Replies to This Discussion

Permalink Reply by petej on May 14, 2012 at 9:26am

Mike C.

Have seen the map. Not as scattered as you may think. SW Mercer is not even in. Much of the land in our area and several of my friends (not neighbors) is HBP. Let the trading begin!

Our offer should be in excess of what we could get on our own and more than enough to cover the commission as well as better landowner terms or why would we sign the lease?

All we did was sign a marketing agreement not a lease.

Permalink Reply by petej on May 14, 2012 at 9:08am

Jim,

Have to agree with Mike C. on this one.

Even the postcards that went out back in mid-March seemed to warn that if you did not sign soon you would miss out. We and 9 of our neighbors had already decided to sign the 6 mo. marketing agreement so it did not influence us. However, we did discuss this fact one week later when several more "new member" meetings were added. Smells of high pressure sales to someone undecided.

 

Permalink Reply by Jim Litwinowicz on May 14, 2012 at 9:43am

The first meetings were in Feb, I think. I know I singed up people in Feb. We've been negotiating since March. A deal was possible at any time.

And the post cards did not say a deal was eminent as far as I know. But one is now.

Permalink Reply by Mike C. on May 14, 2012 at 10:50am

The post cards did not say a deal was eminent.  The postcards were for a meeting in which every speaker that spoke talked about how a deal was all but done.  I have no intention of attacking the group.  Groups can work in most situations.  I know you sell the power in numbers, but I think a solid group of contiguous acres that hires a good attorney on an hourly basis could get a great deal for far less than 4 plus million dollars.  From the beginning my biggest beef is with the 6%.  Someone that stands to get a $100,000 check has to pay CX $6,000.  While someon that is to receive a $1,000 check has to pay $600.  I do not see how that is fair for the larger landowners that bring most, if not all, of the value to the table.

Permalink Reply by petej on May 14, 2012 at 11:35am

Hey Mike C.

That$1,000 check has to pay $60, not $600.

Yes, 6% is FAIR, IF I see value!

I only signed a marketing agreement, NOT A LEASE!

You have several very good points here. First, "a solid group of contiguous acres." Yes, if you can put that together! And that is the end of my first through 10 points. Many problems with one size fits all.

 

 

 

 

Permalink Reply by Ragnars Repo on May 16, 2012 at 12:40am

Is that all you signed. Got trapped in that agreement myself after it was explained to me it was not a problem to get out of. Not true.

Permalink Reply by petej on May 14, 2012 at 11:57am

Mike C.

This may go area by area. In our small 2-3 township area, those of us not leased (HBP) have banded together. We felt that going with cx considering all of the other factors (many) here that this was the best way to go. No contiguous acreage here!

 

However! By staying a small group in a big pond - the small company that holds all or many of the leases around us gives the large companies an invite!

Permalink Reply by petej on May 14, 2012 at 11:02am

Yes, you are correct. The first meeting was in mid-Feb. We were there. We have also been there in March and again in April and will be there on Tue. May 15.

We are not looking for this to be completed quickly. This is a 100 year decision in my veiw. We are going to affect the lives of our children, grandchildren and greatgrandchildren - if they stay here.

Here is my point; first meeting in mid Feb. and in "March a deal was possible at any time". Hey, this is way to fast for such an important decision for rural America! Not dissing them, they are just to busy working jobs and farms.

Also correct, the postcards did not say "a deal was eminent". However, the way they were worded insinuated that it was! Example: my "neighbors" approx. 2 miles away 80 year old couple went to the first meeting and were informed but, when the postcard came, they called me wanting to not miss this and we must...

Jim,

I think you have been fighting the battles on here way to long.

I, as many of my neighbors, have signed the marketing agreement. We know what we want to see.

I have enjoyed many of your posts as they are very informative.

Why am I defending myself? We are on the same page here!

Permalink Reply by Mike C. on May 14, 2012 at 6:17am

The problem is that your realtor is charging 2 to 3 times the rate of other groups. ALOV is operating at less than half the cost of CX and their lease is far superior. If you are in the Mt Jackson area I think your group has value. Anyone outside that area will be left out of production. So your realtor example is a way to relate to those that have no idea how the process works and it simply scares folks into thinking that they will be raked over the coals if they do not sign with CX.

Permalink Reply by Jim Litwinowicz on May 14, 2012 at 6:26am

So you are saying that anyone out side of Mt Jackson lbe out of the area that the E & P will produce????

Permalink Reply by Mike C. on May 14, 2012 at 6:36am

What I am saying is that Mt. Jackson has a nice block of contiguous acreage that they could get a premium for.  That premium is being reduced by acreage being included in the block that lies outside of Mt. Jackson.  Those parcels will be signed and given a bonus payment "maybe".  They will then be cut out of production by the companies that hold the rights in those particular areas, Enervest, Chevron, Atlas and Carrizo to name a few.  Those parcels, while having an asset below them that is viable, will not be produced because they signed with someone not in their particular area.  I am not sure how your "realtor" can fix that issue.

Permalink Reply by Jim Litwinowicz on May 14, 2012 at 7:04am

First of all, Mt Jackson is in Lawrence Co. I think your confusing Mt Jackson with Jackson Center. Land in Mt Jackson is already pretty much all leased.

Second, you need to better understand how all of these companies work. There are multiple companies signing leases in Mercer Co just as there were in Lawrence...or Butler...or Greene...or Belmont....or or any other county where oil and gas exist. Caffey, Adapt, Vista, Hilcorp, and more all signing leases in the same townships and resulting in a piece meal pattern. This leads to a checkered area where multiple companies have various leases in an area.

Doesn't really matter if it done in a group or if is done by multiple land agents spread across a county. If you had looked a map of Lawrence Co before the first Mt Jackson group was formed, you would have seen lands leased by Atlas, East, Rex and others. They were often small units for old wells that led to a checker board of leases. These companies are now in the process of consolidating drilling units in those areas.

And by leasing some parcels not directly adjacent to a large tract allows them to do the swaps and sales to consolidate their holdings in their targeted area. Its the best way for them to acquire leases in their target zone that have been leased and being held prior to this.

Companies will then contact each other to work out various scenarios to get producing units.  They will assign (or swap or sell) leases to each other to create drilling units.  They will also often enter into joint ventures where they will share in costs and profits on a drilling unit. Because they all have a strong interest in producing all of their holdings, they will find a way to get it done.

As long as there is reasonable profit to develop this area, all landowners that sign a lease will eventually be developed (unless their neighbors never sign with anyone and a unit cannot be formed). It will take many years, perhaps a couple of decades. But as long as the oil/gas can be extracted at a reasonable profit, these companies will get it done.

• ‹ Previous
• 1
• 2
• 3
• 4
• …
• 11
• Next ›
• Page