was an issue we had signed and obligated. If I had it to do over I would have hired a manager to handle things I knew nothing about. There are hundreds of things that can go wrong, I owe it to myself to get the very most I can from these minerals. I probably won't realize anything from them, but my kids and g'kids surely will. And yes, if you would like the name of a qualified manager who is honest and has integrity, just send me a message in private through my profile. Have a great day,
Yours,
Wes Luke