Beware The Allure Of Shale ‘Mailbox Money’

Originally published at EagleFordForum and GoHaynesvilleShale
Attorney Spotlight: Ben Elmore
By K. Daniel Glover

If a land man calls with an offer of “mailbox money” for the mineral rights on your property, read closely before signing on the dotted line. If you don’t, oil and gas lawyer Ben Elmore said the words above it may come back to haunt you.

Mailbox money is a slang term of the shale era. “You wake up one day and you get a call from a land man” promising $1,000 an acre and a 20 percent royalty on oil and gas production from your property, said Elmore, an attorney in the industry for 13 years who now works at WattBeckworth in Houston. “You don’t have to do anything if you don’t want to, and every month a check will come.”

A few years ago in Texas, he said, the average mineral owner was a 65-year-old widow – the kind of people who could use the money. But the fine print they didn’t read in their royalty deals back then may be making them miserable now.

“It’s a bad attitude to have,” Elmore said of people who sign for quick cash. “Mineral owners need to educate themselves about what they own. They need to educate themselves about the industry and how it works.”

Elmore, whose clients include both landowners and oil and gas companies, said understanding the law in Texas before signing is even more important now because the government is making it harder to bring lawsuits after the fact.

“They are streamlining the litigation process in the oil and gas context much like they have in the tort context,” he said, and mineral owners are feeling the brunt of it.

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