[Editor's note: This story has been updated from a previous version posted at 4:30 a.m. CT on October 7.]
Historically, there has been a disconnect between energy companies and landowners regarding the valuation of land resources. On one hand, landowners do not know what their mineral, solar, wind, and other property rights are worth. They do not have access to the resources required to value their asset, so they are not willing to sell or lease. On the other hand, buyers spend too much time and money to discover a deal, value it, negotiate, and close.
LandGate has stepped in to resolve this market inefficiency by digitizing the valuation and purchase-sale process of mineral properties and other land resources. Founded in 2016, LandGate is an open marketplace that provides free listings of property rights assets, appraisals, free data intelligence, and paid subscriptions to access and value deals faster.
Appraising mineral assets or solar rights is a very complex process that can take months and a lot of resources. “Normally an energy company would need several geoscientists, engineers and technicians for at least a month to get the value of one asset,” said co-founder and CEO of LandGate Yoann Hispa during an interview with Hart Energy. “We've automated to the point that a mineral buyer can value any asset size in minutes, not an army of people, so the possibilities of what we can do are endless.”
“We are the Zillow of land resources,” Hispa said. “Our marketplace provides the LandEstimate which is the key data intelligence that landowners need to feel comfortable selling or leasing. The platform also helps buyers perform valuations extremely fast to better facilitate the deals.”
Similar to Zillow, a landowner can plug in a zip code or city on the data intelligence platform to view the LandEstimate, the estimated value of each resource for each parcel in the U.S., as well as all nearby listings, and data intelligence for oil, gas, solar, wind, water, and other property rights. Each listed property presents a valuation report, cash flow analysis, ownership, shapefiles and asking price. Transparency of the data and deals is what has been missing to make mineral and renewable energy transactions flow easier. With this knowledge, landowners can confidently claim ownership to obtain activity updates around their asset, or they can list their assets for sale or for lease.
Interested buyers can submit offers, browse free data intelligence, or run valuations in minutes with a PowerVal subscription, all substantially reducing their acquisition costs.
“LandGate has developed the best well production allocation using our database of thousands of interpreted type curves and automated forecasts which we offer for free to all of our users. Buyers can subscribe to PowerVal, value an entire company and run sensitivities in less than an hour,” Eric Thompson, vice president of Business Development of LandGate, said.
“Before the COVID-19 pandemic, the U.S. residential real estate market size was around $9 trillion per year, the commercial real estate, $16 trillion. Land real estate is $500 billion, but the market of the land resources associated with the land is ten times larger around $5 trillion per year, and it keeps growing with an increasing demand of energy, renewable and fossil based," Hispa said.
By buying on LandGate, buyers cut their acquisition costs. They don’t have to hire an army of landmen to run title and cold call mineral and land owners. They don’t need a large team of geoscientists to run economics. They can find great assets on LandGate, run economic and reserves reports in minutes. By listing on LandGate, landowners feel more in control and can typically achieve a better sale or lease price. The result is that buyers buy for less and sellers sell for more.
“The goal of the platform is to educate landowners on their mineral assets value, nearby activities, so the transparency gives them confidence in transacting, we also make it much cheaper and easier for a buyer to find and value a deal, so it’s a win-win," Hispa said.
“Unlike other brokers that deal with big oil and gas deals, LandGate’s automated valuation process allows it to cut the time needed from roughly 30 days to minutes and offer services, similar to those offered by a company like EnergyNet, to every landowner in the U.S.”, Thompson said. “LandGate also provides free well and production data for the entire U.S., which Thompson said adds to its competitive advantage in the land industry.”
In November 2019, LandGate completed a multimillion-dollar Series A funding round with Rice Investment Group. The investment will help with further automations and diversifying LandGate’s scope of resources offered on the platform.
“Rice Investment Group is one of the most prominent capital groups for the energy sector and we’re really happy to have them pushing our platform with us,” Hispa said.
In April 2020, LandGate partnered with Entoro Capital to provide enhanced marketing services. Entoro actively markets larger mineral opportunities at no additional overhead cost to LandGate.
Earlier in August, LandGate partnered with National Land Realty and their vast network of Land Real Estate agents to directly source new listings from landowners. Hispa wants to continue expanding the company’s listings, data and valuation to solar, wind and additional resources. “When you understand that land has all the resources needed for energy, whether renewable or fossil, that becomes a huge commodity.”
“Those markets are really exciting for us because once you start helping landowners, there’s really endless possibilities in terms of land resources and what resources we can provide,” Thompson added. “We’re not just a mineral marketplace. We've already built and proven that marketplace, so we’re ready to diversify into these new segments and I think very quickly we’re going to see LandGate be the go-to place for anything land-related.”
Moving forward, Hispa intends to capture as much market share as possible while bringing awareness to LandGate and its services.
“Once we create awareness among the landowners that we exist, we’re going to explode and grow to a Zillow-size company—that’s our goal,” Hispa said.
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