Replies to This Discussion

Permalink Reply by DNH on March 31, 2012 at 11:30am

I believe this is a bunch of investors looking to tie up land and then lease for a profit later.  I don't believe they are an energy company at all.

Permalink Reply by Lauren on April 2, 2012 at 7:24am

CX-Energy is not comprised of any investors, they actually help form and organize landowner groups and then connect them with multiple oil and gas companies interested in leasing their oil and gas rights. Their mission is to achieve the best value for all involved in the transaction while providing expertise and utilizing our proven process, and best value is defined as more than just the up-front bonus payment (dollars per acre) and ongoing production royalties. Best value also includes mutually acceptable lease terms which address responsible surface activity and land use, water and environmental protections, clearly defined production clauses, and other provisions (including legal liability, hold harmless, tax consequences, and dispute resolution). 

They believe in the power of collective bargaining, and in the past 12 months CX-Energy has been able to put $190 million in landowners pockets with premium oil and gas lease terms including the Mt. Jackson 3 group in Mercer County who recently received $3,500 per acre.

There is no upfront cost to the landowner to join the group, no cost if a lease is not signed, the landowner is not under any obligation to sign a lease that is presented to them, and the informative meetings are free with no-pressure to join.

Permalink Reply by DNH on April 2, 2012 at 3:33pm

CX - Energy is a very deceptive name.  These groups do have their place for landowners that don't want to put much time into learning this process.  Problem is that these groups always talk about what a landowner "might" get for a lease.....yet the landowner's property is tied up for the long haul.  The whole MDS deal was similar...never panned out to the five figure bonus they were touting.

I'd be curious to know what this group is asking for in bonus / royalty if a deal was struck....

Permalink Reply by Lauren on April 3, 2012 at 4:08am

For this Clarion group, they "tie up" the property for 12 months, with the option to opt in for another 12.  It is not about landowners not wanting to learn about the process - it is about landowners banding together and negotiating as a large group. You have more collective bargaining power when you are marketing a 15,000 acre group to an oil and gas company compared to the power you have as an individual land owner. For no money up front, CX-Energy provides the group with  a full time team of professionals with a proven success rate including lawyers, a team marketing the group to multiple O&G companies, along with a marketing team working to grow the group.

The last deal CX-Energy negotiated between Landowners and O&G companies was for 15,000 acres in Lawrence & Mercer Counties, PA with$3,500 bonus/acre (vs. 2,750 offered by land man locally at the time) with 17-18% GROSS royalties (compared to 17&18% NET royalties being offered locally at the time).   They also had better lease terms compared to the leases landowners signed outside of the group.

Permalink Reply by Mike Stevens on April 3, 2012 at 2:00pm

Thanks for the replies. I did attend the March 29, 2012 meeting and found the presentation to be well put-together and very informative. I do like the team approach, utilizing people with various areas of expertise, all working towards the common goal of obtaining a favorable lease agreement.

Permalink Reply by John Soroka on April 30, 2012 at 8:47am

My observations of the presentation I attended Apr. 26 in Emlenton mirror those above by Mike.  My assumption may be incorrect and I welcome correction if needed, but it appears that Lauren may be a CX representative judging by the very detailed nature of her posts. Of all the presentations by various entities seeking to assemble landowner groups, in my view, this was the most professional in the sense of a decent powerpoint and well-spoken agents.  CX takes 6% of the bonus (no fee on royalties and no fee if lease rolls over to a 2nd five-year period). A bit steep compared to the others. I visited their website and found the one-page did not provide much information.  It would be welcome to see their website updated to show detailed maps of areas under their agreement and areas successfully leased by them.  Yes, I understand they have proprietary software for their in-house use, but for prospects considering their services, the more success demonstrated the more convincing they might become.  There are follow-up presentations in Emlenton in May and June.  Disclaimer: I am not an agent for nor have yet to conclude any dealings with this company.

Permalink Reply by Mike Stevens on May 2, 2012 at 1:26pm

John, I also attended the presentation on April 26 in Emlenton. I was hoping for more of an update but it was similar in format and content to the meeting I attended on March 29. You are absolutely correct regarding Lauren. A quick web search shows that she is a fairly new marketing associate at CX-Energy. As to the fees CX-Energy charges, they seem fairly comparable to others I have heard about and talked with. CX-Energy does seem to have a well defined and comprehensive business structure. However, the main concern for anyone is value received for fees paid. I suppose that's an individual assessment we each have to make. I have to agree with you about their website, it is a bit light on information and I believe they would benefit from providing more in-depth information about themselves and their past track record.

Permalink Reply by Mat B on April 30, 2012 at 4:20pm

From my understanding the gas companies are no longer interested in leasing the large groups.  There have been many landowners groups in the area that have not been able to get a lease. Also, we were told by an attorney that you want the lease to say no deductions, it doesn't matter if it is Gross royalites or Net royalites as long as the lease states no deductions.  Do you have any information on this?

Permalink Reply by Tracy on May 1, 2012 at 7:25am

http://gomarcellusshale.com/forum/topics/really-disappointed-about-...

Mike, please read the shale discussion I posted here before you sign with M&P.

Permalink Reply by Mike Stevens on May 2, 2012 at 1:39pm

Tracy I have read through your posting and it seems to me that the two biggest issues you have with CX-Energy/M&P lawyers is a lack of communication and the wait time to receive your bonus check. Apparently, you were offered and accepted a decent lease agreement which was subsequently extended but also increased in value to you. I believe that after you receive the bonus check the issues will be resolved. Is that correct or am I missing something else?

Permalink Reply by Tracy on May 2, 2012 at 1:58pm

I just expected a lot more for $250 per acre. They don't even do the title work. I expected some professional help out of them (taxes, financial). I feel like the only thing they did was get a few addendum added to a standard Hilcorp lease and an extra $250 per acre. No communication from them until the first 90 days were over. Then when the 2nd 90 day expiration came and went, I called them, and they have told me one lie after another. They absolutely failed to get bonus money paid by the expiration date on the least.

Permalink Reply by Lauren on May 3, 2012 at 6:53am

Tracy, since your work with CX and M&P they have added a lot of staff including someone to focus on marketing/communication (me!). We now send out monthly newsletters to our groups updating them on the general status, and will continue that once leases are signed.

No one at M&P or CX ever purposely lied to you about timing or when your check would be delivered. Once the leases are signed we often play the middle man and can only research the individual case and relay the information we are told. Unfortunately Western (the company doing the title work) ran into problems clearing leases in a timely and efficient manner mostly due to pure abundance. I am sorry if this was not clearly communicated to you earlier. We are very aware of what leases have been paid and which ones still have not and have done our best to extradite the process, but for the most part we are playing a waiting game with Western. We did look into your case specifically this week and we were told your check would be in the mail (sent to you directly) yesterday.

One thing to keep in mind, is CX and M&P are not getting paid until after you get paid - it is in our best interest to make sure you are getting your money in a timely fashion.

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