What a Landman Actually Wants From You

If a landman has called, written, or knocked on your door about leasing your minerals, it's worth understanding who they work for before the conversation goes further.

A landman (or landwoman — the title applies regardless of gender) works for, or on behalf of, an oil and gas company to acquire leases, negotiate with mineral owners, and clear title issues before a well is drilled. Landmen aren't lawyers, and they don't represent you — their job is to secure the lease on terms that are good for the company they work for.

That doesn't necessarily make them dishonest. Many landmen are professional and reasonably transparent. But don't mistake friendliness for representation of your interests. Their incentive is to lock in your minerals for the lowest bonus payment and royalty rate the market will bear, on terms favorable to the operator.

Before that conversation goes further

• Don't sign the first offer. A landman's initial number is an opening position, not a final one. There's almost always room to negotiate both the bonus and the royalty.
• Talk to your neighbors. Landmen often approach multiple owners in the same section. Knowing what others were offered gives you real leverage.
• Ask who the operator is. A quick look at the company's drilling and payment history in the area tells you a lot about what to expect after you sign.
• Never sign under time pressure. "This offer expires Friday" is a negotiating tactic, not usually a real deadline. A legitimate offer can wait a week or two for review.

What they're asking you to sign is usually an oil and gas lease — a contract granting the right to explore for and produce oil and gas from your minerals for a set period, in exchange for a one-time bonus payment and an ongoing royalty. What those two numbers should actually look like is the subject of the next article.

Have an offer like this in hand?

Start the Oil & Gas Intake — about three minutes, no payment required to begin.