Banks Now Getting into Gas Advice Business
Some banks are getting into the business of advising their customers, like farmers, on what kind of gas lease to sign when energy companies come knocking. The wealth management divisions of banks are branching out into what has been traditionally the turf of lawyers. One such bank is S&T Bancorp, based in Indiana, PA.
Ultimately, S&T teamed up with Heritage Trust Co., an Oklahoma firm that advises clients on oil and gas issues. Heritage crunches the numbers, while S&T holds the hands of its customers.
S&T charges a fee equal to 6% of the amount clients receive for leasing mineral rights to gas companies. Such leases can include payment for letting companies store gas on the property or permitting a pipeline to run through it.
"There is a lot of stuff you can get paid for if you ask, but a lot of people don’t know what to ask," said [Wes] Turiano, who now runs S&T’s small mineral-management business.
S&T also charges 6% for other services, like verifying the customer is receiving the correct amount of royalty payments when the gas starts coming out of the ground. S&T shares the fee with Heritage.
S&T launched the service in April and has signed up roughly 50 customers so far, according to company executives. The company pitched the service this summer at county fairs, and it meets with groups of landowners who have joined to lease large blocks of land.*
*Wall Street Journal (Oct 12, 2011) Farming Out the Details on Gas Deals