I have received 2 contract proposals from Antero. The latest includes a signing bonus of $2,500 per net mineral acre and a 15% (NET) royalty on all production. The mineral rights are split among numerous (up to 64 heirs) and according to the rep, several (4 to 5) have signed and returned contracts. We have been given a deadline of July 31. At that time, Antero plans to proceed with a court order to "partition" the rights and put them up for auction. It is my understanding that they then out bid all bidders and gain ownership of the rights.
Is it possible for them to use this as a valid pressure tactic? Can the rights be partitioned without any say by the owners? The first contract was sent out June 1. The second contract was sent out July 1. How can a month deadline be acceptable to the courts as reasonable time for non-compliance??
The contract also includes a post production costs, net figures and a pooling clause - all of which I was told NOT have included in a contract.
What negotiating power does one have when they threaten to partition and do so in a weeks time??? Any and all help would be greatly appreciated.
PS I discovered that not all of my of relatives have not even been contacted or received contract proposals. How can a request for partiton be granted if a good faith attempt in notifying all parties has not been completed?!?
Ron, I think you have answered your own question. It sounds to me like it is a threat to get you to sign. There have been other recent incidents where landman working for Antero have used the same tactic. First step I would call and e-mail Antero's main office to ask them if they are condoning this action. If I didn't get a satisfactory answer I would then seek legal advice.
I have to ask, are you being informed of the intent to bring a partition suit in writing or are you being told on the phone? Some landmen will say absolutely anything on the phone, tell the most outrageous lies that they would never commit to paper. The landman may just be taking a shortcut, lazy, not wanting to do their job of making you actually want to lease and taking the easy route and trying to scare you into leasing with a you take it or we take all threat. The landman pulled out his highest card, went to last resort really quick and that will tell you it's useless to try to negotiate anything with them. You might be able to talk to their superior but I would consider talking to the landman who threatened partition a waste of time. Personally I would look for a third party lessor, even if I got no better deal, at least Antero would not profit from such tactics, the landman would not get credit for scaring you into signing a lease with poor royalty. It's the landmans job to get you to sign, if he doesn't get people to sign with his client, how long will he be employed? I would be vocal about it too. To start with you might give the landman's name here, after all, what is he going to do, threaten with a partition suit? Someone else here may be or have dealt with the same landman. It's up to you.
The landman stated in an email and on a phone message that it was going to partition. I'm not familiar with a "third party lessor". How does that work?
Sorry, I should have said third party lessee, I was going too fast.
Usually I get more than one company wanting to lease. If you have not received an offer from another company, you can try to find another lessee, shop Antero's deal around to see if anyone will beat it. There are companies and individuals who want to invest in wells as a minority interest. Usually they find you but if not, you can try to find them. You could list your minerals under "Marketplace" at the top of this page. Give a description of where your minerals are. Right now you are a needle in the haystack and nobody will see you unless they are specifically looking for your minerals. If on the other hand someone finds your minerals are available and that they can probably be leased at a reasonable price but more than Antero's offer, you may generate an offer.
Leasing to a third party lessee would be exactly the same process as leasing to Antero. Likely Antero would still be cutting the check for your royalty or possibly the buyer of the production, that part would be the same whether you leased to Antero or to a third party.
I would contact Antero and forward that e-mail along with the facts that you have related here including that you have other family member/owners who have not even been contacted yet. I would not include those family members name or address, let them do their own legwork if they don't know already.
little bit late to this conversation but in reading your posts, i'm a bit confused. As I understand Partioning, it applies to people that own the land as an undivided interest owner. If you and 63 others own the land in undivided interests and Antero owns no interest in the minerals or land you are in, how can they partition it? Partitioning is also very expensive and requires a judge to make the determination of who gets what and where.
You also state a "contract proposal" is this actually an Oil and Gas Lease or what is it? Do you know the other 63 people? Number 1 don't take less than 1/4 royalty and don't let them charge you for anything other than your share of taxes.
What county is this in?
Pooling clauses are ok, you just have to make sure you understand what the ramifications of it are. From the sound of this, I'd tell the guy to take a hike because you have better offers.
It's odd that they would jump right to "partition suit". That's usually their last ditch effort. Maybe Antero is going evil on us. They were pretty decent previously.
Their deadlines are usually just a tactic to get you to sign quickly.
The other questions and advice in this thread are spot on.
Antero can only develop the property if 100% of the mineral rights are leased up. You might have a small percentage, but it's an important percentage. If you can get together with any of the other mineral owners, do so. It's always better to negotiate together.
Document everything you do. Contact them as much as possible by email. That way when they start a partition suit you can fight it with something, if you decide to fight it.
If you want professional legal assistance with this, give my office a call.
This sounds like the workings of Blake Waldo from Antero. He's using the same tactic with our family. Are these deadlines real? My assumption is he's a freelance landman and has pressure on him to close these accounts or else. It's shady business and I'm amazed that they can get away with it. I believe it's a divide and conquer strategy. Once they have a few heirs signed, they have then lost their bargaining power. I'm amazed that the courts would partition mineral rights for these shady companies. Does anyone know the best person to contact at Antero to file a complaint?
Most likely the suit will be brought in the name of one of the lessors. The law says it must be a party who has ownership interest in the property, the law does not say who has to pay the legal costs, which would be Antero. All Antero needs is one, shouldn't be too hard to find.
Maybe Antero could buy 1 net mineral acre for $15,000 then they would have standing themselves.
Wade Meeker said:
little bit late to this conversation but in reading your posts, i'm a bit confused. As I understand Partioning, it applies to people that own the land as an undivided interest owner. If you and 63 others own the land in undivided interests and Antero owns no interest in the minerals or land you are in, how can they partition it? Partitioning is also very expensive and requires a judge to make the determination of who gets what and where.
You also state a "contract proposal" is this actually an Oil and Gas Lease or what is it? Do you know the other 63 people? Number 1 don't take less than 1/4 royalty and don't let them charge you for anything other than your share of taxes.
What county is this in?
Pooling clauses are ok, you just have to make sure you understand what the ramifications of it are. From the sound of this, I'd tell the guy to take a hike because you have better offers.
It is a "Paid Up" Oil & Gas Lease in Doddridge County. There are heirs who do not want to participate but are not selling their rights. I'm assuming they can be partitioned from those participating but how can their mineral rights be auctioned off? That's the second part of the threat. Does anyone know how this process works?
I've actually talked with a few people who have received offers from Antero similar to what r w kennedy suggested. One guy said he got $10,000 to sell them one acre, which they would return to him for nothing after the proceedings were over.
Kyle, Thanks for that tidbit. Very interesting. When you say "once acre", do you mean of surface land or mineral rights and define "proceedings". IE Use of the of the land or mineral rights for drilling? Or use of the land in legal proceedings??? I'm assuming if Antero OWNS it, they have more rights when it comes to court petitions, etc.
One acre of mineral rights. It gives them the right to institute a partition suit. The partition suit is the proceedings. Once they've finished the partition suit, regardless of the outcome, they return the one acre to the original owner.
Kyle, that is the way they try to get around not having forced pulling in Wv. I have been threatened with Partition and pulling our tract from the proposed drilling unit if we did not sign their lease. This was in the span of a month.
Some landmen and project managers are jumping right in to the partition suit discussion, making it a way to force you to sign a lease. Make sure all your correspondence is recorded, and make sure you always express a sincere desire to entry in to a lease with them. That way you have evidence to present to a judge if it comes to that.
Kyle, the thing about the partition is I am the only person in the family who they are talking to and they sent letters to 5 other heirs. The other 5 have only been contacted a couple times and not much was talked about even then.
I cannot get a response from my landman. I’ve contacted the HQ of Antero but could only leave a voice mail. They have not returned my call. Today I sent an email to the HQ. I want to know if this pressure tactic of partitioning is part of Anteros standards and procedures.
Also, I have yet to receive the Quitclaim Deed for my mother the rep offered to create and file so technically I’m not even an owner and the contracts they want me to sign are in my name. Should we go ahead and file the Quitclaim Deed on our own?
I also provided contact info for 7 heirs the landman didn’t even know about. He never even thanked me for doing his work for him. I’m not at all happy with Antero’s ethics and professionalism. If there are other companies who’d like to make an offer, please let me know.
Ron, don't expect a thank you for doing their work for them. They know they can find enough willing people to do it. The suppliers of info think it will help speed up the process. What it does in the long run, is help them get a hold of heirs and sneak and pull their tactics to get that signature a lot sooner. That's all.
I posted on other sites about the partition. I recently got "the" letter" from Antero's lawyer threatening partition. I would think it would be in theory, that Antero is trying to obtain property under false pretenses. Case in point is that Antero pursues an heir who has already signed a lease to file a partition suit to obtain property that does not belong to Antero. By Antero, who can not file a partition, fronting the money and paying for the partition, for a signed owner, would in part should be illegal. If the owner who brings the suit was subpoenaed, he under oath would implicate Antero for their part. Is there any validity to my thinking or any other comment?
DT - usually Antero's approach to partition suits is to buy an ownership interest in the minerals from one of the people that they've leased up. That gives them standing to file the suit. Once the suit is done, they give back the interest in the minerals to the person they bought it from. Sneaky, but legit.
A better argument, I think, is that minerals can't be partitioned. There are a number of people saying that WV Code 37-4-1 excludes minerals. Read it for yourself and let me know what you think.