BONUS PAYMENTS DEPEND ON MANY FACTORS-SHREVEPORTTIMES.COM ARTICLE -12-22-08
shreveporttimes.com
December 22, 2008
Bonus payments depend on many factors
By Bobbie J. Clark
bobbieclark@gannett.com
All land is not created equal.
Just ask a landman or someone who is negotiating a mineral lease.
Bonus payments for leases have varied, with reports of people getting more than $15,000 per acre, while others have gotten offers of around $5,500 per acre.
Allan Seabaugh, a local oil and gas attorney, drafted clauses for a lease with Petrohawk Energy Corporation worth $16,550 an acre for neighborhoods around Ellerbe, Norris Ferry and Wallace Lake roads.
Competition was the primary reason they got so much, Seabaugh said.
They were able to pit Petrohawk and Chesapeake Energy against each other, driving the price higher and higher. "They bid hard for it," he said. "We were pretty fortunate."
There are several factors that go into lease bonuses, including accessibility to a drill site and pipelines and contiguous acreage, Seabaugh said. Rural communities will probably get the higher prices because there are fewer people with more acreage, he added.
Clay Baskin, director of public relations for Twin Cities Development, said it is easier — and cheaper — for them to deal with one person who has 300 acres, instead of hundreds of people who have a tenth of an acre each.
Twin Cities handles lease acquisition for Chesapeake, which has the most land under lease at about 550,000 acres.
"There's a lot less legwork," he said. "It cuts down on our overhead costs."
Twin Cities' initial offer for landowners is $5,500 per acre, but that number is not set in stone.
For example, The Times has reported the Dogwood Homeowners Association recently made a recommendation to accept Twin Cities Development's offer of $8,750 per acre, if 90 percent of the Dogwood community signs leases.
The Greenacres Place neighborhood in Bossier City has gotten Twin Cities' standard offer of $5,500 per acre, if 90 percent of the neighborhood signs, according to the latest offer sheet.
Baskin said people who live in more urban areas have a better chance to sign a lease if they come to them with a large tract of land.
That's exactly what the ShreveCentre Coalition is trying to do.
Currently, it is made up of 16 neighborhood associations in Shreveport.
Larry Farley, one of the group's organizers, said few neighborhoods in Shreveport have gotten — much less signed — a mineral lease.
"We're still getting organized," he said. "One of the neighborhoods now in the coalition ... previously put a package together and went to Chesapeake. They told them to get with some other (neighborhoods) and come back."
That's easier said than done. Many don't know who to contact or where to get started.
Ora Hart, president of the Cedar Grove Neighborhood Association, said her community has yet to receive any lease offers.
"I went to a meeting, but they couldn't tell me who was working in Cedar Grove," she said. "We should be getting something. Cedar Grove is such a large area."
The South West Shreveport Home Owners Coalition is another group of neighborhoods that has banded together to negotiate mineral leases.
Jerry Merrill, an oil and gas professional, has helped several neighborhoods in the coalition negotiate leases.
The latest lease bonus he negotiated netted $10,750 an acre. However, he has heard of much higher numbers. Without being specific, he said a church off Kingston Road got $17,500 an acre.
He also has heard of someone getting $25,000 an acre for 12.5 acres.
"They are paying insane money for these properties," he said. "This whole area is blessed."
Tom Dark, chief administrative officer for the city of Shreveport, advised that people will be best served by joining one of the two neighborhood coalitions in town.
"If not, then people can go door to door to see if they can find some neighbors to join them," he said.
The more neighborhoods that come together, the better the price will be when negotiations come around, he added.
Dark said there was a time when the highest bonus numbers were hovering around $10,000 an acre. Now, the big ones are at $20,000.
"It's clear the market is still interesting," he said. "There is a limit. We just don't know where it is. We were told sometime ago that it might be the upper teens or low 20s."
Additional Facts
RELATED LINKS
Petrohawk Energy Corporation: http://www.petrohawk.com/home/
Chesapeake Energy: http://www.chk.com/
December 22, 2008
Bonus payments depend on many factors
By Bobbie J. Clark
bobbieclark@gannett.com
All land is not created equal.
Just ask a landman or someone who is negotiating a mineral lease.
Bonus payments for leases have varied, with reports of people getting more than $15,000 per acre, while others have gotten offers of around $5,500 per acre.
Allan Seabaugh, a local oil and gas attorney, drafted clauses for a lease with Petrohawk Energy Corporation worth $16,550 an acre for neighborhoods around Ellerbe, Norris Ferry and Wallace Lake roads.
Competition was the primary reason they got so much, Seabaugh said.
They were able to pit Petrohawk and Chesapeake Energy against each other, driving the price higher and higher. "They bid hard for it," he said. "We were pretty fortunate."
There are several factors that go into lease bonuses, including accessibility to a drill site and pipelines and contiguous acreage, Seabaugh said. Rural communities will probably get the higher prices because there are fewer people with more acreage, he added.
Clay Baskin, director of public relations for Twin Cities Development, said it is easier — and cheaper — for them to deal with one person who has 300 acres, instead of hundreds of people who have a tenth of an acre each.
Twin Cities handles lease acquisition for Chesapeake, which has the most land under lease at about 550,000 acres.
"There's a lot less legwork," he said. "It cuts down on our overhead costs."
Twin Cities' initial offer for landowners is $5,500 per acre, but that number is not set in stone.
For example, The Times has reported the Dogwood Homeowners Association recently made a recommendation to accept Twin Cities Development's offer of $8,750 per acre, if 90 percent of the Dogwood community signs leases.
The Greenacres Place neighborhood in Bossier City has gotten Twin Cities' standard offer of $5,500 per acre, if 90 percent of the neighborhood signs, according to the latest offer sheet.
Baskin said people who live in more urban areas have a better chance to sign a lease if they come to them with a large tract of land.
That's exactly what the ShreveCentre Coalition is trying to do.
Currently, it is made up of 16 neighborhood associations in Shreveport.
Larry Farley, one of the group's organizers, said few neighborhoods in Shreveport have gotten — much less signed — a mineral lease.
"We're still getting organized," he said. "One of the neighborhoods now in the coalition ... previously put a package together and went to Chesapeake. They told them to get with some other (neighborhoods) and come back."
That's easier said than done. Many don't know who to contact or where to get started.
Ora Hart, president of the Cedar Grove Neighborhood Association, said her community has yet to receive any lease offers.
"I went to a meeting, but they couldn't tell me who was working in Cedar Grove," she said. "We should be getting something. Cedar Grove is such a large area."
The South West Shreveport Home Owners Coalition is another group of neighborhoods that has banded together to negotiate mineral leases.
Jerry Merrill, an oil and gas professional, has helped several neighborhoods in the coalition negotiate leases.
The latest lease bonus he negotiated netted $10,750 an acre. However, he has heard of much higher numbers. Without being specific, he said a church off Kingston Road got $17,500 an acre.
He also has heard of someone getting $25,000 an acre for 12.5 acres.
"They are paying insane money for these properties," he said. "This whole area is blessed."
Tom Dark, chief administrative officer for the city of Shreveport, advised that people will be best served by joining one of the two neighborhood coalitions in town.
"If not, then people can go door to door to see if they can find some neighbors to join them," he said.
The more neighborhoods that come together, the better the price will be when negotiations come around, he added.
Dark said there was a time when the highest bonus numbers were hovering around $10,000 an acre. Now, the big ones are at $20,000.
"It's clear the market is still interesting," he said. "There is a limit. We just don't know where it is. We were told sometime ago that it might be the upper teens or low 20s."
Additional Facts
RELATED LINKS
Petrohawk Energy Corporation: http://www.petrohawk.com/home/
Chesapeake Energy: http://www.chk.com/
Views: 161
Replies to This Discussion
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Permalink Reply by BirdDawg, plain ole' idiot on
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Naw,
I'm going to put my patch on my eye now.
Then I'll be a pirate.
Arrrgh
(as Earl would say) -
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Permalink Reply by Two Dogs, Pirate on
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Sometimes Earl says it best.
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Permalink Reply by sesport on -
Ask Mr. Stewart to forward you the video clip of the guy that got a bh as a Christmas present. You'll be entertained. LMAO
BTW, would you agree with Skip that there will be some surprises in leasing in early 2009? Do you think it will be on the positive or negative side? I'm still waiting to see what happens in my section, but the drilling & leasing is getting closer every day. Thanks for your thoughts.
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Permalink Reply by Dorcheated A1 on
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So Snake has got the tape. I'm ready for a good laugh, I could use one now that Fed Ex has pissed me off.
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Permalink Reply by sesport on
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I can't reply to you, dc. Here's a link, but not sure if it will work. If you're waiting a reeeaaallllly long time for Fed Ex, you can go back & start at part 1 for entertainment. Enjoy!
http://video.aol.com/partner/cmt/cmt-shows-12-days-of-redneck-chris... -
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Permalink Reply by Dorcheated A1 on
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Don't worry. I have 50-60 packages on my dock and Fed Ex just told me that don't have anyone that can pick them up. You wanna see some eyes popping.
Just go to the Fex Ex terminal at the airport you'll see a good argument.
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Permalink Reply by Dorcheated A1 on
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Thanks sesport,
It shouldn't be too much longer. I called our Fed Ex national account rep. I got him on his mobile at his home in Indiana. I told him the deal, he said "you joking right" I said, "do I sound like I'm freaking joking" He apologized and hung up the phone and I mean it was 2 minutes later and the terminal call and said we have a truck on the way. That's Capitalism at it's finest.
Thanks for the video sesport.
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Hey Dc,
They gonna send a boat up Dorcheat?
Maybe they oughta troll on the way. No telling what they may catch.
If its CHK, I hope they catch the crabs. -
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Permalink Reply by Dorcheated A1 on
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Hey BD,
I betcha there are some people on my street who might have them.
That's just a little joke. My little Dorcheat friends.
Hey, maybe I can stand on my dock and scream "throw me something mister" -
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Permalink Reply by Two Dogs, Pirate on
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KB, you have been there to defend the Lessor in every post you have made. Hats off to you for being a friend to the landowner.
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Me like-um too.
But tell me Son why do you ask?
HA HA
(Talking to 2 dogs)
Sorry, wise old chief just got out of the tepee.
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Hey KB,
They might have the crabs. Anyway, I'm gonna tell everyone they do.
I hope they can't ever get any.
Leases I mean.
Or anything else for that matter.
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