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Permalink Reply by The_Baron on April 21, 2009 at 4:12

Round 2.

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Permalink Reply by The_Baron on April 21, 2009 at 6:30

I saw it, but is it accurate? Sounds far fetched to me.

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Permalink Reply by W P on April 21, 2009 at 8:30

I love this post I believe it is so true:

"I got a call from some of our members that JPD is back at it in sections 8 and 6; others are active in 16 and 22. JPD is offering 2000 per acre or about 500 per quarter acre lot. I called Chad Burks this morning. He told some of our people that I, Mr. Merrill, turned down their offer therefore they are doing business only with individuals. That is a bald faced lie. He tried to get me to swallow that we were offered 12,500 on acreage in the past. It never happened ever.
At all the meetings we had our Chairpersons were present. We never received an offer ever until after the deals ended and Jim Forney offered 1000 per acre for all our acreage. That was on Monday after they paid 15K to the people in the same section 10 and not to us.
So while it is always your choice I would not lease at these prices not even in this market and would wait on the payout. This asset will be here for decades and will pay huge returns. The times will change for the better. I don’t know if it will get worse first or not but the asset is there and will not go away.

The shale in SW Shreveport is 1400 feet thick. The wells are excellent. There have been 3 zones identified in the Haynesville Shale that are considered different units. The only unit in our immediate area Chesapeake is completing in is the upper most segment. The best Pay Zone of the three is the one that has more lime in it. Why? Hydrochloric Acid will literally eat Calcium Carbonate to nothing but fizz in a heartbeat. It creates Permeability to a better degree in the limier zone. The huge well PetroHawk made on the sample land is an example. It produced 712 million cubic feet of gas in ONE MONTH. 8 OF THE 44 PRODUCERS DID IN EXCESS OF 100MILLION cubic feet of gas in December.

In reality nothing has changed in the Haynesville shale as far is the long-term value of the resource is concerned. The market for gas is down because the anticipated usage is forecast to drop due to the economy and industrial decline. Do not believe the lies that are frequently told by land men. Mineral owners do come backing after payout. THERE IS NOT 200 PERCENT RULE AS SOME ARE TELLINY YOU. That only applies to lease holders (as opposed to mineral owners) who do not pay their way down. Then they MAY BE subject to a 100 percent ‘RISK” factor. You are not leaseholders you are mineral owners. You come in for 100 of your interest at payout of the well.

I would hold off leasing at these prices for now. Who knows where the economy is going but over the long haul this shale is one of the greatest natural resources in the world and by far the best in the USA. You will only have one chance to lease after that the minerals will be held for decades with production.

The coalitions need to stick together. I read a letter that said “Twin Cities i.e. Chesapeake, will only deal with individuals and not coalitions. IT IS NOT THEIR CHOICE. They can choose not to do so BUT YOU OWN WHAT THEY WANT AND YOU CALL THE SHOTS. THEY ARE DESPERATLY TRYING TO LEASE EVERY ACRE THEY CAN GET AS CHEAP AS THEY CAN GET IT. THEY WANT YOU TO BELIVER THAT THEY CONTROL YOU AND THAT IS SIMPLY BALONEY.

I strongly recommend to the coalitions that they turn down these offers and let them drill and carry members in the well. You realize that I get nothing if we do not lease YET I STILL AM MAKING THIS RECOMMENDATION unless they come up to what we want.

Now the world has really changed but we should hold out for better up front money. We will not get what was being paid last summer but somewhere in between is reasonable.

The world population is growing and forecast to go from the present 6.9 billion to 9 billion in just a few years. Demand for all commodities will rise. Be aware that this is viewed as a battle between the companies leasing and you the mineral owner. They come out with great PR and lots of BS to spread around but it is all about profits and power in the industry. Of those I have dealt with Petrohawk has been the most level. Yes they too quit leasing but they did keep all contractual agreements and they have lied the least and least the land firm I have dealt with. They are also having the best success as to production in the Haynesville Shale.

My best Jerry Merrill"

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