Elbert County Colorado Lease Offer

Oil and Gas Leasing Help
1

I was contacted by someone from Conoco on Wednesday (12/22/10) wanting to lease my mineral rights. 5 year lease, 1/6 of profits and an initial $1500 per acre. We live on 5 acre lots out here in NW Elbert county in Colorado. I know my one neighbor has been solicited as well. Anyone else out here getting offers?

The part of this offer that I don't much care for is that we only have until next Friday (12/31/10) to make the decision to sign the lease. Does this sound legit or is this a car salesman ploy to get us to commit?

I welcome any comments.

Thanks, Jim Strates

jim@shadetreewebsites.com

2

Jim,

It could be that they are wanting to wrap up their 2010 leasing program in that area. It doesn't mean that sometime next year they won't start it back up and maybe with better offers but the $1500 per acre bonus is a little hard to believe for Elbert. You could ask the agent if they have authorized any better deals like 3-2 or 17.5% and see what they say but I doubt making a counter offer would get you anywhere if they are wrapping up a leasing program but you could try but $1500 per acre as I said is unbelievable and I would be thrilled with it.

3

Should you sign the lease, they could put roads/drilling rigs on your property.

The 1/6th profits which is 16.666 % is only if they find something and make a profit.

Bookkeeping can render the profit null and void.

Five acres is not much land when roads, rigs, detaining ponds, and equipment is in place.

I was raised on a Ranch/Farm in Southern Colorado- Mineral Right are a must because of protecting the surface of your land.

The Rule of Thumb is : You Can't Trust Oil Companies.

Stories are floating that "Ranchers " are going for 20 K deals because it looks like a lot of money.

Millions of dollars are at stake, don't think for one minute that these people would give you a fair shake.

Oil in this area is known, people have told me about drilling for water and hitting crude.

Why must you go for a dead line of next week.

Tell them you are taking more time to think it over.

If they are honest they will understand.

Why just $1800 _________? eh Per what?

Take your time.

Next year about March you will think different.

Remember "Radar" 25,000 thousand acres of open strip Coal in Elbert County ?

You could be on a bed of Coal , then what will happen.

The $1500 Dollars may look good , but it could cost you your land.

Be careful.

Jim Just for the fun of it.

4

I live on Delbert Rd and have been contacted a few times over the past 6-8 months, but not getting offers that high. We were offered $500/acre. There is a group just to the north of me just south of County Line that has been working with a landman. I guess they are getting in touch with everyone in this area. I know from a landman that if you do not agree to lease your rights, they can still access the oil/gas and not pay you. good luck

5



Kathleen MacLennan said:

I live on Delbert Rd and have been contacted a few times over the past 6-8 months, but not getting offers that high. We were offered $500/acre. There is a group just to the north of me just south of County Line that has been working with a landman. I guess they are getting in touch with everyone in this area. I know from a landman that if you do not agree to lease your rights, they can still access the oil/gas and not pay you. good luck
We have heard that if you do not sign the lease that is offered and the section is "forced pooled" you will only get the State minimum of 12.5% for your royality and you do not get the signing bonus of $500 as in your case or $1500 as in Jim's. To make matters worse the oil company can subtract expences from your 12.5% royality leaving you with alot less than the rest of your neighbors that signed early on.
6

I live in Prairie Trail Ranches (just east of the Fire House) and was contacted on Wednesday with an offer of $1500 an acre. I have a little over 5 acres and was wondering if they could legally drill on a piece of land that small, in a “residential” area? My next door neighbor who has almost 7 acres was not contatced…? If they have to be 200 ft from your house or barn and I assume 200 feet from your neighbors house or barn, that does not leave much room? What is the minimum lot size for them to to operate effectively? How do you find out what percentage of mineral rights you own?

7

Did you get the Friday deadline as well?

Also, If you want to verify that you do own the mineral rights you can go to the Kiowa building where the DMV is located. The office you need is the anex, which is the trailer on the east side of the building.


bruce gustafson said:

I live in Prairie Trail Ranches (just east of the Fire House) and was contacted on Wednesday with an offer of $1500 an acre. I have a little over 5 acres and was wondering if they could legally drill on a piece of land that small, in a "residential" area? My next door neighbor who has almost 7 acres was not contatced...? If they have to be 200 ft from your house or barn and I assume 200 feet from your neighbors house or barn, that does not leave much room? What is the minimum lot size for them to to operate effectively? How do you find out what percentage of mineral rights you own?
8

Shell Oil Offer for Routt County, Colorado

We received an offer from Shell of $250/acre and 17.5% for 3 year lease with an option for 2 more years. This is for Routt CO, Township 5 North, Range 87 West, 6th P.M. Section 22:SW. And Shell says they need it by year end. (sounds a little like a used car salesman, but there could be a legitimate reason for needing this, from what I am reading on this site....)

Of course, I can wait it out and possibly negotiate a better deal, but the offer might also just disappear after the end of the year.

I can't afford an attorney, so can anyone give me information about the wisdom of signing this witout knowing any more than I do?? Is there any chance that there are other mineral owners in Routt County, Colorado in the same boat? Anyone interested in discussing to see if we could speak with a common voice and add strength to our negotiating position?

I appreciate any and all help.

Mateo

9

Mateo,

There are some of us in a Moffat county disscussion with the same offer's either Routt or Moffat.
10

So the $1500 per acre and 1/6 royalty was legit. I had a sit-down with my very good and new friend Don Jones (who saw my initial post here). We went over the contract and he advised that I make a few modifications... one of which was the addition of an Indemnity paragraph, which essentially protects the landowner against anything adverse that might occur as a result of the drilling and operation of the well. The landman wouldn't budge on any of the revisions and said that Conoco would not entertain any modifications to the lease at all... take it or leave it. So we're leaving it. Thanks for all the feedback folks!

Jim

11

Hi Jim. We are in Araphaoe County and recieved a similar offer from Conoco, we haven’t submitted our modifications yet, I’m sure we’ll get the same response. Would you be okay sharing who your landman was? Thanks.

Jim Strates said:

So the $1500 per acre and 1/6 royalty was legit. I had a sit-down with my very good and new friend Don Jones (who saw my initial post here). We went over the contract and he advised that I make a few modifications... one of which was the addition of an Indemnity paragraph, which essentially protects the landowner against anything adverse that might occur as a result of the drilling and operation of the well. The landman wouldn't budge on any of the revisions and said that Conoco would not entertain any modifications to the lease at all... take it or leave it. So we're leaving it. Thanks for all the feedback folks!

Jim

12

His name is Kelly Hanson at 970-580-3187.

So you didn't have the end of year deadline?

Cathy said:

Hi Jim. We are in Araphaoe County and recieved a similar offer from Conoco, we haven't submitted our modifications yet, I'm sure we'll get the same response. Would you be okay sharing who your landman was? Thanks.

Jim Strates said:

So the $1500 per acre and 1/6 royalty was legit. I had a sit-down with my very good and new friend Don Jones (who saw my initial post here). We went over the contract and he advised that I make a few modifications... one of which was the addition of an Indemnity paragraph, which essentially protects the landowner against anything adverse that might occur as a result of the drilling and operation of the well. The landman wouldn't budge on any of the revisions and said that Conoco would not entertain any modifications to the lease at all... take it or leave it. So we're leaving it. Thanks for all the feedback folks!

Jim

13

To not take 1500 in Elbert county is pretty silly! I own thousands of acres in Elbert county and have been contacted several times by GFL, Saint resources, Sam Gary and Continental land services and cant break 50 dollars an acre

Jim Strates said:

His name is Kelly Hanson at 970-580-3187 begin_of_the_skype_highlighting 970-580-3187 end_of_the_skype_highlighting.

So you didn't have the end of year deadline?

Cathy said:

Hi Jim. We are in Araphaoe County and recieved a similar offer from Conoco, we haven't submitted our modifications yet, I'm sure we'll get the same response. Would you be okay sharing who your landman was? Thanks.

Jim Strates said:

So the $1500 per acre and 1/6 royalty was legit. I had a sit-down with my very good and new friend Don Jones (who saw my initial post here). We went over the contract and he advised that I make a few modifications... one of which was the addition of an Indemnity paragraph, which essentially protects the landowner against anything adverse that might occur as a result of the drilling and operation of the well. The landman wouldn't budge on any of the revisions and said that Conoco would not entertain any modifications to the lease at all... take it or leave it. So we're leaving it. Thanks for all the feedback folks!

Jim

14

Which leaves me to believe that something just aint right…

Jeanette Muth said:

To not take 1500 in Elbert county is pretty silly! I own thousands of acres in Elbert county and have been contacted several times by GFL, Saint resources, Sam Gary and Continental land services and cant break 50 dollars an acre

Jim Strates said:

His name is Kelly Hanson at 970-580-3187 begin_of_the_skype_highlighting 970-580-3187 end_of_the_skype_highlighting.

So you didn't have the end of year deadline?

Cathy said:

Hi Jim. We are in Araphaoe County and recieved a similar offer from Conoco, we haven't submitted our modifications yet, I'm sure we'll get the same response. Would you be okay sharing who your landman was? Thanks.

Jim Strates said:

So the $1500 per acre and 1/6 royalty was legit. I had a sit-down with my very good and new friend Don Jones (who saw my initial post here). We went over the contract and he advised that I make a few modifications... one of which was the addition of an Indemnity paragraph, which essentially protects the landowner against anything adverse that might occur as a result of the drilling and operation of the well. The landman wouldn't budge on any of the revisions and said that Conoco would not entertain any modifications to the lease at all... take it or leave it. So we're leaving it. Thanks for all the feedback folks!

Jim

15

You might be right. If you sign a lease and they dont pay you just get it ratified If you sign a lease and they pay with a fortune 500 oil company you get the $1500 per acre

16

Thanks Jim. Our landman’s name is Trent, can’t think of his last name right off hand. We did have the end of the year deadline, but this isn’t the first time we’ve been given a 2 week timeframe, a tactic used to pressure people into signing without reviewing the lease. There is a risk that the offer will disappear, but a greater risk of getting into a bad lease, the signing bonus is definitely only a very small part of the whole thing. There will probably be other offers, just have to be patient and give it time. Hopefully we’ll both end up prospering eventually.

Jim Strates said:

His name is Kelly Hanson at 970-580-3187.

So you didn't have the end of year deadline?

Cathy said:

Hi Jim. We are in Araphaoe County and recieved a similar offer from Conoco, we haven't submitted our modifications yet, I'm sure we'll get the same response. Would you be okay sharing who your landman was? Thanks.

Jim Strates said:

So the $1500 per acre and 1/6 royalty was legit. I had a sit-down with my very good and new friend Don Jones (who saw my initial post here). We went over the contract and he advised that I make a few modifications... one of which was the addition of an Indemnity paragraph, which essentially protects the landowner against anything adverse that might occur as a result of the drilling and operation of the well. The landman wouldn't budge on any of the revisions and said that Conoco would not entertain any modifications to the lease at all... take it or leave it. So we're leaving it. Thanks for all the feedback folks!

Jim

17

HI JIM, Looks like this conversation is rolling right along. Just want to follow up with this Conoco offer issue. I still don’t understand why they would want to offer such a high bonus in such a condensed area when they probably won’t be allowed by the state spacing regulations as I understand them. Any input on that by others is welcome. The other point is you have to realize that they can always make this big push and 3 months or more down the road see that Chesapeake has the bigger push and just back out and nobody gets anything unless Chesapeake comes back to them. Chesapeake doesn’t have to buy anyone elses deals either even if they are the biggest player. Everyone in your area should look at WHO is the big player there and Who is going to actually be working to produce the area. I have come to the conclusion that the “negotiator” that some people were thinking of hiring is taking money out of the mineral owners pockets when the mineral owners themselves could be researching and getting there own terms and $$ if they just follow the mineralweb and other places. All good info. Don

18

To all Elbert County Colorado residents:

I received an offer to negotiate to lease mineral rights, 1/05/2011 from a landman, Dave Dixon, Fidelity Land LLC, 303-815-8007, representing Conoco-Phillips. I live 5 NE of Elizabeth, CO.

If oil and natural gas development is allowed using current hydraulic fracturing techniques (fracking), the implications to our acquifers in Elbert County, CO could be devastating.

This community depends on groundwater. It is our only current source of drinking and agricultural water.

Similar situations occuring in Pennsylvania, see below, have damaged ground water of lessees and surrounding properties.

The potential implications of this venture by Conoco and the associated potential destruction of property values require any potential lessee to demand assurance Hydraulic Fracturing techniques of explorations/extraction of natural gas not be used. If these techniques are used it is possible anyone allowing Conoco-Phillips to explore or extract in such a manner may be the short-term beneficiary of finances from this oil company in exchange for the destrucion of our surrounding acquifer(s).

Sincerely, Jeffrey S. Rodden, Elbert County Landowner

See below:

In Colorado, hydraulic fracturing is being blamed for causing residents’ well water to burst into flames.

http://www.water-contamination-from-shale.com/category/colorado/

See also: youtube video of flammable tap water

http://www.youtube.com/watch?v=qYJj-1jNOxE

See also: http://blogs.mccombs.utexas.edu/energy/energy-management-briefs/fracking-regulations-is- federal-hydraulic-facturing-regulation-around-the-corner/

See also; http://www.oilandgaslawyerblog.com/ of the following recent happenings in Pennsylvania

"The controversy over natural gas in underground aquifers in Dimock Township, Pennsylvania continues. It was reported that private lab tests of contaminated water found chemicals used in hydraulic fracturing. Dimock resident Victoria Switzer said that the tests had found ethylene glycol, propylene glycol and toluene in her well water. The testing company said that the tests also found ethylbenzene and zylene in most of the affected water wells in the township. Read the Scranton Times-Tribune article here. The Pennsylvanie Department of Environmental Protection has fined Cabot Oil & Gas for improper casing and cementing that allegedly have caused natural gas to appear in Dimock's ground water."

  • Cabot has denied that the tests show contamination of ground water by frac water from its wells. Cabot claims that it has not used xylene, ethyl benzene or toluene in its frac water. It said that the chemicals found in the ground water were present before Cabot ever drilled its wells, and Cabot notes that an automobile and truck repair garage is sited near the water wells tested and that these chemcials are primary constituents of car and truck fuel and are commonly found in gasoline spills. See article here.
  • The EPA hearing on its well frac'ing study finally took place in Binghamton, New York. After all of the concern about the crowd and security, about 700 people showed up for the hearing, while others chose to demonstrate outside the hearing. There were demonstrators on both sides, some holding signs saying "Kids can't dring gas" and "Protect our water. Stop fracking America." Other signs said "Yes to science, no to paranoia" and "Pass gas now!" See Philadephia Inquirer article here.

See Also, Conoco's own website admits this technique is used.

http://www.conocophillips.com/EN/newsroom/other_resources/Pages/CERAWeek.aspx

  • "To make this rock productive, over a 60-year span we developed new and sophisticated technology. Completion techniques, hydraulic fracturing, drilling and seismic imaging all advanced. As a result, unconventional gas is now a key part of U.S. reserves.

19

Jeffrey,

You have valid concerns that are on the minds of some of us mineral owners out here. You should ask the man working on behalf of Conoco if you can get a copy of their EXHIBIT "A" which addresses some of the issues that they know concern people that get their water from aquifers. I am not defending anything they do because they are in business to make $$ to find fuel for US. That might be another topic!! The state like all states, I assume, is very favorable to them for doing this ,I've learned. there are other sites that are showing up that explain the attempts by companies like Halliburton that are making more "friendly" solutions. Just type "fracking fluids" on a search. One by the New York Times was informative. Companies are drilling all over and we may not be able to avoid it. So all we can do is be vocally concerned and informed and hold Them to the fire as much as we can. I have a feeling they are going ahead with or without us!! Do more research its good!

Hope this helps more than hurts

DON

20

Hello,

I live just north of Flintwood and Singing Hills, and we too have been approached by Chesapeake to lease our mineral rights. Like most of you, we are deeply concerned about the possible water contamination from hydraulic fracking. Especially since we are a more condensed population - there is about 100 lots of 5 acres in our neighborhood. I have only recently become aware of the extent of land owners to which the oil companies have contacted. I think it would be wise for us to oppose them as one large unit, than individually. There is definitely more power in numbers. I am thinking of creating a meeting time and place to gather everyone together, and to invite the state representatives/county commissioners. Is the only way to protect our land and water through legistlation? I don't know what our response plan should be, but we have more power as one. I am open to ideas.

Don Jones said:


Jeffrey,

You have valid concerns that are on the minds of some of us mineral owners out here. You should ask the man working on behalf of Conoco if you can get a copy of their EXHIBIT "A" which addresses some of the issues that they know concern people that get their water from aquifers. I am not defending anything they do because they are in business to make $$ to find fuel for US. That might be another topic!! The state like all states, I assume, is very favorable to them for doing this ,I've learned. there are other sites that are showing up that explain the attempts by companies like Halliburton that are making more "friendly" solutions. Just type "fracking fluids" on a search. One by the New York Times was informative. Companies are drilling all over and we may not be able to avoid it. So all we can do is be vocally concerned and informed and hold Them to the fire as much as we can. I have a feeling they are going ahead with or without us!! Do more research its good!

Hope this helps more than hurts

DON