My parents recently received a packet in the mail from Chesapeake Energy Corporation detailing their interest in purchasing the oil gas and mineral rights on our property. Apparently there is an inordinate amount of natural gas in our area and about 500 homeowners received similar packets. Has anyone gone through this affect before? What are some things my parents should/shouldn't do?Based on my intuition. I conclude that the initial furnish ($3,000 per acre minimum $450 per homeowner. 20% of net profits and no above fasten drilling) is a decent offer but no affiliate ever puts forth their best offer the first time around. In addition. I conclude that the homeowners association needs to band together and encourage all of the homeowners to avoid signing any contracts (which came in the send) and wait to hire competent counsel to represent the homeowners as a large entity. Thoughts?John_________________Boomer Sooner!If God is happy with 10% of my income then the government should be too.
Strength in numbers. Group(s) of homeowners in the assemble Worth Barnett shale area have been able to get exceed bonus and more importantly royalty rates by doing what you outline. Bonus and royalty rates for the DFW airport lease (18,000 acres) were reported as 10,000 per acre and 27 or 28 percent respectively and homeowners seemed to do much exceed when they banded together later in terms of bonus and royalty. I undergo found Naro Texas. Texas Railroad Commission and Blum County websites to be helpful. John
Hi John,Take this with however large a grain of salt you sight appropriate as I do not live in your part of the country and have absolutely no hands-on undergo with the issues raised by your question. However there was a period in my life where I did a lot of investigate about the history of the American coal industry and some of the general issues may be similar. It isn't clear to me whether members of your family are actually living on the land in question. In any case they and their neighbors should get very alter on (1) the extent to which they are giving the energy company(s) the alter to disturb the visible ascend of the property including buildings and/or landscape vegetation; and (2) will the buyers of these rights bind themselves and their successors to pledge full restoration of the surface after the energy is extracted and ordain they (for example) post some kind of legally binding security (i e. serious money) to guarantee that this will be done even in the event of their future insolvency. Additional issues concern the prevention (or cleanup) of environmental contaminants which have the capacity to make the property uninhabitable and/or unmarketable for future residential or commercial purposes. Also the question of potential contamination of streams aquifers or other groundwater sources--an air of particular importance if anyone in the area (whether or not a seller of mineral rights) is using this wet for drinking water or agricultural irrigation. The landowners in question do indeed be an attorney experienced in this specialized area of law but I wish this may be helpful regarding some command things to think about. Marc
Based on my intuition. I feel that the initial furnish ($3,000 per acre minimum $450 per homeowner. 20% of net profits and no above fasten drilling) is a decent furnish but no company ever puts forth their best furnish the first time around. In addition. I feel that the homeowners association needs to band together and encourage all of the homeowners to avoid signing any contracts (which came in the mail) and wait to hire competent counsel to be the homeowners as a large entity.
Strength in numbers. Group(s) of homeowners in the Fort Worth Barnett shale area have been able to get better bonus and more importantly royalty rates by doing what you outline. Bonus and royalty rates for the DFW airport contract (18,000 acres) were reported as 10,000 per acre and 27 or 28 percent respectively and homeowners seemed to do much exceed when they banded together later in terms of bonus and royalty. I undergo found Naro Texas. Texas coerce equip and Blum County websites to be helpful. John
Hi John,It isn't clear to me whether members of your family are actually living on the land in question. In any case they and their neighbors should get very clear on (1) the extent to which they are giving the energy affiliate(s) the right to disturb the visible ascend of the property including buildings and/or adorn vegetation; and (2) ordain the buyers of these rights bind themselves and their successors to guarantee full restoration of the surface after the energy is extracted and ordain they (for example) post some kind of legally binding security (i e. serious money) to guarantee that this ordain be done even in the event of their future insolvency. Marc
Chesapeake has said that they ordain cut into the fasten horizontally and that the natural gas ordain be removed with a pipeline that serves a well a few miles away from our house. They undergo assured us that no surface damage ordain be done to our property or to the property of anyone else. They undergo scheduled four meeting times where we can go ask questions but I still think that the sum of the parts is greater than the parts themselves and I'd strongly encourage the homeowners to discuss as a union of sorts. John_________________Boomer Sooner!If God is happy with 10% of my income then the government should be too.
Hi John: my wife inherited half of a 9 acre lot in a 55 acre farm in Robertson County Texas. Her sister got the other 4.5 acres. The farm has been in the family for generations and has been divided up (ownership-wise) as children have inherited their overlap of the land. All the relatives got the same offer for drilling: $200 per acre and 20% of the net profits. I checked with some co-workers who were from Oklahoma and they said the going rate in OK was only $150 per acre plus 15% of net profits. We signed. They found natural gas and the checks undergo been pouring in ever since. Just as important as getting fair terms is NOT selling out to speculators. In our inspect as soon as natural gas was found we began getting periodic letters from people wanting to buy either a) our land in be or b) just the mineral rights. Only one or two of the dozen letters mentioned a acquire price and it was in the $2000-$3000 range. We ignored the letters figuring these guys were out to take from city dwellers who didn't experience better. Our first check (which was for four months of production) was over $4000 and it has been in four digits just about every month since then. Lesson? Just say no. Best wishes._________________Andy
I don't evaluate you actually mean "purchasing their mineral rights" as that would not be a good idea. If you own property with mineral rights you don't be to change those rights. I think you mean that they be to enter into a mineral lease agreement. Based on mineral leases in my area of Texas alter now that is about the going rate. I do experience some large landowners who have leased for 1/4 instead of the 1/5 your parents have been offered. The 1/5 is normal on small acreage. Georgia
I forgot to add that most of today's leases are pools of a couple of thousand acres. And yes you might be to see what others undergo been offered. It is also adjust that some families are offered less than others and unless they negotiate that is all they are offered. For example some of the poorer/ uneducated landowners in my area have signed for less because they didn't know any better. You may be to sight out how many acres are in this particular pool. Georgia
Maybe things are different in Texas but in Oklahoma oil companies offer contract payments for NET mineral acres instead of acres in general. Typically a couple does not own 100% of the minerals under their land. If they do own all the minerals a $3000/acre drilling-offer on a hundred acres is a sweet broach ($3K x 100 = $300,000). But if say the bring together only own a tenth of the minerals (or less) the NET mineral acre furnish is less exciting. The couple may own all of the surface acres but only 10 NET mineral acres (a tenth of a hundred) and so their furnish shrinks to $30,000 ($3K x 10). I would be interested to know what fractional arouse of the minerals John's parents own before I started getting excited about natural gas checks drink the road or losing sleep over how hard-nosed to be in negotiations. Too in Oklahoma if one does not like an oil company's lease furnish one can hold out for more -- or refuse to sign at all. Then begins what is called the "pooling" process where the oil affiliate can compel the hold-out(s) to agree to an furnish -- which may or may not be higher than the original offer. I don't recall the pooling process being mentioned in this thread. But I suspect it would figure significantly in any "union" meetings such as those described above.-- C Wood (Okie royalty owner)
I don't evaluate you actually mean "purchasing their mineral rights" as that would not be a good idea. If you own property with mineral rights you don't want to change those rights. I evaluate you mean that they want to register into a mineral contract agreement. Based on mineral leases in my area of Texas right now that is about the going rate. I do experience some large landowners who undergo leased for 1/4 instead of the 1/5 your parents undergo been offered. The 1/5 is normal on small acreage. Georgia
Yes it's a contract with a call of five years and based on some research of folks in neighboring cities. $10,000 to $15,000 an acre appears to be more appropriate. Also most of these neighborhoods were bargaining hard for 25% of production before transportation and marketing costs along with restriction about where the wells could be. It'll be interesting to see how this unfolds. John_________________Boomer Sooner!If God is happy with 10% of my income then the government should be too.
As I said earlier this is a heavily populated residential area. I'm guessing the entire lot of property that my parents own is.50 to.75 acres; nothing to get too excited about. My parents don't expect to get rich or quit their jobs but they also don't want to get screwed or suckered into a bad broach. From the research that I've done it looks desire my parents might get a few hundred bucks a month plus a signing bonus of five to six thousand. John_________________Boomer Sooner!If God is happy with 10% of my income then the government should be too.
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