What Does a Landman Do?
Featured in Landman, July/August 2019 / By Jay W. Beavers III, AAPL President and Beavers Energy, LP. President
"What does a landman do?" and "What are the prerequisites for becoming a landman?" are two questions I answer on a daily basis.
Another common question: "Does a landman need to be a good negotiator?"
Honestly, I do not have a short answer for any of these questions.
Ten undergraduate land management programs and three graduate programs accredited by the AAPL. The undergraduate programs are designed to provide students with basic knowledge of landwork, geology, engineering, accounting, economics and business management. The graduate programs are great for landmen who desire to continue their education. Earning a diploma in one of these programs might help you get the job you are pursuing. Some employers require their landmen to have a land management degree. Even though these are highly recommended, a college degree in land management is not necessarily a requirement for becoming a landman.
Perhaps the greatest land negotiation was performed by Thomas Jefferson, James Madison, James Monroe and Robert Livingston in 1803. They negotiated the purchase of approximately 530 million (approximately 3 cents per acre) while Jefferson was president of the United States. This famous transaction is known as the Louisiana Purchase. As president, Jefferson wore many hats. I don't believe that being president of the United States is a prerequisite for being a landman, but it sure helped Thomas Jefferson.
My father was a landman his entire career. Working as a landman for Mr. H.L. Hunt back in the day had to be one of the most interesting jobs in the world. My father would always answer the "What does a landman do?' question with another question: "What do you want done?"
Lamar Hunt founded the American Football League and the Dallas Texans football club in 1959. My father and Mack Rankin were land managers for Hunt Oil Co. at the time, but they spent their weekend traveling all over the country scouting college football players, talking to their coaches and parents, drafting the players and getting them to sign contracts to play football for the Dallas Texans and, later, the Kansas City Chiefs. Is scouting college football players in a landman's job description? It was for two landmen.
My grandfather ("Daddy Joim") graduated from Bowie Business College around 1920. It was a one-room college on the second floor of the funeral home in Bowie, Texas. After graduation, he worked as a bank examiner and as loan officer at two different banks prior to opening Beavers Motor Co. in 1935 in Gladewater, Texas. Daddy Jim bought dozens of oil and gas leases in the East Texas oil field, most of which are still held by production.
One day, a gentleman walked into his dealership with no cash, no credit and no trade-in vehicle. The gentleman wanted to buy a 1967 Plymouth Belvedere that Daddy Jim had taken in as a trade-in the week before. Daddy Jim had $600 in the Belvedere. The man left the dealership with the $600 vehicle while Daddy Jim drove to the county clerk's office to file a warranty deed on 20 acres of land that the car buyer had owned. That transaction amounted to $30 per acre.
Six months later, Daddy Jim sold the back 10 acres for $1,000 ($100 per acre). Of course, as any good landman would do, he reserved all of the mineral interest. The following year, he sold the front 10 acres for $2,000 ($200 per acre) and reserved all of the minerals. Next, he signed a five-year oil and gas lease with Exxon for $1,000 ($50 per acre). When the lease expired, Exxon renewed it for an additional three years for $2,000 ($100 per acre).
If you are keeping score, that $600 Belvedere generated $6,000 for Daddy Jim in less than 10 years. Oh, did I mention that Exxon drilled a deep gas well and placed his 20-acre tract in the unit? Yes, we still receive royalty checks every month. Should being a bank examiner, loan officer or car dealer be a prerequisite for being a landman?
Van Nichols was two years behind me in high school. My father offered him a job as a landman when he graduated from Texas A&M with a degree in agronomy. Before accepting the offer, Van called me and asked me what a landman does. My answer: "Whatever Mr. Beavers tells you to do."
Dale Douglas was raised in Farmersville, Texas, and graduated from Texas A&M with an agriculture degree. Hunt Oil Co. hired Dale and sent him to Tyler, Texas. Dale was examining a lease ownership map during his first day on Hunt's payroll and made the comment, "I'm not familiar with this HBP company, but they own a lot of leases." Dale continues to have a successful career as a landman even though he started out with zero knowledge of the oil and gas industry.
Bud Scarborough was the East Texas district land manager for Hunt Oil Co. in Tyler, Texas. Mr. Scarborough had three sons — Stuart, Lee and Brian. Being a former student at Texas A&M University, he made it clear to his sons that he would pay for their college education as long as they attended Texas A&M. All three sons are proud Aggies and have had successful careers as petroleum landman. Should a degree from Texas A&M be a prerequisite for becoming a landman? It was for three brothers.
While attending Texas Tech University in Lubbock, Texas, David Arrington helped put himself through college with a carpet recycling business. At the end of each semester, David would raid the dumpsters on campus and pull out all of the carpet squares. He would take the beer-stained carpet to his house for a good cleaning. At the beginning of the semester, he would load all of the carpet on his trailer and re-sell the clean carpet to the new students at the dormitories. Should being an entrepreneur be a prerequisite for becoming a landman?
After graduating from Texas A&M with a degree in environmental design, I was unable to get a job as an architect. Placid Oil Co. hired me to work as an offshore roustabout in the Gulf of Mexico. After seven months of scrubbing the deck, sandblasting, painting, unloading supply boats, replacing charts, changing chokes and testing wells, I was offered a junior landman position in Jackson, Mississippi. Placid did not send me to Jackson because of my knowledge of landwork. Placid offered me the landman opportunity because of my work ethic. Perhaps working as an offshore roustabout should be a prerequisite for being a landman.
During my career, I have been blessed with opportunities to conduct lease checks; run title; buy oil and gas leases; prepare runsheets; perform title curative and due diligence; run field crews; testify as an expert witness; negotiate well trades; negotiate purchase and sale agreements, joint operating agreements, platform sharing agreements and surface use agreements; and buy and sell minerals, royalty interests, overriding royalty interests and working interests. I worked as an offshore landman for 12 years and worked as a hard mineral landman (lignite and uranium) for serval years. My career has been anything but specialized.
What do you want done?