Standards of Professional Conduct -- Landmen


The role of the landman is a mixed one. At times they are advocates for their employers, somewhat like a lawyer. They are also like Realtors, who are beholden to their client. They are not independent like an appraiser (who should be a third party independent voice), rather are working in the best interests of their client. So when the land owner is approached by a landman, remember he/she are working for a client and acting upon their best interest. They are not working for you even if they attempt to buddy up to you.

But when a landman is working for a private mineral owner, they should be an advocate for them. Sometimes that is difficult to do since they also have steady clients who might become offended if they are too aggressive for the mineral owner. This is akin to the real estate appraiser who loses a bank client because they are unhappy with them coming in "low" - even when it is the job of the appraiser to opine an independent view. The temptation is to inflate the appraisal to keep in the good graces of the bank. The downside is that if caught, you can lose your license and worse the FDIC may come after you for any loss the bank had.

The CMM is also supposed to be independent and like those named above are subject to the whim of their own conscience...sad to say. A CMM who takes the opportunity to take advantage of the mineral owner is not only violating their CMM oaths, like the landman. So one has to be leery of all "experts" (even me :) ). Do we have a dog in the fight? Most CMM's are honest that I know. Most CPL certified landmen won't lie to you, but again they may be working on behalf of the client, not you. So buyer beware. Which side of the transaction are you on? Understanding the role of each is paramount to getting good information to form you own decision.

Nevertheless, anyone who takes on the role of a consultant should try to maintain their independence, do the best they can, not trade on "inside information" and above all not deliberately mislead people about what they are signing onto, or signing away. And one thing I have often done is to invite my clients to obtain a second opinion. They might find out there is more than one way to look at it. Or, as my daddy said, "There's more than one way to skin a cat without getting hair in your teeth."