Replies to This Discussion

Permalink Reply by Eric S. Clarke on September 9, 2010 at 9:21

We did ask for the water protection clause. As far as sueing over water contamination, I guess you havent seen the documentary GASLAND from HBO. We dont have the billions the gas companies have to drag it out in court, and the way the law reads is that we have to prove they contaminated the water. This being done at our expense and pay thousands to just have testing done which they have circumvented that in court too. I highly suggest that you view the documentary "GASLAND". That is one of the main reasons the State of New York has issued a drilling mortetorium on drilling in the State and in any proximity to the natural water shed that supplies the state with water. They say they are safe drillers well then why wont they put it in writting like we have asked so many times before.

Furthermore I only own a quarter of an acre of land in the area of East 80 coalition. I have not and will not charge any of our members any percentage of thier bonus or royalty as so stated in the letters of intent for the coalition. There are many other protections that we asked for and have been declined ie shut-in royalty, noise abatement, and many others, to include some civil rights that are stripped from the mineral owners if they sign the generic lease that the companies have been offering.

Also, i saw where someone one this discussion said they got 8k an acre well that is what they were offering initally out in the East 80 area and after we got started quickly jumped thier price to 15k an acre back in 2008. They say they arent going to pay the same figures due to the drop in gas prices well why then were they paying those same higher figure in the Barnette Shale back before 2008 when gas prices were at 4-7 dollars like they are now? Those fuigures were obtained from the federal government of gas prices at the well head during those 20-25 k bonus per acre in the Barnette Shale.

We aren't asking for anything they arent saying they can do or have given in the past, we just wont them to put it into writting to make civil court protections a little easier for our community members and not having to attempt to battle the billion dollar industries staff attornies over possible legal rights that arent exactly written clearly like in a contracted lease.

Yes, there are still some of us that arent trying to turn a buck but truely trying to educate and help protect our communities and its residents. I have been doing it for 18 years now as a public servant as a professional firefighter and the last 14 as a firefighter/ paramedic. to also include volunteering in my community as a firefigther/paramedic. I also spent 6 years honorably serving my State and Country as a combat medic in the National Guard. What have you done for your community?

Sincerely and Respectfully,
Eric S. Clarke

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Permalink Reply by The_Baron on September 9, 2010 at 10:21

While I truly appreciate your service Mr. Clark, I don't see how it is relevant to Oil and Gas Leasing.

Also, I am am amused you would even bring up GASLAND. It is is really not a documentry, more like propaganda. Personally I think we should cut off New York States gas for a few weeks this winter to smarten them up.

I would argue that the price of gas was not as important to the runaway bonus $$ as was the value of being able to brag to wallstreet the amount of acreage held in resource plays. The land rush here in Northwest LA had nothing to do with geology or economics, it was a rush fueled by money from investors and traders who do not understand the oil and gas buisness, propped up by msome hefty looking production #'s. Time will tell if the HA is economnic or not. I can say at sub-$4 gas it is in many cases not.

I also find the idea of water protection clauses entertaining... What additional protections do you require that the Office of Conservation, DEQ, EPA does not?


" There are many other protections that we asked for and have been declined ie shut-in royalty, noise abatement, and many others, to include some civil rights that are stripped from the mineral owners if they sign the generic lease that the companies have been offering."

Who cares what you asked for and were declined? This only reinforces my point that organizations like yours offer no benifit over what an informed individual could obtain on their own.

I have had the privilidge of dealing with sofisticated landowners who managed quite well on their own. A little time invested in educating yourself is all that is required as we are fornate to live in a state with a long rich history of oil and gas exploration. There are many out there with real life experiance who are often, As I have been to offer free advice. I applaud your attemts and effort to do the same to educate those who ask for help. However, I am of the opinion that large coalitions are counter productive and not in the best interest of the mineral owner. I stand by that belief, and the stories I hear from the landmen only reinforce my belief.

Furthermore, before I am accused of self promotion or somthing, I also want it to be known that I am not currently involved in leaseing the HA shale.

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Permalink Reply by Two Dogs, Pirate on September 9, 2010 at 13:05

Eric, I thank you for your service to our nation. I have to agree with Baron, somewhat. I can give examples of people that held out in the Austin Chalk and got nothing. It is true that a mineral owner should push for the best deal but when it comes to a no noise area, give me a break.

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Permalink Reply by Henry on September 9, 2010 at 23:12

I've been holding off here, and finally will jump in. When I think back to the summer of 2008, I recall how Shreveport was using the Barnett Shale as a way to learn all about how to live with, while encouraging, urban drilling. And one of the big lessons at that time was that huge neighborhood coalitions in the Barnett Shale were getting the best leases (bonus, royalties, and protection). The evidence from the Barnett was that coalitions were the way to go. Many of the big coalitions in Shreveport lost out for no other reason than the economy tanked before they could fully organize and negotiate. It's no one's fault. Yes, some individuals who went on their own and leased got money. But, if the economy hadn't tanked, and the coalition went out and got more, then we wouldn't be beating on Mr. Clarke.

I view this as a case of unpredictable events leading to one result, i.e., no deal for East 80. Had the events gone the other way and the economy didn't tank until 6 months later, the East 80 people might all received a ton of money.

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Permalink Reply by Larry T on September 10, 2010 at 2:05

Good point Henry, but until Mr. Clarke can answer the Barons questions with a factual answer, you have to assume the Baron is correct and Mr. Clark pays too much attention to propaganda and incorrect facts instead of making his own decisions based on facts.

My only question is who is heading these coalitions or neighborhood organizations and are they making money off the deal they are supposed be making and did it cost them when the deal fell through?

In other words, how much skin do they have in the game?

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Permalink Reply by Mac Davis on September 10, 2010 at 2:17

I know one neighborhood group near me that held out until they got pretty good bonuses and percentages. They also got everyone real checks for signing, not bank drafts.

The bust happened shortly thereafter. Lots of folks who got bank drafts got scammed. Those who were still holding out kicked themselves.

If you were in one coalition, you made out like a bandit. In another coalition, you lost big. I doubt the people running one coalition were that much smarter, they may have just had good luck on their timing.

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Permalink Reply by The_Baron on September 10, 2010 at 3:49

I am not saying that neighbors should not band together. I think small mineral owners could indeed benifit. However, I am knocking the large one size fits all coalitions. You just can't convince me that banding together with owner miles away could help in bargining for my personal situation.

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Permalink Reply by Skip Peel - Mineral Consultant on September 10, 2010 at 2:15

Before we get too off course here and turn this into a pissing match, I'd like to expound upon how the East 80 group is, IMO, a cautionary tale illustrating the pit falls of group negotiations. How a group is organized and lead are the key points. Too many groups placed an emphasis on number of members, number of acres without concern for the location and surface characteristics of the tracts. A group comprising the whole of a section or something very close to 100% is good. A group with tracts scattered across numerous sections especially where none approach 100% is not good. The protective lease clauses that a rural tract may need are different from a residential lot. Think No Surface Use for example. The rural tract may need it while it's a moot point for a residential lot. Knowing how to package the group minerals is essential to getting a good lease and quite importantly, getting it in a reasonably short time frame. Needless delay can kill the whole deal. Groups lead by those having no experience in dealing with the industry nor competent professional assistance tend to have problems making good decisions. If those leaders are inexperienced and have a hatred of the industry and have a leadership style that demonizes the industry, it's a recipe for disaster. The Ft. Worth area groups that received the impressive bonuses were lead by experienced professionals.

Yes, Groups can be beneficial but only if they are properly organized and lead. Many were not and that should be obvious in retrospect. It is a real disappointment that the quality of the rock in the Haughton area turned out to be less than the best quality. I'm sure that no group members ever realized that their minerals were anything but a sure thing. That is especially disappointing as the Blanchard area had already demonstrated the pit falls of that mind set. For those who wish to use this discussion thread to lay off blame or pound the "other side", that is your prerogative. The true value of this discussion should be to help other groups avoid the mistakes that were so prevalent the first time around. The leasing boom may have abated but the opportunity for mineral owners to form negotiating groups remains for some.

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Permalink Reply by Catfish on September 10, 2010 at 4:04

Great post Skip, this is a learning forum. This area has gas and will be produced when the economics becomes favorable for production. Hopefully when this occurs the East 80 group will be better informed.

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Permalink Reply by Catfish on September 10, 2010 at 4:16

Oh by the way a pissing match now and then adds some fun!

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Permalink Reply by Skip Peel - Mineral Consultant on September 10, 2010 at 4:44

Catfish, you sound like Keith! I think he gets bored when things are a little quiet. It is my hope that Mr. Clark and the East 80 group do not take this thread personally. I know it's not comforting to be used as an example of how not to negotiate a group lease but my concern is for future groups to learn from prior misconceptions and mistakes. Those acting on behalf of a group assume much responsibility. They must be knowledgeable and professional. And they must be honest with their group members. By that I mean that if one sub-group is in a position to lease, they shouldn't be waiting around trying to force the O&G company to make the same offer to other sub-groups that are not so situated. Get that deal done and then continue working on the next and the next with the hope to get everyone an acceptable deal before something unforeseen may happen. A sure way to drag out negotiations and get less than an optimal deal is to try and force a company to take more than what they wish to lease.

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Permalink Reply by The_Baron on September 10, 2010 at 5:06

Good post.

The biggest change in my opinion, is that companies are no longer out to lease anyone they can get. They want to fill in their blocks and drill their existing leasehold.

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