|
|
Background
Mid-America's team has over 20 years of experience negotiating,
analyzing and administering mineral and surface use leases. We
are also experts in the lease renegotiations, subleases, property
acquisitions & sales, and option agreements. We have represented
both lessors (land-owners) and lessees (producers). Geographically,
our experience stretches from California to New Hampshire and
16 states in between.
Mr. Nowobilski's
past experience includes six years as President of Phoenix Land
Company, a subsidiary of Zeigler Coal Holding Company, a publicly
traded $900 million revenue company. In this position he was responsible
for managing a real estate portfolio consisting of 2.5 billion
tons of mineral reserves, 100,000 acres of surface land and 70,000
acres of oil & gas properties, and an annual budget of $30
to $40 million. Management of this real estate portfolio included
the negotiation and administration of thousands of mineral leases
and surface use leases.
The firm's
president has authored two published articles that discuss several
of the financial and non-financial aspects of mineral leases:
Article describes
key financial aspects of long-term mineral leases. The determination
of a fair earned royalty rate and annual minimum royalties is
discussed.
Article discusses
non-financial terms such as the producer's (lessee's) rights and
obligations, default provisions and lease term.
top
Typical
Assignments
Mid-America has been retained by both lessors and lessees. We
have been retained to perform in depth lease assessments, including
both financial and non-financial lease terms, and to negotiate
new leases, lease amendments, and subleases. Typical assignments
include:
-
Lease
Assessment
-
Objective is to determine if the financial and non-financial
leases terms are fair and equitable.
-
Financial Review assesses the earned royalty rate(s) and
the annual minimum royalty, or rents, to determine if they
represent market rates. Typically we'll utilize discounted
cash flow analysis to quantify the long-term impact of the
specific lease's royalty rate versus a market royalty rate.
-
Non-Financial Review includes a review of all other lease
terms. The major terms would include lessor's retained rights,
lessee's rights and obligations, liability indemnification,
reclamation requirements, and the default, termination and
sublease provisions.
-
Lease Negotiation
-
Objective
is to negotiate a new mineral lease that sets forth precise
lease terms that are fair and equitable to both parties.
We believe this is essential as mineral leases are typically
long-term contracts, often spanning decades. As such they
need to address the potential for the long-term changes
in royalty rates, regulatory obligations, change in ownership
and the financial fortunes of the parties.
-
A comprehensive list of desired lease terms is developed
and, following review by our client, we negotiate on behalf
of the client.
-
Lease
Renegotiation
-
The typical goal of our client is to revise the lease's
below market royalty rate to a market royalty rate.
-
A Lease Assessment (described above) is used to not only
quantify any deficiency (or excess) in the royalty rate,
but to identify deficiencies in other lease terms and to
discover any leverage the contract may have afforded our
client.
-
A comprehensive list of desired lease term amendments is
prepared and reviewed with our client. With their approval
we attempt to negotiate the lease amendments.
-
Subleases
-
A sublease permits the lessee (producer) to permit a different
producer to conduct operations upon the property.
-
We
assist with the establishment of lease terms and performance
criteria in order to protect our client.
top
Clients
Mid-America's clients include property owners, construction aggregate
companies, law firms and foundations. A representative list of
recent clients includes:
|
| |
P.O. Box 908
O'Fallon, IL 62269
(618) 624-0155
|
|
