Replies to This Discussion

Permalink Reply by RAY on August 25, 2008 at 4:53

whats the acreage of the lots?
what company?

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Permalink Reply by 221caribbean on August 25, 2008 at 7:03

More info please! When, with whom, one lot or both?

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Permalink Reply by Jeremy on August 25, 2008 at 7:27

The last offer we recieved in this area was $7,500 per acre from twin cities, I'm willing to bet that's it. personally , well, I won't even go there

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Permalink Reply by Barkley on August 25, 2008 at 9:02

7,500 per "quarter" acre I hope!

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Permalink Reply by Deputy Dawg on August 25, 2008 at 9:09

Okay, okay .......

I will try to be more specific. The $7,500 was a per acre price. The company was Twin Cities, the official leasing agent for Chesapeake (largest nat gas driller in the world). The total acreage from both lots was 1/2 acre, so about 1/4 acre each.

Upon receipt of our first letters from them, which had no price stated. We went to a Twin Cities meeting, in addition to the Broadmoor Assn Meeting. We signed a letter of intent with the assn, but once the offer we received in the second set of letters went up $2,000 an acre in price from what we heard at the Twin Cities meeting, we accepted the second offer. The royalty was 25% ....

I have two recommendations. First, don't sign with a lease hound. He's trying to get your acreage on the cheap and sell it to the REAL company at a premium. Make sure the guy you sign with works for Chesapeake, Encana, Petrohawk, Goodrich, or any other REAL company who will do the drilling themselves. AND there will be no royalty until the REAL company gets interested; the lease house has no intent to drill.

Second, don't hold out so long that you get "force pooled" by the state Dept of Conservation. You won't get a lease bonus or any return (royalty) for your working interest until all drilling expenses have been recouped.

The worst that can happen is that the REAL company decides they are not interested because the lease bonuses have become prohibitive. They will just fold their tents and pursue other geographic interests .......

So we have avoided all three evils with our deal. The neighborhood assn representative is suggesting holding out until November. Good luck, if you do this.

Deputy Dawg

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Permalink Reply by TREY on August 25, 2008 at 10:26

You have some good points but there won't be any force pooling going on when the "ShreveCentreCoalition" is trying to represent thousands of acres. If people think that they can negotiate better on there on than e "ShreveCentreCoalition" then let them try. I'm willing to bet you that when it comes time to negotiate that the bidding will start at $20,000 per acre. Especially if the Southern Hills Coaltion received in the $20's per acres. Recently a Twin Cities representative stated at a BNA meeting that they are signing people all of the time for $5500 & $7500 per acre. Those are the people who basically live in a bubble. I live in Broadmoor and there are a lot of elderly people who have no idea what the Haynesville Shale is. Those are the ones being preyed upon and we are in the process of educating them. Your third fear will never happen. I just won't. They have already calculated how much they can pay per acre and still make a profit and I assure you it's more than $40,000 per acre. That's why they started in Desoto and southern Caddo parish leasing up land. In the city you have 3-4 households per acre. In the country you have 3-4 households per 100 acres. Less people per acre to worry about putting 2+2 together and having to pay what the lease is worth.

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Permalink Reply by Snake Stewart on August 25, 2008 at 10:51

"Lease hounds" around here are paying much more then you got .
Low lease amounts are very prohibitive to me ! If they are ready to pull up and leave , then there isn't much of anything that I can do to stop them now is there ? Congratulations on the $1200 to $1500 you will clear after taxes .

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Permalink Reply by mooncookie on August 25, 2008 at 17:56

Indeed.

As for getting a good deal, that depends on whether you can sleep at night after signing.

My family had much more (royalty % and timber) generations ago, but foolish aunts, etc sold out for far too little.

This situation is similar to buying a car.... the salesman can sell you if he/she knows which of the 3 doors you want to go through:
1)high-value for your trade-in (=higher new car $/monthly$/APR)
2)low APR financing (=higher monthly note or big down payment)
3)low monthly payment (=longer term &/or higher APR/low trade-in value)

either way, you end up getting roughly the same deal...this is all about the TIME-VALUE OF MONEY

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Permalink Reply by Sean on August 26, 2008 at 3:03

One must also take into consideration where the land is at, which is why there have been lease bonuses for 20 grand and up per acre. That being said, those prices were paid for land that Drill sites can be placed on...Desoto, South Caddo, and even Southern Hills.... There are plenty of places in the Southern Hills area to place a Drilling Site or several, still alot of vacant land. Remember, they need a minimum of 5 acres to place a rig, that is for equipment to sit on and for trucks to come in and be able to turn around and get out of the Drilling Site. So $7500 an acre in Broadmoor, well in my opinion, that is a fair price. I for one do not know of any spot in the Broadmoor area that a Drilling Site can be placed, unless the city gives up Querbes Golf Course or the Caddo School Board gives up the playground at a school. Not everybody is gonna get 10, 15, 20, or even 30 grand an acre..... You must look at both sides of the Haynesville Shale, not the fact that a land owner in Desoto Parish, who has 500 acres got 25 grand per acre and I feel that they should pay me the same for my 1/4 acre lot in the middle of Shreveport. They can untilize the land in Desoto Parish, but what can they do in Broadmoor? Business is Business, I lost alot of money not keeping mineral rights to land I sold 2 years ago...But that is life.....

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