Comment

Comment by Jim Litwinowicz on April 9, 2012 at 5:50am

Myles, is it ridiculous to pay $150,000 if the value of the lease is several million more? And with better terms?

Comment by Jim Litwinowicz on April 9, 2012 at 5:48am

R East.  Cx are not flippers. When you sign a lease, you sign directly with an E & P company. They do not flip leases.  The problem with the 4 county group is two fold.  One is that two of the counties in NY are still under a moratorium. The other is that the extremely low prices of dry gas has caused interest in that area of the woods to drop significantly.  The interest now is in wet gas areas.

They sold a large package in my area.  I had been told by the dominate company for two years that no other company would ever drill here and their offer of $1500 and 15% with deduction was the best we would ever get. And keep in mind my neighbors had formed a group of about 1200 contiguous acres and that was still the best we could get from them. By aggregating a large group Cx brought in a company new in the area called Hilcorp and got us $3000 and 17% with no deductions. We also had similar offers from two other companies through Cx.  We choose Hilcorp because the lease terms were the best.

Call it luck, call it the result of a lot of hard work, I am just very glad they got me a much better deal.

Comment by myles fetterhoff on April 9, 2012 at 5:43am

You can get a lease for little cost

Comment by myles fetterhoff on April 9, 2012 at 5:43am

It's ridiculous to pay a group 150000 as a middleman

Comment by R. East on April 9, 2012 at 5:31am

Myles;

I have been to a couple of cx's meetings and, I can tell you they have done a horrible job on their 4 County Land Group. Not only are they "flippers" they are very poor flippers. They got lucky once and sold a package that was in a really hot area and that has given them "seed"  money to try other areas. Your comments below are "spot on". They claim to have all these "contacts" and "marketing expertise". The landowners do need to ban together, however, they can market their package just as effictively, and probably more effectively, than CX AND, save themselfs a lot of money!

Comment by rex roae on April 9, 2012 at 5:29am

I'll listen to whatever someone has to say if it will help my bottom line in the end.  I could care less if Jim made $25,000 off me if he got me $100,000 more than I could get myself.  I see this same scenario play out in the timber industry where people are sure they can get as much by themselves than if they used a forester.  Just doesn't happen.  Sometimes it's worth paying a little to get much more.

Comment by Jim Litwinowicz on April 9, 2012 at 5:15am

Never been at the Venango fire dept.  Never charged 10%.  The .85% was for people that came after a deal was made as it didn't seem fair to people that went through the entire year and a half process which included dozens of meetings, hundreds of phone calls and emails, lots of guts to stick with the program.

The whole deal works best when people get into the group before a deal is made as the larger the acreage and the more contiguous it is, the more leverage you have. If people know they can jump in at any time for the same deal, they have no incentive to join the group earlier and help in the negotiations.

Comment by myles fetterhoff on April 9, 2012 at 5:06am

or was that another group with a week to make up your mind at a 6 percent negiation fee down from the normal 10percent charge and .85 monitoring fee for five years.

Comment by myles fetterhoff on April 9, 2012 at 5:04am

people have set in on your meetings and the latest one in mercer you where using the sign up to badger people say look at all the neighbors sign up.  No you had' t start out at five percent or lower because of the other groups where not charging as much! they can get a great lease with everything for about 200.00 not 7500.00 or what ever negotiated behind the seens.  Did you not put on a show in venago fire dept.

Comment by Jim Litwinowicz on April 9, 2012 at 4:54am

So you've never been to one of our meetings and just judge on hearsay.  You never read through a lease we negotiated but tell people world wide we have bad leases. And we have never charged 10% for any lease.

We ask people to talk to their neighbors because it is much better to get several hundred contiguous acres together.  Companies need to from units and need larger grouping then most people own. Thus the importance of neighbors working with neighbors.

Come to meeting and learn something.

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