Replies to This Discussion

Permalink Reply by Skip Peel - Mineral Consultant on November 13, 2008 at 16:50

Broadmoor Neighborhood Association web link: http://broadmoornashreveport.com/?p=980

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Permalink Reply by Skip Peel - Mineral Consultant on November 14, 2008 at 4:13

KB. I too am a resident of "east Shreveport" and I would prefer to keep CHK at the negotiating table as they provide competition. And competition raises value. I do agree that they have created a sense of suspicion through their recent missteps and that should be a factor in which operator is ultimately chosen. CHK has some good points particularly in their expertise at drilling and producing horizontals. In a recent report of operators ranked by the number of horizontal completions, CHK had 922. The next was Devon at just over 600 and EOG with slightly less than Devon. I would deduct a little from CHK's score as to the offer they may make for the SCC leasehold but I wouldn't count them out. I certainly would not enter into an agreement to lease with them unless there was specific language in the lease designed to avoid the payment and poor communication difficulties that have plagued their recent lessors. And I would not condone negotiating or signing through a "middle man". I think it within the realm of possibility that much of the current problems are inherent in that type of scenario. I do suspect that negotiations and leasing with CHK will come through Twin Cities and do not find that to be a concern.

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Permalink Reply by The_Baron on November 14, 2008 at 4:05

Sounds like the shrevecoalition is worried about losing members now that they missed the gold rush.

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Permalink Reply by Grice on November 14, 2008 at 4:18

I agree, but that could be a good thing. That worry may stem from concerns that members will fall for the insinuation that the minerals are of less value than they were in the recent past. Also, as more people fall prey to that notion, and remove themselves from the coalition, it weakens the position of the coalition. It would be irresponsible for the coalition to ignore the possibilities, and do nothing to safeguard their member's best interest.

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Permalink Reply by The_Baron on November 14, 2008 at 4:26

The colalition should have leased this summer. In the oil and gas buisness time is never on your side.

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Permalink Reply by Skip Peel - Mineral Consultant on November 14, 2008 at 4:40

One of the drawbacks inherent in groups, especially ones as large as SCC, is that they are not capable of moving quickly by their very nature. That drawback is off set to some degree by the increased value of such a large mineral asset. I do not fault the leaders of the Coalition for "missing the gold rush". I would fault them if they rushed into any leasing agreement that does not recognize the unique circumstances and value of the minerals they represent.

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Permalink Reply by The_Baron on November 14, 2008 at 4:56

I disagree, While I am all for neighborhoods organizing as it is good for both the lessors and lessees, A group as large as shrevecenter may be to large to be effective. With such a wide patchwork of mineral interests that in many cases are not contiguous, i see more minuses than pluses. For instance, what if a large company is only interested in a couple of sections. Would they be willing to split these areas out fromm the main group to get a better deal for some of their members? Or would they be more worried about reducing their membership?

I blame shrevecenter for misleading a good friend of mine. He lives in broadmoor and had an offer on the table this summer. They offered good terms and a high bonus and royalty. I advised him to take the offer, he did not. He instead joined shrevecenter. Now the leaseing has stopped. Previous offers are no longer on the table. He could have leased now for a three year lease, and maybe leased again. Instead he has nothing.

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Permalink Reply by Skip Peel - Mineral Consultant on November 14, 2008 at 5:19

You make a good point, Baron. In the rush to favor the perception of the group concept of maximizing value and having others, thought more knowledgeable by many, do the organizing and negotiation at no cost to the homeowner, there seemed to be a lack of recognition of how operators think and do business. Groups that do not represent landholdings of closely similar size and nature, contiguous property, and location within the same section lines, sacrificed much of the supposed advantages of a group. The ability to act quickly is certainly a drawback to the group concept. I do think that the SCC avoids the first drawback. And subgroups organized of holdings within the same section would make sense. The one advantage that remains in my opinion is the large developmental area represented by the SCC. It will remain attractive to those most capable operators willing to take on the added cost of developing in an urban environment. And the mind set of those of us with a quarter acre may be that current bonus offers without an increase in royalty, just aren't that important to us. Development in urban area could very well be several years away. I place no blame upon SCC for missing the earlier spike in lease offers and do not feel that they mislead me. At the end of day, every mineral owner must make their own decision. I do not fault anyone who leased this summer, with a recognized capable operator as opposed to relatively unknown middlemen, as it is their decision and should be respected. It is certainly possible that we will all look back and see that they made a reasonable choice.

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Permalink Reply by The_Baron on November 14, 2008 at 5:15

So its ok to drill out by the country folk but not in town?

Just where is it ok to drill KB?

I'm not saying that leases shouldn't include protections for quality of life. But like it or not the drilling will come.

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Permalink Reply by Richard Shreve Island on November 14, 2008 at 7:24

The Baron is right. The hard reality is money makes the world go round. Soon as it profitable drilling will start. Politicians will have their palms greased. Public land leases will generate wealth for thier deficit spending and supporting thier pet projects. So, expect wells to pop up like mushrooms.

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Permalink Reply by The_Baron on November 14, 2008 at 8:12

Drilling in urban areas is nothing new. Just look at los angeles. The rigs there are shielded from view with sound dampning materials.

The rigs themselves aren't going to be in your back yard. They drilling companies have required setbacks from occupied dwellings, and they also require an area on suffiecient size to accomadate the rig, reserve pit, crew quarters, mudlogging truck, as well plenty of room for completion operations. I wouls imangine that we would see some of the "superpads" that CHK talk about located in commercial or industrial zones.

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Permalink Reply by Skip Peel - Mineral Consultant on November 14, 2008 at 8:46

The City of Shreveport has conducted a study to identify potential drilling locations within the city's limits that would meet all the regulations for set backs and operations.

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