Prior to entering the oil & gas industry, if you would have asked me what a Landman was I would have thought that it was someone working on a farm, tending to his land to support either himself, his family, or his business. Well, I am sure that the name “Landman” can be used in different ways. However, I want to share what a Landman is when it comes to the oil & gas industry. After all…he/she is kind of important.
What Does a Landman Do?
The first step to drilling for oil or gas is to first find the land they are going to drill on. Once they find that land, the company must own the rights to the oil that the land contains before they can begin drilling. So, someone has to act as the liaison between the companies wanting to drill, and the people who own the land of interest. That is where the Landman comes in! The Landman will act as the middle man between the exploration companies and the landowners. According to Wikipedia some of their duties include:
- Negotiating for the acquisition or divestiture of mineral rights
- Negotiating business agreements that provide for the exploration and/or development of minerals
- Determining ownership in minerals through the research of public and private records
- Reviewing the status of title, curing title defects and otherwise reducing title risk associated with ownership in minerals
- Managing rights and/or obligations derived from ownership of interests in minerals
- Unitizing or pooling of interests in minerals
There are two different types of landsmen: those who work for the exploration companies and those who are independent contractors.
Independent Contractors
Landmen who are independent contractors are also referred to as field landmen. Field landmen are hired by brokers to work on their clients’ projects. This is the most common type. They determine who owns the land, identify the mineral rights, and negotiate subjects such as bonus per mineral acre, royalty percentage, plow depth clauses, and payment per rod. Now I thought this was interesting…mineral rights and land ownership can belong to two different people. Personally, I thought this was strange and apparently makes things more complicated. If this occurs, now two negotiations would have to occur. One with the land owner, and the other with the owner of the mineral rights.
Company Employed
Landmen who are employed with the exploration company interested in drilling and acquiring rights are called Company Landmen. They handle things like managing the equipment malfunctions, lease payments, drilling activities, preparing contracts, and researching property records.
To say that Landmen are important is an understatement. They are the ones that are a part of the very beginnings of retrieving oil and gas.
We may not have landmen at CROFT, but we are here from the beginning steps of retrieving oil and gas all the way to the sales line. CROFT Consulting’s Oil & Gas Field Operations offer a wide variety of services, designed to help the client reach their financial goals. From project management to site layout assessment; CROFT consultants will be with you every step of the way. CROFT provides consultations, well site analysis, recommended strategy, and a plan of action for execution.
https://en.wikipedia.org/wiki/Landman_(oil_worker)
http://info.courthousedirect.com/blog/bid/209605/What-is-a-Landman-Anyway
