Anyone ever been involved in a "Gold Rush" before?

texican · #1 08/12/08, 10:28 PM

I live in E Texas. The word has gotten out that there are billions of dollars of cash being made, in the new Haynesville Shale gas play. My newest 'cash cow' is working as a Landman, running deeds in half a dozen local counties county clerk offices. All of the offices are jam packed with landmen doing the same thing I'm doing... looking for land to lease. I'm actually dealing more with individual landowners, trying to figure out exactly what minerals they have, if they have them, if they're leased or unleased.

Individuals with mineral rights this winter were being offered ~200$/acre for leasing their royalties to exploration companies. Today, I heard of people getting 15K/acre for leasing... One of my clients has a friend a mile away, that has a ratty ol trailer and a beater Ford, got a bonus check of 1.8M....

It's so exciting... it must be what the gold rushes were like in the 1800's... there's standing room only in the usually dead quiet clerks offices (where deeds are stored). The older landmen are dragging people off the streets to train them. http://www.news-journal.com/news/con...lle.html?imw=Y

Each day when I get home, I have several new clients. Tonite, a guy called and said he knew he didn't own his minerals, but wanted me to find out 'who' was getting paid for them. If he owned his minerals, he'd be getting a check for ~250K... off of his 22 acres...

I know when someone on the board is mentioning oil or gas, it's usually the bad things that happen with drilling. The guy this evening said they could drill on top of his house

if he owned his minerals and could've sold them...

I'm making the best money of my life, and wonder if I'm not charging enough... people don't balk when I mention my fees... Some wheeler dealers want me to work steady with them... debating regular checks or semi independence. I know it won't last forever, but a few years would be nice... and if I could get my own 'unit' leased, and a nice override check each month, for decades..... pardon me, I'm daydreaming about that unleased mineral parcel

Those offended by greed, my apologies. I'm slacking on my slave labor projects, that pay 1/2 to 1/3 of what I'm making... and this decadent job is indoors, with a/c... I've made more in a month and a half doing this, than I did all of last year...

Common Tator · #2 08/12/08, 11:59 PM

I'm offended that I don't have some of that land to lease out!

tamsam · #3 08/13/08, 12:59 AM

I hope they don't rape the country like they are doing here. They promise the world then don't care what they tear up or run over. I have had to have my driveway worked on 4 times in the last 3 months and there is no drilling on my property. They turn around in the road across from my drive and run over the ends of the culverts blocking them up. When the cut a road up the side of a steep hill the pull trucks in and out with bulldozers whether it is dry or 3 ft of mud. I could post some pictures of them turning around here. Good luck with you dealing. Also it seems that the more holes they punch here the higher the nat gas bills go. Sam

tab · #4 08/13/08, 07:45 AM

Yup, I had the chance to move to Texas many years ago. I didn't want to then. Recent family issues finally made me say it, I wish I had moved to Texas.

I have a sil who has talked a lot about mineral rights and such in her area (Houston), sigh...now I not only have jar envy I have mineral rights envy.

Rick · #5 08/13/08, 08:17 AM

Quote:

Originally Posted by tab

Yup, I had the chance to move to Texas many years ago. I didn't want to then. Recent family issues finally made me say it, I wish I had moved to Texas.

I have a sil who has talked a lot about mineral rights and such in her area (Houston), sigh...now I not only have jar envy I have mineral rights envy.

Yup

It might be best to jar up some of that oil, if you can get access to the overflow from the barrels, and just buy cans of food at Sav-a-lot hee hee.

I like you Texican. I think many others do, as evidenced by a 2 percent reply to view ratio so far on this thread. This seems out of character for you, though. We don't own our mineral rights here, so there is always fear that our homestead will be torn up by such shenanigans before I die.

I do envy you also, but only because I left a "big time" State job 25 years into a 30 years = cushy pension situation, and while we are extremely frugal, without "health insurance" and the current world financial woes, one never knows what tomorrow will bring.

Good Luck to you...

farmmaid · #6 08/13/08, 08:31 AM

We are dealing with the same thing here...The Marcellus Shale. The offer is up to $3,000 per acre with 20% royalties. The drilling is expected to go on for 15-25 years.
They are using the new horizonial drilling, do not even need to be on your property. We are in a co-op, hired an lawyer who all he does is gas leasing, hired an environmental biologist and a finance councelor. The individual leases (specific for each member) are being drawn up and the package will go out to bid to the companies the end of September. The Marcellus Shale is suppost to be the richest in the country/maybe the world. Once the bidding starts, we have 41,000 in the co-op, we expect the offers to JUMP!
TOP priority is protecting the environment, the chosen company will have to agree to OUR requirements and the list is long!

farmmaid · #7 08/13/08, 08:50 AM

Sorry.....41,000 acres, 1,000 members.

tab · #8 08/13/08, 08:53 AM

Unless ALL of us are willing to stop driving and using about a kazillion other products, we all use petroleum. That means it is going to be drilled and the other minerals are going to be mined. The technology is out there and can be utilized to do so without complete destruction. Unless a person is NOT using any of the products mined/ drilled I think the we need to be careful of being critical. You know the syndrome, not in my backyard? I also know from personal experience, you own property in name only. A utility company can slap lines on your property if the "need" arises or any any other number of such things. If one can have some say in HOW things are done and be duly compensated, great.

fm, where in NY is this going on? I have only read a tiny little news blurb about it. It is my understanding after doing some research, that this shale may extend through a large section of NY. How powerful is your co-op? Waht companies are interested in the drilling?

Rocky Fields · #9 08/13/08, 05:05 PM

Hey.

Greedy men often have the rug pulled out from under them because they can't see it coming...

Of special concern in the relatively arid western United States is the large amount of water required for oil shale processing; currently, oil shale extraction and processing require several barrels of water for each barrel of oil produced, though some of the water can be recycled.

Major oil companies such as Shell have been buying up water rights for some time. Looks like some of our western homesteaders may be faced with even greater water shortages in the near future...

RF

farmmaid · #10 08/13/08, 05:22 PM

Good for you for not being critical ! Think of all the plastic (oil and gas base) used in hospitals!!
The Marcellus is only part of what the companies are after. We have the Utica Ridge, Black River, Trenton. The Marcellus runs fron Syracuse,NY down through parts of Pa, east Ohio and into parts of West Virginia.
The coalition that we belong to are doing everything right. We have hired the BEST! This has been developing since the first of the year. Landmen went around and offered people $50 per acre, some took it. The "word" had not gotten out yet about the wealth here. In the past 2 months we have had landmen knock on our door and offered $50, then $200, then $750...the last offer was $2750 per acre. No thank you, we want the DETAILED general lease that the coalition is drawing up PLUS our individual lease tailored to our property and our wishes. We are also insisting for a non-profit group to monitor the drilling and wells once they start pumping. This point is a deal breaker, if a company does not agree, we will not do business with that company. So far there are 17 companies in the area. Three have been in touch with our lawyer to ask what it would take to make it a "done deal" for our 41,000 acres total. We (the coalition) can be very patient...expect the price per acre to skyrocket and hope for 20%-25% royalities. The royalities are the important part of the deal!.

texican · #11 08/13/08, 07:30 PM

Quote:

Originally Posted by Common Tator

I'm offended that I don't have some of that land to lease out!

Well, you never can tell, you might... The mineral estate is separate from the land, and is sold, traded, and swapped all the time... People from all over the US and World have interests here.

Rick... I'm sort of an opportunistic person. If I see an old barn standing in a pasture, I'll ask the owner if he wants it? or if he wants it torn down? and if not now, later. I've got scrounging feelers out everywhere for everything imaginable. Every now and then it pays off. Back in June I got ~1500$ worth of cages, waterers, and feeders. Last Sunday I got a truck load of canning jars.

I dislike 'regular work'. I punched a time clock for three months right after high school, and realized normal wasn't in my blood. I dislike working for others, but my good looks don't pay the electric or feed bills. I take in work whenever its available. My home, land, everything is paid for, so all I have is basic living expenses. I have 4 or 5 construction jobs that I can do right now, but getting 20$ on most is iffy, a few I can squeeze out 25. And this includes dirty smelly dangerous work. What I'm doing now pays twice that, and it's nice, clean, civilized, and air conditioned. Most of my work projects will pay well, and I can go ~six months between projects without feeling any discomfort. A month of this work can satisfy my financial requirements for a year. I'm feeding on the low end of the gold rush... one of my cousins fishing buddies works for Chesapeake... he has given him enough work, and promises of work, that he's been able to start up his own heavy equipment construction company, with work scheduled for years into the future.

I'm performing a service, in the mid-range of prices. There's no one else in this county that will take a job lasting a few hours...so I figure I'm helping myself and helping my client too by doing their work and giving them a fair price.

On the local radio today, the lease price in Louisiana has reached 27K/acre... the City of Shreveport has ~4k acres they've got to lease....

IMHO, anyone not leasing their land is not thinking this through. If you don't lease and your neighbor does, they can legally take your gas and legally not have to pay you a cent. You can easily negotiate non-occupancy clauses. With such a clause, what are the risks? Unless a person owns thousands of acres, you can't stop the drilling, so if you have merchantable gas or oil, it will be drilled.

I have not taken any vows of poverty. I've lived below the official poverty line my entire life, sometimes at 1/2 or 1/3. Some years a tenth!!! I much prefer having a positive net worth, than the bad old days when I didn't own the ground my truck parked on each night.

Deb862 · #12 08/13/08, 07:33 PM

Unfortunately for us, the Marcellus shale thing here in NY that farmmaid is talking about is bad news for us for sure. We have been trying to buy our new homestead in central NY for over a year and a half and just hadn't found the right property and now this. I know many people are going to make a lot of money and I guess that's a good thing but we have just about written off ever being able to buy in almost ALL of lower NYS at this point (if I sound sad and depressed, I am....).

I have had CNY realtors tell me that most people don't even care about the environmental stuff on their properties because they have said they'll just take the money they get and buy a new property somewhere else. It's sad that all these people see is the money.

I sincerely hope that the environment of this place is not ruined, and it is awesome that the coalition is holding the gas companies to environmental agreements, but I've also heard it is difficult for them to guarantee with the horizontal drilling in the shale that they won't permanently damage people's water wells. I've also read that the DEC has said that the water slag with chemicals that's left over is some of the most toxic stuff around. I really hope it works out okay in the end, as CNY is one of the most beautiful places.... One of these days we will stop raping the Earth of every resource we can find.

**clovis** · #13 08/13/08, 08:22 PM

Now that is interesting!!!!!!

I have been following the oil boom with fascination. It is cool to see folks hit the big time after having a hard time making ends meet. Just heard about a guy in North Dakota (?) that hit huge money after struggling all of his life, and is getting big royalty checks. The first payment was $1,250,000.

If you can raise your rates, I would do so. Got to make as much money as possible when you can, but still give a fair deal.

A lesson I learned long ago in sales is called "penny up". When quoting screen printed shirts, I started adding 3 cents, 5 cents, 10 cents, etc. to what I would have sold for.

So a $6 shirt went to $6.10, or even $6.18 if I could get it. I was still cheaper and gave a far better product than anyone else in the market. You wouldn't think my cash flow would have improved over pennies a shirt, but it was the turning point in how much money I made. It started adding the extra profit that I needed to make my business succeed.

So, if you can get another $10 per deal, and if do 10 deals a week, that is an extra $5200 a year.

Are you also charging what the others charge? I know some deed companies around here charge a $18 document transfer fee for UPS delivery, even though they hand carry it themselves about 4 blocks to the title company. Another $18 in their pocket for doing nothing next to nothing. Just think...they do tens of these a day. This fee is charged when doing a home loan. When you are doing a $200,000 motgage, who is going to complain about an $18 fee (other than me)????

Do you offer upgraded services, like rush fees? "I will move your order to the top of the stack and do it today, for $XXXX ????

Those fees, if being charged by your competitors, could be a serious profit center for you.

Way to go man!!!!

Clove

gone-a-milkin · #14 08/13/08, 08:46 PM

Ah....GOLD FEVER! It makes people do crazy things, lose their minds even.

Cindy in PA · #15 08/14/08, 07:02 AM

Wow, 17 companies???? Send some down to Tioga County, PA! We have 11.23 acres in southern Tioga and everyone around us have already leased, back in 2006 when prices were under $100/acre. Competition here is nonexistent, as one company has much of the area. They are drilling in my area and we are still looking at leasing. Have talked to them and another big company that has decided to quit leasing for now, but cannot seem to talk to anyone that knows anything! We have been contacted by mail by 3 landmen representing the same company & by the time we get the letter, that person is no longer working for them. Seems things are quiet until they figure out the water issues in September. I do worry about the water & influx of people, but I don't live there, so I could just quit visiting! My DH has been going there since 1955 and the place hasn't changed much since then. Can't imagine what it will be like if they drill a lot of gas wells, as iti s the most beautiful place on earth. We were up a few weeks ago & went gas well hunting near our property. They are really moving fast right around there. Landman get a bad rap, but the guy I dealt with (unfortunately with the company that has stopped) was very helpful & straightforward. They were offering less than the other company, but their lease was much better. I just want to protect the land for my sons. Hope everyone gets what they want from this deal and Texican you go for it!

hillsidedigger · #16 08/14/08, 07:09 AM

My brother is a 'land-man' for a natural gas drilling company in and around Rifle, Colorado.

He has been doing that sort of work off and on for 28 years and seems to be capable of the task. From what he says many of the folks that are attempting that work are newbies and cause more problems than solutions.

Wags · #17 08/14/08, 12:50 PM

Sounds like the job was made for you Texican. I don't think you are being greedy by supplying a service that is needed. So what if you are making more in a month right now than you do in a year - that still doesn't mean you are being greedy. When the rush is over (or you get tired of being a landsman) you will have a cushion that will allow for more improvements on your 'stead and/or a nice sized emergency fund.

texican · #18 08/14/08, 11:23 PM

Quote:

Originally Posted by Deb862

Unfortunately for us, the Marcellus shale thing here in NY that farmmaid is talking about is bad news for us for sure. We have been trying to buy our new homestead in central NY for over a year and a half and just hadn't found the right property and now this. I know many people are going to make a lot of money and I guess that's a good thing but we have just about written off ever being able to buy in almost ALL of lower NYS at this point (if I sound sad and depressed, I am....).

I have had CNY realtors tell me that most people don't even care about the environmental stuff on their properties because they have said they'll just take the money they get and buy a new property somewhere else. It's sad that all these people see is the money.

I sincerely hope that the environment of this place is not ruined, and it is awesome that the coalition is holding the gas companies to environmental agreements, but I've also heard it is difficult for them to guarantee with the horizontal drilling in the shale that they won't permanently damage people's water wells. I've also read that the DEC has said that the water slag with chemicals that's left over is some of the most toxic stuff around. I really hope it works out okay in the end, as CNY is one of the most beautiful places.... One of these days we will stop raping the Earth of every resource we can find.

Buying land with minerals is going to be very difficult, in any area of the country that has oil/gas potential.... because the subsurface estate is going to be many multiples of the surface estate.

I have zero knowledge of other states environmental laws. Here in Texas, they seal off the near surface zones, so that there's no chance of contamination of the water table. If they didn't, there'd be absolutely no drinkable water in Tx or Louisiana. The drilling fluids are all captured and removed from the drillsite, and disposed of.

I agree with you with the raping of the earth thing. I'll choose the earth every time. But, remember, when we run out of petroleum (the stuff that makes life possible for 99% of humanity), there'll be a Great Thinning of the population, wherein said 99% of the population will cease to exist. Hopefully, the oil will outlast our days... if not, prepare for the gnashing of teeth....

Clovis... I try and work clients as they come in... the bottleneck in the enterprise is the county clerks offices are closed in the evenings and on weekends. This is something new for me... I'm used to working 12 hours or more, and that's 'real work'... this is more like standing around in an air conditioned office reading books...

So far, I've been working for the "white hats"... the landowners, instead of the evil ol' oil companies.

gone-a-milkin.... it indeed makes people do crazy things... more contacts were waiting on the phone and email this evening... people that know they don't have any minerals, but would like someone else to tell them that they don't!

I know this cow will go dry sooner or later...

Rocky Fields · #19 08/15/08, 06:41 AM

Texican,

Quote: "...But, remember, when we run out of petroleum (the stuff that makes life possible for 99% of humanity), there'll be a Great Thinning of the population, wherein said 99% of the population will cease to exist..."

The oil companies are the new carpetbaggers. They've managed to juice us to the tune of record profits and the oil shale will give them the opportunity to keep milking the cash cow (the consumer). This play coupled with corrupt politicians will give them the chance to beat down what we really need...more alternative energy...their nemisis.

Life existed before oil, life will exist after it's gone.

RF

stanb999 · #20 08/15/08, 07:11 AM

Quote:

Originally Posted by Deb862

Unfortunately for us, the Marcellus shale thing here in NY that farmmaid is talking about is bad news for us for sure. We have been trying to buy our new homestead in central NY for over a year and a half and just hadn't found the right property and now this. I know many people are going to make a lot of money and I guess that's a good thing but we have just about written off ever being able to buy in almost ALL of lower NYS at this point (if I sound sad and depressed, I am....).

I have had CNY realtors tell me that most people don't even care about the environmental stuff on their properties because they have said they'll just take the money they get and buy a new property somewhere else. It's sad that all these people see is the money.

I sincerely hope that the environment of this place is not ruined, and it is awesome that the coalition is holding the gas companies to environmental agreements, but I've also heard it is difficult for them to guarantee with the horizontal drilling in the shale that they won't permanently damage people's water wells. I've also read that the DEC has said that the water slag with chemicals that's left over is some of the most toxic stuff around. I really hope it works out okay in the end, as CNY is one of the most beautiful places.... One of these days we will stop raping the Earth of every resource we can find.

We were almost in your predicament. But as luck would have it we are in one of the thickest portions of the Shale.

I'd say you can still by land with rights and unleased if you get to it and jump on a deal. For instance their is a 18 acre parcel right down the road from me still selling at pre gas prices.

So don't listen to the realtors, look and you may just find what you want.