Have you ever heard of a landman? The answer probably depends on where you live or what profession you’re in. If you work in a field related to the oil and gas industry or live in a region of the United States where oil and gas are commonly found, chances are you’re familiar with landmen.
Many people have never heard of a landman, much less understand what they do. Some also don't know that land for sale could include the mineral rights, or maybe include only the surface rights. It’s easy to hear the term “landman” and assume it’s a broad way of describing a man with skills pertaining to land. Although it’s undoubtedly used in many different ways, the landman plays an important role in the oil and gas industry and was instrumental in helping the United States economy progress and develop as early as the middle of the 19th century. Check out this CourthouseDirect.com infographic that vividly tells the story of the evolution of the American Landman.
Put simply, landmen, also called petroleum landmen, are middlemen between mineral companies and landowners. A company can’t explore and drill for minerals if they don’t own the mineral rights to that particular property. Take a look at our blog post to find out more about mineral rights. It’s worth noting that the “man” in landman does not refer to gender, as landmen are male and female. In essence, a landman is a representative of an oil and gas company whose job is to make it possible (and legal) to explore, drill, and secure valuable minerals contained in the ground. This may seem simple and straightforward, but depending on the circumstances surrounding each case, it can involve a lot of complicated, challenging work.
There are a variety of skills required to be a successful landman. The more obvious task assigned to them is to secure the mineral rights of the land they’re interested in drilling on. A company can’t drill without permission and wouldn’t do them much good if they don’t own the minerals they discover. This can include in-depth research and demand sharp interpersonal techniques.
There can be anywhere from one landowner to hundreds of landowners that own the mineral rights to a piece of land. Sometimes the rights have been broken up into small percentages, each portion belonging to a different owner. A landman should have extensive knowledge when it comes to land ownership. In order to make drilling possible, the landman should have done his homework and be crystal clear on who owns the mineral rights to the land, and what percentage they own.
Once he’s positive who owns the mineral rights, it’s the landman’s responsibility to negotiate the rights to the land. This is where sharp communication and negotiation techniques come in handy. Obviously, the goal of the company should be to make their intentions known in an honest and transparent way. As a result, the landowner knows you believe their land is valuable and you’d like to make money from selling the existing minerals. At times it’s been recommended that a future landman obtain an undergraduate degree in sociology or psychology in preparation for this aspect of his job.
Take a look at these techniques the AAPL recommends.
- Speak their language
- Open with an offer
- Know your target price and limits
- Don’t anchor low
- Don’t be adversarial
- Learn to love silence
- Be prepared with a counteroffer
- Never rush it
Individuals make impressions and judgments about people very quickly, and with very minimal information. And once those judgments are made, they tend to be hard to undo.Dr. Vivian Zayas of Cornell University
Often the landman is the first person a landowner will interact with in the process. How the landowner reacts to the landman can go a long way in determining what the end result will be. In other words, how willing the landowner will be to sell and negotiate the mineral rights he owns. The drilling company may offer to buy the land outright or lease it. These negotiations can include elements such as drilling depth clauses, percentage of royalty, payment per rod, and potential bonuses.
Here are a few more tasks landmen may be responsible for completing. Much of it has to do with paperwork. Fortunately, technology allows landmen to produce efficient results more accurately.
- Perform audits and record keeping
- Prepare lease agreements
- Assist land staffs
- Document and track rental receipts
- Evaluate title documents
- Provide documentation of property history
- Communicate current land management activities performed
- Coordinate and assign activities to different land departments
- Cure title defects
- Manage title attorneys
- Act as a unifier of the overall process
- Ensure compliance with governmental regulations
- Obtain agreements to secure financing for exploration and production
- Participate in regulatory hearings
A less talked about industry that landmen are involved in is the wind industry. Proper wind development requires tasks similar to the oil and gas industries such as determining ownership, securing appropriate sites, and negotiating surface and wind right agreements. If you're interested in wind rights check out our blog discussing what type of land is best for wind farming.
A landman should be extremely well-prepared to answer a number of questions that could be important to landowners and need to be addressed before they’re willing to consider selling or leasing.
- What specific rights will I have and what rights will you have?
- What is the overall process going to look like?
- How long will it take before I start receiving royalties?
- How did you come up with the offer you’ve made?
- Do I contact you if I have questions?
- What all responsibilities does the company have?
- How do I know you’re accurately reporting the quantity of minerals you’re compensating me for?
If you’re interested in discovering whether or not you may have oil on your property, read our piece on how to find out if you have oil on your land.
This video by the AAPL describes what landmen really do.
Although the duties of landmen can vary drastically depending on this situation, there are 2 basic types of landmen. Many landmen have made use of valuable resources to aid their careers like The American Association of Professional Landmen. They offer a great landman survival guide on their website that can be extremely helpful if you're new to the industry trying to figure out the best approach, or a seasoned veteran looking for ways to improve. When searching for a landman, people often search for an AAPL landman that’s part of an association they’re familiar with and confident in.
An in-house or a company landman works directly for the oil and gas company as a paid employee, usually in their land department. Unlike field landmen, they’re likely to be involved in trades with other operators, negotiating trade participations, and joint operating agreements. This job typically requires a 4-year degree in Petroleum Land Management or Energy Management.
A field landman is an independent contractor that doesn’t work directly for the oil and gas company but works with in-house landmen that do. They are hired by a broker and represent the landowner to the oil company, and the oil company to the landowner. This job generally does not require a 4-year degree.
Landman jobs and jobs in general throughout the oil industry tend to fluctuate depending on drilling activity. Even when there are landman jobs it’s not always easy to get your foot in the door or to progress from a field landman to an in-house landman. Fortunately, according to Jeff Bush, president of oil and gas recruiting firm CSI Recruiting, jobs in geology, finance and accounting, engineering, and fieldwork are coming back of lately. If you're in the industry or just looking for minerals, take a look at our land for sale with mineral rights.
In actuality, landmen are the catalysts that make the oil and gas industry happen. They’re there at the beginning of the process, and many of them are there until the end, executing the whole way through. Since the first oil well was drilled in 1859 to the current technologically advanced mineral acquisition strategies of today, landmen have been there playing key roles. Since oil has played such a powerful part in American history, it seems appropriate to say the landman has been an extremely meaningful piece of American history.