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Permalink Reply by Bill G on September 2, 2008 at 12:04

Jim, do you think that if you are in a large non geographical focused group could this hurt your negotiations, lease amounts, or even royalty possiblities? What I mean by "Non Geographical focused group" is a group made up of various Land owners not in any one given section or even the same Range?

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Permalink Reply by Kassi on September 2, 2008 at 22:45

I just finished negotiating a deal for a Desoto Parish group of over 150 land owners. I limited the group to a sections within two specific townships and ranges with the exception of a couple of 100+ acre tracts in another township and range in Desoto Parish. I met with my group multiple times and worked out the terms that were important to them based on their particular circumstances. I then negotiated with the O&G Company rep. Given the amount of work involved in organizing a large group, keeping everyone informed, educating everyone and meeting the needs of a diverse population I can see why the land man appreciated the group dynamic.
The flip side of the group dynamic is that some compromise has to occur. If the group as a whole is not willing to stand together and walk away together if need be, then your bargaining power is reduced. We were blessed that our group was very cohesive and hashed out details early on. I can tell you the lease bonus and royalty percentage were the easier portion of the negotiations. The land, environmental, quality of life and land owner protections were where the difficult and time consuming negotiations came into play. Knowing my group well allowed me the luxury of knowing what to be willing to walk away from the deal over.
I felt it was important to limit the geographic boundaries for several reasons. Different O&G Companies are interested in different areas. I did not want to develop a significantly scattered group then have to sacrifice one part of the group for another. By limiting the geographic area I eliminated that problem. I also felt it was important to foster a sense of community among the group. This becomes more difficult if the group spreads beyond certain boarders. Also, in my oppinion education is very important when representing a group. People need to understand what the drilling process is about, what may happen to their land, how the business operates, what environmental, financial, quality of life and other impacts signing a lease can have for them. A mega group is harder to provide quality education for. (I am not saying it cannot be done, it is just not as intimate).
Also, this group was rural neighborhoods. The needs are more diverse in this type of setting than in an inner city environment. We had to look at things like water well protection and livestock issues, etc. Putting an area like that in the same group with an inner city neighborhood did not make sense to me. A mega group in town may work better if well organized, with strong leadership structure, in the country setting I feel limiting groups to geographic region (i.e. township and range or region in town) is a wise approach.

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Permalink Reply by thurmond on September 3, 2008 at 5:48

My group is a large land group as Bill calls it. So y'all are saying that we should expect most gas companies only to work with us if they pick and choose what they want to from what our group has on the table? Have there been any group hold out and make them take it all?

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Permalink Reply by Snake Stewart on September 3, 2008 at 6:26

Good question Thurmond , Nobody seems to have even attempted to apply this technique as of yet, other then my own stupid self. It probably wont work due to the fact that people have to actually trust each other. Difficult proposition considering the fact that these large groups could represent $70 million + in bonuses alone. What group ? If you don't mind my asking.

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Permalink Reply by Bill G on September 3, 2008 at 6:39

Thurmond and Snake, you guys both have good points, but when you are dealing with that much money at stake the hard part is building that trust and relationship with each individual and you almost cant do that without some type of written committment. The problem with this commitment is that each individual in the group has there on expectations.....and each individual O&G company has there own expectation also. First off I am glad I am not one of these large group leaders, especially if it is non profit......there is just so much to loose and so little to gaine.....when dealing with peoples finances they will never be 100% satisfied...especially when you are talking about this volume of people and this type of money and expectations....I tip my hat...to those who are taking leader ship, but would becareful not to make promises that you cant keep and have no control over!

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Permalink Reply by Snake Stewart on September 3, 2008 at 9:15

Hello Mr. Bill , I haven't made a promise that I can't keep , nor will I. The main problem stems from people wanting 2 years from now money , yesterday !

This is going to offend but the way my week has gone I really don't give a flip anymore. I should be acting in a more professional manner.One problem with that is I ain't no professional and I have never tried to fool anybody into thinking that I was.But if you believe that I don't know what I am talking about in regards to this play , you are quite mistaken. This in no way is directed at you Mr. Bill or anyone else involved in this diologue as far as that goes.

The main problem that continues to elude the naysayers in regards to big groups is the fact that small groups have been under continual assault ,just like the next door neighbors and the people that are across the street from each other , that are trying to deal in good faith with the O&G's.They are offering different amounts! Not for people in a certain section but people on a different end of the street.They want to break everything into parcels that can be easily swallowed up.When someone can explain this to me I may have to rethink my approach.

It boils down to this...You can not deal in good faith with someone that wants it all ! O&G's want it all. Thats not mean. Its a fact. It doesn't bother them to behave in this manner , why should it bother me to say it. It simply will not work out in your best interest.

You do not have to view this as I do. I hope that you don't in many regards. But at the end of the day , the people that stand with each other as one, will benefit far greater then the ones that are looking to be friends with the O&G's.There are groups all over the place now and thats a good thing. Jelly legged people will reap jelly legged results tho.Make sure that you are behind your group leaders. Do not be a passive member. Do everything in your power to help the people out, that are trying to help you. That certainly isn't too much to ask is it ? Sometimes when you tote your feelings a little to far out in front of you , it can hurt when people question your gumption or passion for that matter. The people I am refering to that want something for nothing and wont even help in the proces. Just kick you whenever they get the chance. Toughen up and suck it up ! The O&G's will make these people look like clowns!

I love this Forum. This forum has helped untold thousands of people and will be looked at in the future as a valuable insight into human nature as well as a look at the inner workings of the people involved in the most historic financial windfall in modern times.There will never be another opportunity like the one that faces us right now. Not for us peasants anyway.

To everyone that I have ever offended on this site, even you Mr. Ed , I am sorry. I know of no other way then shouting when I am trying to get someones attention. Not the best approach but thats neither here nor there. Even when something was said out of anger, it was simply out of frustration , not out of spite, for the most part I guess. If someone decides to stick with swamo, they will have leadership that will stand beside them and tell the O&G's what we will or wont accept. We will tell them no until it is good for both sides , not just them. This is ours after all !

To everyone that may still frown upon ole Snakestewart , find another goat to blame life on cause I'm outta here.

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Permalink Reply by Bill G on September 3, 2008 at 10:04

Great input snake....that is why you are so important to your group! My reason for starting this topic wasnt to target the strategies of different groups.....just to get the opinions, history and facts on the topic, and we deffinetly have yours MR STEWART as we always do! These people on this forum have the right to know the pros and cons of these groups even if some people dont agree....good things come from debate!

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Permalink Reply by thurmond on September 3, 2008 at 7:02

Your right. I know people gt upset about money. Never satisfied is right! But my concern is including everybody. I think folks get in a group to make sure they are included in what ever happens. But it sounds like some can get left out if the companies just deal for certain sweet spots in the group but not others. If part of the group gets a lease and part don't then all #&*$ will break out.

My large group is in south Shreveport Snakestwart. I think it is okay because we are all in one section. Just a lot of us because of small lots. My real concen is for parents who are in rural area to the east of here. They are considering what to do and what kind of group to get into. If the companies only want to lease up a whole section at a time, I suppose they should stay with theiur close around sections. I don't know what is avaiable in their area.

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