Comment

Comment by rex roae on November 6, 2011 at 2:08am

Randy and Sam,appreciate all the information.

 

 

It helps to hear more details and opinions and really puts my mind at ease.

 

 

Sorry if my questions are a pain in the butt but it takes me awhile to feel comfortable when it comes to business.

 

 

Looking forward to meeting some of you at the upcoming meeting which my wife and me will be attending.

 

Rex

Comment by xtreeman on November 4, 2011 at 1:53pm

Thanks Randy. I don't think anyone could have said it better!

Comment by Sam Douglass on November 4, 2011 at 7:43am

I need to tell you at the outset that I am one of the attornies being considered to represent the group so you know where I am coming from.  If I do not get the assignment it will not be the end of the world.

I do not know anything about Co-exprise, but there  are a lot of outfits that want to be your agent or counselor - for a fee.  If you measure the percentage asked against the probable bonus [and maybe your royalty as well] you may be surprised at how much money it amounts to.  The advantge is that you do not have to dig into your pocket before the deal is made and you receive a wad of cash - but you should consider how much you will eventually pay for your "free ride."  In addition, there is at least the possibility that as time and expense add up the middle man will find it difficult to continue to carry the deal without getting paid.  Does that mean he will encourage you to settle before you have the best deal you can get?  Possibly.   There is something to be said for paying as you go with the right to hire and fire your representative.  You may find it difficult to fire a middleman.  It is doubtful that these middlemen offer any particular espertise that cannot be obtained elsewhere.

My "prejudice" would be to tell you to go with the group.  While I am convinced it is the best deal for you, you will have to figure that out for yourself.  It could be a long time before a deal is made that the group finds acceptable.  Meanwhile some spme owners might decide to do their own thing - and there is nothing to stop them - except the fact that they might want to get the benefit of their original investment.

Good luck on starting your own group.  From what I can see the people organizing the NW group have done a lot of work - and received nothing for it to date.  I think it probably started with the idea of one landowner thinking I believe I can get more money if I can get othes working with me.  That is the selfish motive.

Waiting it out could be appealing, but while you are waiting it out the producers will pick off the landowners they can get - one at a time - and you not get the leverage that a group might offer.  Wyoming County landowners, for example, stuck together and got bonuses of $5,750/acre and 20% royalty.   I tell people to Google the Barnett and find out what Texans pay Texans for a shale that is not as valuable as the multiple strata available here with gas that doesn't have to be carted all the way from Texas to Eastern markets.

You have to decide for yourself what you want to do.

Comment by rex roae on November 4, 2011 at 12:56am

Sam, you seem pretty knowledgeable about this stuff.  What's your advice as to how a landowner should tread here?

 

 

Trying to learn on the fly here.  

 

From what I've read, it seems our options are:

 

- Go with a company such as Co-eXprise who is experienced in negotiating these gas well leases and has numerous connections.  Downside is higher fees but I don't believe you pay anything until a lease is negotiated.

 

- Go with the already formed landowners group.  Not sure what experience, if any, they have and why we should put our faith in them.  Lower overall fees but fees must be paid in advance regardless of interest in our area and payment is non-refundable.  Upside is a lot of the legwork has already been done.  Everything is in motion.

 

- Start from scratch and form own group.   Upside is you're only investing your time and can get together with other local landowners who have the same goals.  Downside,....you're starting fro scratch.

 

 

- Wait it out.  Seems the gas lease bonuses get substantially higher the longer you wait.  If this play is really as important as they say, is there any real concern about being left behind if you don't sign now?

Comment by gary smith on November 3, 2011 at 10:33pm

jim, then do it.

Comment by Sam Douglass on November 3, 2011 at 3:29pm

Trite phrases?

 

“Strength in numbers?”

“Patience is rewarded”

 

 

A couple of interesting Web  sites?

 

http://www.google.com/search?q=utica+shale+maps&hl=en&biw=1...

 

http://geology.com/articles/utica-shale/

 

 

If you were running the show for a producer:

 

Maybe you would try to get the large parcels first, to get a position?

 

Maybe find the people who had a little need for money and get them signed up first?  Maybe look for a guy in Hawaii who owns property – and offer him or her a fast buck?

 

Maybe be pleased if you could sign up a bunch of landowners at once to save the trouble of running them all down.

 

Or maybe you would try to divide and conquer.

Comment by Jim Dickinson on November 3, 2011 at 3:07pm

Gary, I have an idea for you...Read what the Fryburg group accomplished with their piece of the planet. Thanks, RichR

Comment by gary smith on November 3, 2011 at 2:14pm

i have an idea, start your own group. as far as experience setting up and running a group such as this, there isn't alot of experience on the planet. this is new.

Comment by Jim Dickinson on November 3, 2011 at 10:29am

So, for $400 you are allowed to hear what they have to say. Looks like more pointing the gun than jumping it

Comment by Dave Siekkinen on November 3, 2011 at 5:38am

The membership fee is $100 per landowner plus $2.50 x #acres.

For example, it will cost a person who owns 120 acres $100 + (120 x $2.50), or $400.

I hear the next meeting is only open to those who have paid their membership fees.

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