Replies to This Discussion

Permalink Reply by George Smolinski on August 30, 2011 at 2:29pm

You are correct Jon, I was not able to attend any one of the meetings. Due to my business schedule. I am sure that KWGD will represent other groups, and maybe at that time I may change my mind. I've learned something new each day reviewing this site. Appreciate your input on getting the language changed to gross vs net. I am honored and privileged to have met some very good people on this site. Best of luck to you as well. I look forward to future communications with you.

Permalink Reply by scott peterson on August 30, 2011 at 2:34pm

I agree with Jon. Also we were all provided with a copy of the entire lease as soon as we signed the confidentiality agreement. Therefore, I for one had a over a month to dissect the lease. The other thing that alot of people seem to misunderstand is that you are not obligated or bound to the group. You can walk away anytime for any reason right up to the day a lease offer from an O & G Co. is put in front of you for final acceptance. The power in numbers factor of negotiating with 18,000 acres in the deal and with a team of experienced O & G atty's on your side with an extremely landowner friendly lease is by far the way to go in my humble opinion.

Permalink Reply by Finnbear on August 30, 2011 at 2:27pm

Sorry, I was referring to a landowner non-profit group, not an land agent/attorney group. I am part of a landowner non-profit group in Belmont County and it does not operate like KWGD. A group like KWGD can be a good deal for the landowner, especially if they do not have the time to educate themselves on this business. A landowner non-profit requires a lot more research and participation and communication from and between its members but can be very successful and not give up any of the lease bonus or royalty for representation. With a huge acreage pool compared to an individual landowner, a group's acreage is far more attractive than an individual's.

Permalink Reply by George Smolinski on August 30, 2011 at 2:42pm

I would not argue any of the points you mentioned. You are fortunate to be able to non profit a group of neighbors and friends to pool your properties. I wish your group as well the best of luck.... Are your members signed to a confidentiality agreement? I welcome anyone to take a look at the latest lease I have in hand and play devils advocate in poking holes in it so that weak areas can be shored up and corrected. As you can see Mark Curry, who opened this forum has seen a terms much worse than my offer. I really need to get that NET changed to Gross at the well head!

Permalink Reply by Steven Gardner on August 31, 2011 at 3:25am

Finnbear.. I know some other people in the Belmont group but none have seen the lease they plan to bid with and they have been in the group almost a year now. Am I misinformed or are you familiar with the lease ? I have heard that they are using the addendum approach by trying to "fix" the old standard Oil & gas lease. I know they will have to get an atty and will incur some costs then.

As far as educating yourself .. I think everybody needs to do this regardless of what type of group you go with. You just can't make an informed decision without knowledge. I had attended a half dozen meetings prior to attending the KWGD meeting at the Lodge in June and read as many leases.

I'm still attending meetings .. this week at the Garison meeting for a new group.. Dr Clark from Marietta College spoke as their technical advisor. They want a 12 month commitment to join and "see" their landowner friendly lease and will bid out different segments of the group. I think the landowner friendly terms are availiable all over the net. The big thing that a group approach brings is the abilty to negotiate a better lease, large acreage and the ability to market it but you still need to be informed.

I trust the KWGD group to know how to write the bid package so the members are protected when a deal is made. They also know how to present the package in a GIS ready format. So... yes they cost money but they bring something to the table too.

I am still surprised at the number of newcomers at these meetings. I work too but have made time to go to the meetings and try to get up to speed.

Good Luck to All !

 

 

Permalink Reply by Finnbear on August 31, 2011 at 3:29am

Steven Gardner, Which Belmont group are you referring to?

Permalink Reply by Steven Gardner on August 31, 2011 at 3:57am

Finnbear.. never have heard a name but I know people in Goshen Twp... supposed to have 30K acres

Permalink Reply by Finnbear on August 31, 2011 at 4:27am

Steven Gardner,

That is the group I am participating with. We do not have our own written lease per se, but we do have a set of lease guidelines (basically an addendum sheet) that will need to be met by who ever offers to lease our land. Some energy companies will NOT use any lease other than their own as a starting point in negotiations so the group felt it an unnecessary expense to pay the legal fees to write a lease that may never end up being used. This set of guidelines was compiled by studying numerous leases (both good and bad) and then assembled to address all the group's concerns. This list was emailed to each participant who supplied the group with an email address and has been available in paper form at each meeting since it was compiled. These concerns will probably be addressed by an addendum sheet which I have no problem with as it is fairly standard practice in this business. It has been explained at each group meeting that there will be an attorney consulted who will look over any legitimate offers to make sure their lease/addendum sheet does address all the groups lease guidelines. This attorney fee will be split up by the hundreds of group members which will end up being a very minimal fee per member. After the group receives and approves a legitimate offer , each member is encouraged to consult their own attorney for an explanation of anything in the lease they don't fully understand. This all has been covered at numerous meetings. I have been to many of the meetings and I can say that some attendees don't listen and pay attention during the meetings. They sit and chit-chat amongst themselves during the entire meeting and then they ask questions that were covered in depth, only minutes earlier. The same questions often get asked by more than one person, again because they were not paying attention. I am very confident in and very aware of what the group is doing but I have paid very close attention to everything I can concerning this issue.

Permalink Reply by Steven Gardner on August 31, 2011 at 6:30am

Finnbear... sounds good and I must say thats the most info I've heard about the group to date. I don't mean to belittle the addendum approach but I had read a lot of leases prior to seeing the KWGD lease and found them hard to read.. ie. read the addendum first then go through the lease and delete all pertinent data. When I first saw the KWGD lease and other landowner friendly leases on line I was struck by how easy they were to read and understand. I have to admit that my first thought was "Who would buy this lease" but they do because they apparently want this shale really bad !  I've heard ? you can join the ALOV group for a small fee and have the use of their lease... not sure how that would pertain to a group. I guess the people I know over there are Chit chatting during the meeting .. lol !

Permalink Reply by scott peterson on August 30, 2011 at 2:38pm

Also the number of acres & landowners was discussed and broke down by areas as well at meetings that I went to. I feel very comfortable with the whole process so far.

Permalink Reply by George Smolinski on August 30, 2011 at 2:57pm

Thanks for the clarification Scott. Not having the opportunity to attend the meetings was not a positive for me. The information you stated was presented was not a part of the packet the KWGD group forwarded to me.

I may make some phone calls and reach out to KWGD, as attending future meetings is not an option due to my business schedule. Who knows...maybe the next group????? I have NOT heard anything terribly bad about them. In fact I sincerely hope they do the best for your group!

 

Permalink Reply by Marc on August 31, 2011 at 6:02am

I don't think George failed to exert the effort - he just sounds very busy.  At the same time, there is no harm in joining a group (even if you don't know much about it) so long as it's "easy come, easy go". KWGD made clear in their engagement letter than anyone can leave at anytime for essentially any reason. Also, it is possible to go it alone and still make out very nicely. Though I would think it normally requires more time and stress, individuals can often point to terms secured by landowner groups and demand something similar. Some people will take 90% of what a group takes if it means they can get it done sooner, and some of these groups take a long time.  The KWGD group is about to have bids come back and hopefully we have an offer that people can agree on fairly soon.  I've only been to the most recent meeting but that sounds like it might the case.

 

 

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