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We have heard from hundreds of you and appreciate you all participating in the process of
gathering information on the evolving mineral rights status in the Keller area, as well as your insightful, helpful comments.
Many HL residents "in this industry" have joined the HL Gas Lease Committee, greatly assisting in analyzing data received
and performing the research necessary to make an informed decision on all the mineral rights offers being received.
The most common questions have been:
- What about the coalition?
- Where will the drill sites be?
- Will they be safe or affect our quality of life?
- What could the signing bonus be?
- How much will the royalties be?
- How can I find out if I own my mineral rights?
1. Coalition status: Harding/Petrocasa (aka DDJET/ExxonMobil)
gave a presentation last week to the HL Gas Lease Committee (and other leaders in the ever-growing coalition being formed).
As we have been making calls and gathering information to keep you informed, we have "found" other HOAs (and large areas that
are not HOAs) in Keller and just over the border into Southlake who are organizing to maximize their participation in the
Barnett Shale explosion. We are a loosely-formed (we have joint meetings, but slightly different methods of organizing)
coalition of over 2000 acres. We hope this increases our leverage with those seeking mineral
rights in Keller/Southlake.
2. Drill site locations: The Texas Railroad Commission
(http://www.rrc.state.tx.us/onlineservices/index.html) governs the placement of drill sites to see that all requirements
are being met. Approval from Keller is also needed. We are monitoring both of those government entities.
Affecting Hidden Lakes, three drill sites have been proposed:
(1) Robert Black drill site (east of Rufe Snow, south of City Hall) is owned by Harding/Petrocasa
and is operational.
(2) Armstrong drill site east of Davis off Creek Road (behind Plant Shed) is leased by Harding/Petrocasa
and is scheduled to go to Keller for approval.
NOTE:Neither of these drill sites will reach ALL of HL, as a drill site can only out 6000'
in all directions from the drill head.
(3) Ashbrook drill site on SW corner of Union Church & 1709 is the proposed drill
site by Dale Resources / Chesapeake. This drill site COULD reach all of HL, but would require additional negotiations
as it will be so close to our HL boundary and some of our Ashbrook neighbors.
3. Impact on Quality of Life: No drilling is contemplated
on Hidden Lakes property. Drill sites could be sought anywhere in the area but must go through Keller P&Z and City Council
which ensures all Keller citizens will have an opportunity to voice their concerns. The Gas Lease coalition will work for
the best possible drilling conditions to minimize impact on residents of communities in the coalition. The coalition is not
seeking the highest prices to the detriment of our communities. Concerns such as noise, lights, truck traffic, etc., will
be addressed in any negotiation, recognizing the coalition will be limited in mitigating some factors, depending on actual
location and conditions approved by Keller.
4. Bonuses: The size of the bonus as well as royalities
are dependent on the projected yields, which are estimated but not proven for our area. Based on the results in nearby areas
as reported in the news, it is expected the size of the coalition and experience of the negotiating team will help not only
to obtain better financial terms than individual residents, but also in mitigating adverse drilling conditions.
If you have been reading the Star-Telegram, you have read what other communities west and
south of us have received. You can keep abreast of them on the Star-Telegram blogsite at http://startelegram.typepad.com/barnett_shale/. Our goal is to negotiate signing bonuses
near those already received.
5. Royalties: Harding/Petrocasa gave an estimate of
royalties to expect from a 1/5 acre lot, market gas price at $6 per cf, 20% royalty
percentage. Monthly payments would vary based on production and be higher in first year. Over 10 years (their
estimate, no promises, some wells are duds) could be $7400. Larger lots, negotiating a higher royalty percentage (25%
has been recent average), higher gas prices (currently near $9 per cf), higher production levels (their example was conservative)
would mean higher royalty payments.
6. Mineral rights: You can research whether you own the mineral rights to your property by going to http://ccanthem.co.tarrant.tx.us/search.aspx?cabinet=opr. The Grantor is the seller and the Grantee is the buyer. The most efficient search is done by typing
your LAST name in the Grantee block, then picking from the list of results. You can find your deed and save it as a
PDF file. Next repeat the search using the LAST name of the person (or entity) who sold you your property as the Grantee.
Repeat until you get back to identifying if the mineral rights were severed or, if not, retained.
What's Next: More
meetings are being scheduled with two, maybe three, more of the "major players" in the Barnett Shale production. We
meet next week with Chesapeake (Dale Resources) and XTO (Colt Exploration). We just became aware that Devon Energy is
interested in this area of DFW as well and will be contacted. The decision was made to limit attendance at these meeting
to "coalition" leaders which still makes for a group of 25-35 people at the meetings. Opening the attendance to all
residents is not feasible due to size of venue that would be needed. An update (like this one) will be sent following any
new developments.
We found a wonderful website with a lot of great links. Go to
www.NKNT.org (one of our coalition members) and click on Informational Links on the left. Have fun finding out "everything
you ever wanted to know about the Barnett Shale, but were afraid to ask!"
Communications:
The HL Database has email addresses for more than 90% of HL residents. Volunteers delivered copies of the last
Gas Lease Update to the others, encouraging them to supply the HOA with an email address. Many did.....so welcome to
these new residents, receiving HOA communication for the first time! Thanks as well to those volunteers who went door
to door, we appreciate your efforts! Please email gaslease@HLhoa.com if you are willing to deliver copies of this Gas Lease Update to those for which we do not have an email address.
If you rent your home in Hidden Lakes, please forward this gas lease
update to your landlord (owner of the property), asking them to email us at gaslease@HLhoa.com to keep informed of these developments.
16 February Update on Hidden
Lakes Gas Lease Situation
Note: This email is being sent to all residents in our database to try
and keep everyone informed. Since we don't have everyone's email, please pass this
information on to your HL neighbors. The developments since collecting the gas
lease specific mailing list last summer have made that list obsolete.
Your Hidden Lakes HOA cannot make recommendations
on whether to sign or not sign a gas lease offer you have received. However, a group of your HL neighbors
has been working, independent of the HL HOA, behind the scenes to research the gas lease / mineral rights situation and offer
information and opinions. The only part the HL HOA is playing in this venture is to use the HL database to email out
this information to homeowners. If you own your mineral rights YOU ultimately must make the decision on this matter.
However, it is obvious that if we band together as a group (within HL and with other neighboring communities, including Sky
Creek Ranch), we can negotiate for better bonuses and lease terms.
If you have been reading the Star-Telegram and/or Keller Citizen, you may know that the oil companies would
like to mine the Barnett Shale that lies beneath much of this area of Texas. They have already started drilling in many
areas south and west of us. In order to drill, the mineral rights must be secured. To complicate things,
the owners of the mineral rights may not be the same as the owners of the surface land. The drillers offer upfront gas
lease offer bonuses and pay a percentage of the royalties over a certain time period.
Although terms have varied and final details are unknown for our area, some neighborhoods in Arlington formed coalitions
and negotiated pretty healthy upfront bonuses ($15,000 & up per acre),
as well as higher royalty percentages (25% vs. commonly offered 20%). In addition, the length of the contract was negotiated
down to 3 years (from 5 years which is commonly offered) with an another second bonus for two additional years of
drilling. Click here to the Star-Telegram gas lease blogsite for LOTS more information: http://startelegram.typepad.com/barnett_shale/arlington_south/index.html
Because a drill site can only reach out so far, HL residents have been receiving gas lease offers from different
companies, those homes within that particular drill site's range. However, these signed gas lease contracts often change
hands before the final drilling begins. They may well end up in the lap of one driller, who knows?
Moreover, some landmen (brokers for various drillers) send out gas lease offers in "waves" and some of us
receive the same gas lease offers but months after the first of us receive them. Many in HL received $500 offers last
year from Batheastern (Llano Realty). Bloomfield and Meadows at Bear Creek received $2500 offers from DDJET (Harding/Exxon)a
few months ago. The eastern portion of HL received $6500 offers from XTO / Colt Exploration in early January. The objective
of the coalition is to obtain better terms, although it is too early to project what those might be.
After the first batch of gas lease offers went out last spring 2007, we had a meeting in June at the HL
Clubhouse with two attorneys (one lives in Woodlands,........see back cover of new HL directory), Elby Beal who is an owner
of Sky Creek Ranch golf course, Cindy Huey of Premier Management Company, and about 50-60 HL residents. Mr. Beal told
the crowd that SCR had been in negotiations with drillers/oil companies for the past two years and suggested we "sit tight"
and allow them to negotiate for them......and us.
When we went 7 months without any communication from Mr. Beal (and because of all the published information
on what coalitions in Arlington were receiving), several concerned HL residents decided to reactivate the Gas Lease Committee.
Just as we had our first meeting in early January, we heard from Mr. Beal that SCR was still negotiating, nothing to report.
The committee decided to press forward anyway, as many HL residents were receiving gas lease offers and were confused as to
what to do. They were asking for guidance.
The committee has spent the last month contacting neighboring communities to see if they wanted to join
the coalition, talking with the organizers of the Arlington coalitions, and gathering information on all the various landmen
and drillers who have been sending gas lease offers to our HL residents.
We had a meeting of the various HOAs in Keller on Monday evening. We will soon (hopefully, within
next two weeks)announce a meeting with XTO who seems to be offering the largest gas lease bonuses and most determined
to be the major player in Keller area. That meeting will answer any "final" questions you have. We
hope to provide you with most of the answers prior to that meeting. We are compiling on paper what we have
to offer XTO (number of neighborhoods, number of homes and/or acreage) and plan the final negotiation tactics. We currently
have a coalition of approximately 1000 acres, not including SCR who is negotiating separately but may join us. HL is
450 acres itself, with the HOA's common areas encompassing 43 acres.
We are proceeding with the assumption that the Barnett Shale under us is as valuable as in other places
(it would be on XTO to prove to us otherwise) and that we "expect" gas lease bonuses similar to those received elsewhere.
However there are many unknowns so there is no promise of any particular terms possible at this point.
Please continue to email gaslease@HLhoa.com with any new gas lease offers you receive (list the details - company, bonus, royalty percentage, length
of contract) so we can keep abreast of this fluid situation.
We will try to send weekly E-News bulletins for the next couple of weeks leading up to the meeting with
XTO and a possible signing party shortly thereafter. We appreciate your patience. Keep in mind, you are free
to sign whatever you wish. We just feel strongly that we can do better as a group and get much better
offers. Please gaslease@HLhoa.com to let us know if you have already signed a gas lease contract. |