Archive for March, 2011

You know the drill, so to speak.  Jed’s out hunting, misses his shot at some wild animal and the next thing you know, he’s moved to Beverly Hills (home of Henry Waxman).  For the purposes of television, it doesn’t really matter how Jed ended up driving down Rodeo Drive with Granny, Ellie May, Jethro and Duke in the 1921 Oldsmobile.  But if you’re curious as to how Jed got there, he went through the same process that countless other land owners did when crude oil was discovered on their property.

Once word got out that there was oil on Jed’s property, he was approached by a landman.  George W. Bush, the 43rd President of the United States, got his start as a landman.  So did T. Boone Pickens.  It’s an unusual job, requiring persuasive skills combined with a thorough understanding of both business and property law.

Once Jed and the oil company landman reached a deal, Jed was likely given a large lump sum of cash up front for rights to drill on the property.  He was also given cash for the “surface rights”, which allowed the drilling company to be on his property at all, even if there wasn’t oil down below.  So, there is an element of financial risk involved with this, since the oil company may discover that there is very little oil on Jed’s land.  They would discover this after the cash payment had been made.  In earlier times, they would just drill a well and see what happened, but now they use advanced methods to determine the size and quality of the underground petroleum reserves.

By the time drilling had started, Jed & Family had removed themselves to Beverly Hills, but the most important part for him was about to arrive.  As part of his deal with the landman and the oil company, Jed also received a royalty payment for every barrel of oil removed from his property.  Typically, this royalty would be 1/8 of the value of the oil.  He would also receive continuing payments for the surface rights.  Those royalties would continue for the life of the well, which is why Mr. Drysdale was so interested in Jed.

Of course, the Beverly Hillbillies was set in the 1960’s, an era long before the stringent influence of bureaucracies.  Back then, the permitting process was relatively easy.  Now, any number of different government agencies could and would halt any petroleum development for a multitude of reasons.  Today’s likely scenario would have Jed still living in his shack in the mountains.  Granny was on Medicaid when she died.  Ellie Mae got a job down at the local Huddle House.  Cousin Jethro’s doing 7 – 10 in the state penitentiary for manufacture and distribution of methamphetamine.  Jed’s not bitter about it, because Jed’s just not that sort of guy, but in the cool of the evening he sits in his rocker on the front porch and talks with friends.  He takes a draw of clear liquid from a jelly jar and shakes his head.  “The oil’s still out there, waiting to be drawn out and used.  It just don’t make no sense“.

And it doesn’t.

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