Replies to This Discussion

Permalink Reply by arminius on August 5, 2011 at 12:12am

My family has land in Cambridge township.  We attended a neighborhood landholder meeting sponsored by Sun O&G/Don Costo two weeks ago.  Should we sign as a group he promised to pay $3000 signing bonus with 17% royalty.  The lease was poorly written relying upon a series of addendums to provide landowner protection.  Some of my neighbors seemed ready to sign.  As for my family, having attended a KWGD landholder's meeting, we refused to sign.  The KWGD approach of crafting their own lease seems to be the best approach for individual landowners.

 

Permalink Reply by scott peterson on August 5, 2011 at 6:21am

The fact that Casto promises that you will be paid upon signing the lease is a BIG problem....... He has to go out & successfully negotiate those leases with an actual oil/gas drilling co. before anyone gets paid.  I seriously doubt that an independent lease broker has the ability to fork out millions of his own dollars speculating that he can get get your leases purchased by a drilling co.

Permalink Reply by Nelson Roe on August 5, 2011 at 10:59am

N.

I would highly recommend that you try to convince your friends/neighbors to attent the last KWGD meeting on the 9th at the Pritchard Laughlin Civic Center @ 6pm.  I would also advise them to please do some research prior to signing anything.  The research that I have done & the people I have spoken with about Sun O&G personally made me more than a little nervous about the thought of signing with them.  I have signed on with KWGD & I believe that they are shooting for the best deal with the most landowner protections that I have seen to date.  Mr. Williams having 25+ years of experience in O&G law is another comfort factor that should be taken into consideration with the KWGD group.

Permalink Reply by Jeremy on August 5, 2011 at 12:09pm

Nelson,

Has KWGD given you any indication as to what they hope to secure for the landowners in regards to signing bonus and royalties?

Jeremy

Permalink Reply by Nelson Roe on August 5, 2011 at 4:57pm

Not yet Jeremy.  We are probably all aware of some of the numbers that are being thrown out to people around us, but until the drillers actually see the acreage that is included in this group, it is kind of hard to tell what they will actually be willing to pay.  I have heard indications that some of the recent developments may be making things look more promising for the group to receive a nice price, but that is all just speculation until the bids/offers start actually rolling in.

Permalink Reply by DM on August 5, 2011 at 5:33pm

On KWGD's site they call the group "Ohio Group 5".  Does anyone know if this "Group 5" is just for Guernsey county or could someone from Noble possibly join the group?

Permalink Reply by arminius on August 6, 2011 at 3:07am

 KWGD's Group 5 is to include landowner;s from more than just Guernsey county.  Unable to attend their meeting in Cambridge, we heard their presentation at a gathering in Harrisson county a week prior.  Seeing that a major part of Harrisson county was already committed, that meeting was sparsely attended as compared to the latter meeting in Cambridge.  At the meeting I attended they said they were seeking landowner's from the adjoining counties.  Seeing the frenzy of activity occurring in the Noble County Recorder's Office, I would think Noble county would be included.  You could email Nate Vaughn of KWGD to verify.   He is very prompt at answereing emails.

Permalink Reply by scott peterson on August 6, 2011 at 6:38am

Noble is included for sure.

Permalink Reply by arminius on August 6, 2011 at 11:45am

Nelson,

I have been trying to convince my neighbors of the benefits of joining the KWGD group, but some are only looking at the immediate dollar figure.  Too many do not appreciate the value of a well writtten lease that KWGD can offer.  The main organizer of my sorrounding neighbors has suddenlly backed away from Sun O&G and is pushing for a meeting/deal with Dave Hill and a group he is organizing...too much drama.

 

Permalink Reply by Jon Henderson on August 6, 2011 at 12:54pm

You realize you don't need them to join for you to be able to join. I have been telling my neighbors of the benefits also but I'm not sure what they are doing. I have already signed on with KWGD.

In my opinion, most of the acreage will be bought up by chesapeake or another large company anyway. No matter who you sign your land to originally. Let's face it, there are not that many companies who really have the clout and resources to produce this oil and gas horizontally.

ALSO..... Has anyone on this site already leased their land, got the CHECK, and had it CLEAR the bank?

If so I'd love to know what you got per acre.

Permalink Reply by Nelson Roe on August 6, 2011 at 2:37pm

N.

I have run into the same issue.  I believe there were many people that were overcome by the dollar signs flashing in front of their eyes when the first groups came into town.  There are probably quite a few people out there that leased at an extremely low dollar amount & with a very poorly versed lease.  I understand that some of them probably really needed the $ to potentially save them from defaulting on a mtg payment or something, but for anybody that was not in dire need of the $ immediately, I believe that waiting & doing some research & seeing how things are going to develop will benefit them greatly both monetarily & in the way of getting a properly versed lease.  I can not blame the organizer for backing away from Sun, I did the same thing about a month ago.  The contract looked & sounded good initially, but the more research I did & people that I talked too, the more I did not like the sounds of the company.  I have only briefly talked to Dave Hill in person at one of the meetings & then one of his reps briefly on the phone.  At the time I talked to them, they pretty much said that they could not competitively compete with the "big boys" that were in town, but they were working on a deal to try to position themselves to where they could get competitive.  Perhaps that deal went through & they do have the backing that they need now.  I can not blame anyone for wanting to deal with someone locally & if my perception of the KWGD group was not as high as it is now, I would probably consider going back & talking to Dave again.  But, my comfort level with KWGD is high enough right now that I think I am going to stay where I am at & see this group through.  I agree with you, there is a lot of "drama" or at least confusion in this process.  But each landowner has to do what they feel is in their best interest.  I try not to judge on the companies that my neighbors are signing with, but I just hope that they have all done their due diligence & have worked out a deal that they can live with for many years to come.  If these wells are actually developed, this is not a lease that a person is going to get out of in just a few years.  They could potentially be dealing with the company that they lease to for the rest of their lifetime, as well as the lifetime (or at least part of the lifetimes) of their heirs to the property & I don't know that everybody is thinking that long term.  There are probably quite a few people that are just thinking of getting the initial $ in their pocket & not even worrying about what may lie down the road.

Permalink Reply by Jon Henderson on August 6, 2011 at 3:00pm

Initially my wife and I were the same way. We were just thinking the $ would be nice to pay off some loans and bills we had incurred while I was unemployed for 2 yrs. But after we started looking at leases and realizing the difference between a good lease and a bad lease we decided we needed to slow down and work on this thing. That's one big reason we went with KWGD and plan on working this through til the end.

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