The Brinker Hilcorp Amendment- Five Great Reasons I support it

The Brinker Hilcorp Amendment – Five Great Reasons I support it.

I am NOT an Attorney, and I am not attempting to offer legal advice.  However I am offering this post as a concerned member of the Brinker community.

I am a Brinker Landowner who signed the amendment.

There has been a lot of comment about this amendment.  I wish many more folks would have come out to hear Attorney Stuart Strasfeld’s commentary of this amendment last month, which was open to the public.  He did not give a “glass is all the way empty” approach, nor was it a “glass overflowing” approach.  He pointed out many aspects therein without neglecting the positives.

I would like to take the time to point out some of the beneficial positives since some folks might not have read the amendment as it currently reads at the Hilcorp office.  Some rely on their neighbors to tell them about it who for some reason leave out the positives.

 Here are just five of many positive benefits:

  1.  A 15% royalty opportunity for oil and gas. This, despite the fact there are several interests in the oil and gas.
  2. Strong water protection testing and replacement, above and beyond that of many other modern leases.
  3. Numerous surface property protections established above and beyond many other modern leases.
  4. Shut in Royalties paid if you are part of a producing well that is for some reason shut-in.
  5. Taxation mitigation in-line with many other modern leases.
  6. Added 7/3/13: Limit any unfavorable potential threats from legislatures/ government (see post reply on page 3.

One of the latest looming “negatives” described by some people having old Brinker Leases, and others is that with the amendment the lease will be forever.  According to my old Brinker lease, my lease already goes on “forever”- so long as the described conditions for gas storage are met by the lessee.  The Hilcorp amendment could then “forever” add modern property protections, and royalty improvement.

 

While my property is already under contractual lease, and apparently was when I bought it, I accepted the amendment as a good middle ground approach that includes significant improvements and consideration.

Royalty enhancement could possibly positively affect the value of my property, as compared to selling my property if it were to be stuck with one of the $200 gas royalties as described in some of the old Brinker Leases, along with few property protections.

So, what is there to lose?  I do not know, but it might depend on each property owners’ recognition as to what there is to gain.

I do not know how long the amendment is going to be available.  Do you?

I can only imagine that my chances of being in a drilling unit go up by supporting the amendment.  AND, possibly gain maximum drilling and community wealth potential while engineering for well unit planning is underway.

In closing, some feel it is a good idea to start a neighbor to neighbor campaign to influence people to go against the amendment.  

If you are interested in being included in a drilling unit then you might instead want to start a proactive neighbor to neighbor campaign in support of the amendment to avoid what I will call “drilling unit blockade”, or maybe even no drilling unit at all (who knows?).

And I am always encouraged to tell people to see an attorney to help them understand the legal document.  Again- I am NOT an attorney.  I also encourage folks to talk to industry experts to learn and understand the oil and gas industry, and perhaps consult an economist who can also help folks understand the science of oil and gas commodity and compensation.  Perspective is always important.

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Replies to This Discussion

Permalink Reply by Inchworm antenna on February 8, 2013 at 5:02pm

I wish everyone good luck.  

In any case, I do have Brinker property that ONLY had an old Brinker Lease, that I recently signed unto the Hilcorp Brinker amendment.  Sign-on bonus would have been great.  Hilcorp did not offer one to me citing I was I was already under lease with Columbia.  However they did offer the amendment which (to me) is substantially better than what is just in the old Brinker lease.

I'm hard pressed to find an amendment for someone already under lease that offered a higher royalty and better property protections.  

Anyone want to research for a better lease AMENDMENT that was recorded anywhere in the country, and lay it out here?  I'd be interested in taking a look at it.

Permalink Reply by dr j on February 8, 2013 at 6:57pm

Since there are little to no leases that have been AMENDED, that would be a moot point. 

We are really debating apples and oranges here.  You are operating on the assumption that original lease is an enforceable lease.   Many others contend that it is not as it has been breached.  It's not about Hilcorp and their amendment, it's about Nisource and evaluating if the have the legal right to do what they have done and control our deep rights.

 

Permalink Reply by Inchworm antenna on June 29, 2013 at 12:48am

An inquiry was made and the Brinker Amendment is apparently still available to qualifying interested parties.

Permalink Reply by Retired Tanker on June 29, 2013 at 8:18am

So, why wouldn't you wait until the Dec 2013 date passes and see if Hilcorp sweetens the present amendment. They certainly want the landowner to sign on and continue drilling in the Brinker. The offered lease won't get any  worse, as they try to lure away the lawsuit participants; plus the fact they are buying up Chesapeake leases. I would surmise that it is very difficult to put together a solid drilling unit with so many landowners watching from the sidelines. The drilling pattern of the Grubbs-Salem is the perfect example. Wait Them Out!  

Permalink Reply by Inchworm antenna on July 4, 2013 at 12:07am

Retired Tanker,

I don't think the lease amendment offer is about luring anyone away from a lawsuit. I think it's about an opportunity for people to move forward in partnership and opportunity to improve their own lease conditions for those who are interested.

Permalink Reply by Retired Tanker on July 4, 2013 at 7:47am

I believe you to partially correct. The main objective of the amendment is to obtain leases to form drilling blocks, but to do that they must lure the lawsuit participants. I wish I knew how may landowners have defected. I have no clue. You mention opportunity. I agree opportunity is extremely important, but it can certainly be heightened if solidarity is maintained and Hilcorp enhances the present amendment. The 15% royalty is good but could be better - the drilling conditions are good but could be better - I see no mention of upfront money; that could definitely be better.  I do believe those that wait will be rewarded for their patience.

Permalink Reply by Inchworm antenna on July 4, 2013 at 12:37pm

How do you define defector?  The people I know who were interested in the amendment were never engaged or interested in a lawsuit.  Some in the Mennonite community even described that they would not be involved in an entity that even threatened a lawsuit.  I noticed some Mennonites whom I invited to a Brinker landowners meeting got up and left after one of the presentations, I later spoke with a couple who mentioned what I just did above.  Solidarity is great, and my point here is that there is more than one way to do business.  It was through the solidarity of those who were not suing to which the idea of the Brinker amendment gained conception.

15% royalty is a potential exponential improvement to $200 annually.  The property protection considerations are plentiful and clearly spelled out and are an improvement compared to many other modern leases.  One would be hard pressed to find a better amendment nation-wide ever offered. 

Good luck in your quest.

 

Permalink Reply by Inchworm antenna on February 15, 2013 at 12:15am

.

Permalink Reply by Inchworm antenna on February 21, 2013 at 11:22pm

.

Permalink Reply by Retired Tanker on February 22, 2013 at 12:50pm

Inchworm, are you throwing in these bogus replies to keep this thread on the front page.... 

Permalink Reply by Finnbear on February 22, 2013 at 8:09pm

Bingo!

Permalink Reply by Inchworm antenna on February 22, 2013 at 11:42pm

Amazingly, there's still people in the Brinker community who have no idea about this :)

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