The mad dash to snatch up mineral rights and strike a deal with an oil and gas company comes with a new and disturbing pitfall. "A mineral deed was being sent out by one company and was actually a power of attorney," says Louisiana Attorney General, Buddy Caldwell. A mineral and royalty contract so lopsided in favor of the Texas oil company, Caldwell is personally sending out a warning to "read the fine print".
"This is a very serious issue," says Cadlwell. The Texas oil company remains unnamed at this point becuase it's an ongoing investigation.
Because this contract gives power of attorney, the AG's Office says it allows the oil company to put the landowner in a nursing home and collect their payments, giving way too much power to the oil company. Even so, if signed, this contract is legally binding. Unlike a normal fraud case, if you've read it and signed it, and sent it back and cashed the draft, you got a problem," says Cadlwell. A problem he believes can be solve with a proactive approach.
I've gone straight to the oil marketers and asked for their cooperation and have gotten it. "They're helping us monitor them because after all the oil companies that are legitimate they want us to catch the bad ones".
One way to avoid becoming a victim of a bad contract is to have an attorney look it over before you sign it.