ShreveCentreCoalition Newsletter

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SHREVECENTRECOALITION
AN ALLIANCE OF NEIGHBORHOODS TO NEGOTIATE THE BEST POSSIBLE MINERAL LEASE TERMS
November 12, 2008
To Our Homeowner Friends of the ShreveCentre Coalition:
We have been asked for an update on where things stand in our quest for Fair Mineral Leasing
Opportunities for all of our East Shreveport residents. Here is an abbreviated explanation
about:
The Competition: TwinCities, on behalf of Chesapeake, continues to produce a new business
plan each week. And each week's plan contains a new "statement." Some of these contradict
previous weeks' statements. First they met with the Coalition officials to discuss potential
leasing, next they cut off all leasing, now they want to lease some parts of East Shreveport.
Each statement seems to support a "rationale" why the Coalition is a Bad Thing, and only they
offer potential to the potential lessor. We suspect that each week's new plan is an accurate
reflection of their bank balance and each week's "story" is just that -- that week's story. We fail
to understand why some neighborhoods receive TwinCities offers of an upfront bonus, and
other neighborhoods no bonus at all.
OUR PROGRAM -- The ShreveCentre Coalition is completing its bid package to go to potential
energy companies. But before we could take our product to them, several of these companies
have already come to Shreveport to meet with us and tell us why they should be the company to
partner with the Coalition. They are eager to tell us why they offer both the best short- and longterm
potential for mutually- beneficial production of our Haynesville Shale gas. These
companies' offers are superior to those by Chesapeake in various Coalition neighborhoods. And
we haven't even begun negotiations yet.
We suspect some energy companies may try to use fear as a leveraging tool to convince
homeowners to give up their gas for little monies and highly unfavorable terms.
Knowledgeable oil and gas producers within the Shreveport-Bossier petroleum community
continue to extol the Coalition's founding principles and its market position. As a group of 40
neighborhood organizations and entities, our concept is strong, and our negotiating position is
as strong as ever.
The Texas oil and gas companies that approached us also confirmed our value. It is our
size that is most valuable to them, that we bring many, many sections to the table. That makes
it worth their while to get involved in Haynesville Shale gas production. A couple of sections
would not be worth their bother or investment. But . . . most of East Shreveport? That's worth
coming to Louisiana and drillin' some holes.
The Coalition believes that it still offers the best method for the average citizen in East
Shreveport to receive the fairest bonus and royalty payment for the gas under our properties.
Nothing has happened to change that position.
189 Pomeroy Drive Shreveport, LA 71115 ShreveCoalition.com

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Replies to This Discussion

Permalink Reply by The_Baron on November 14, 2008 at 8:59
They'll probally spend a ton of money and find the locations after 100 wells have already been drilled. There are many rumours about locations already negociated for waiting on the leasing to wrap up.
Permalink Reply by Skip Peel - Mineral Consultant on November 14, 2008 at 13:21
Possibly. My perception is that the City has done its homework. Not only in relation to qualifying drill site locations but to the challenges of urban drilling and production experienced in Fort Worth. I expect that the City will be sensitive to the concerns of citizens (read: voters or constituents) but, like the state, will be interested in getting the associated income.
Permalink Reply by Skip Peel - Mineral Consultant on November 14, 2008 at 14:05
KB. You have earned the right to ask me anything, anytime. Well, almost. If I am wrong in my perception of the administration's knowledge of urban drilling challenges and the need to protect the citizens they serve, I will be more than willing to admit my mistake. It will be much less painful than the wrath of the voters visited upon our mayor and city council if they prove to be less than capable of protecting their constituent's "quiet enjoyment".
Permalink Reply by sesport on November 14, 2008 at 16:22
Skip - thanks for that update, I've been pretty busy lately and appreciate the update. Is that from the coalitions website or directly from your association? I'll get that word out to my neighbors. I know that I feel more comfortable having my neighborhood aligned with SCC, don't want it to end up looking like the areas around Libbey Glass & the refinery. I expect responsibility on both sides of any partnership/lease agreement that I get into.
Permalink Reply by Skip Peel - Mineral Consultant on November 14, 2008 at 18:16
sesport. The newsletter popped up on my computer alerts today and I just passed it along as I had not noticed any SCC updates lately. I included the link to the Broadmoor Neighborhood Association (my neighborhood) because it had a downloadable letter of intent link for anyone interested. I am not too concerned about having weekly updates for the mere fact that, other than signing up any additional interested homeowners, there is not much to report or discuss. I do not expect any substantive offers to be made until sometime next year. I am in no hurry and suggest that everyone take a holiday break.
Permalink Reply by sesport on November 15, 2008 at 10:35
Thanks, I'd like us to take our time, too. Just some neighors get nervous. The Nabors 620 sign on the corner by Harts' Landing kind of announces that activity is close to our SE neighborhoods. In light of the news about Greenwood lessors, I don't mind that SCC is courting other interests. It's the best news I've heard, but neighbors are wondering. Not all have the patience, nor do they understand that not all things can be disclosed. BTW, if you follow the link to the Times blogpage at the bottom of the SCC website, that same info was published there.
Permalink Reply by Skip Peel - Mineral Consultant on November 15, 2008 at 10:51
I suspect that some land companies/operators are counting on the nervousness and lack of patience that you mention. I predict that bonus offers will go even lower over the next two months though not quite to the levels exhibited in the November state auction bids. There will be a concerted effort to spread the notion that bonuses can only go down from this point on. And that those who wait will only get less. Or be left out altogether. There is no evidence or logic to support either assumption but some landowners will succumb to the fear of one or both.
Permalink Reply by Skip Peel - Mineral Consultant on November 15, 2008 at 12:47
That's a little too dramatic for my tastes, KB. It is a business strategy. And one with some merit as it has worked before. Numerous times. The main difference this time around is the Internet. And the opportunity to educate and communicate to landowners that they are involved in a business negotiation. Demonizing the O&G industry may elicit a lot of "amens" but does little to encourage land/mineral owners to understand the advantages that they possess and the nature of how the industry operates. Knowing your opponent's tactics, motivations and their weaknesses is the key to being a successful negotiator. The O&G industry has honed those skills over a hundred years. They are a formidable opponent. But they do not hold all the cards. Landowners have some cards to play also. They just need to know how to play them. Extending that analogy, the industry has some favorable cards showing and now they are ready to bluff. Hoping that their opponents are impatient, nervous and feeling totally out of their element. As I said earlier, a stratagem that has worked for decades.
Permalink Reply by Skip Peel - Mineral Consultant on November 15, 2008 at 13:43
This playing field will never be level. But metaphors that foster a sense of futility may lead some to fold a good hand. Landowners do not need access to seismic or geologic information to play their cards. They do need professional help. And the ability to afford top notch professional assistance is the true value inherent in the dynamics of a group approach. Get the best and split the bill.
Permalink Reply by Skip Peel - Mineral Consultant on November 16, 2008 at 2:32
It is not a wise decision to sign a standard O&G lease form. Have an experienced O&G attorney draft one to meet your personal circumstances and concerns. Or amend the company's lease form to accomplish the same.

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