Our subdivision, covering 640 acres, 5 miles east of Parker Colorado has been offered Oil and Gas leases. After two neighborhood meetings, one with the oil company, we don’t seem to be unified enough to make a response to our Landman. What are some of the ways other neihborhoods have organized a unified response to Oil companies?
I would like to know who has contacted you with a lease. I am in the next "township" south of you and south of Singing Hills Rd. We have been contacted by Chesepeake and most people are signing in a big hurry. The problem I see you will have is people will sign because the "Company" says they need to soon! and when they do you loose any negotiating power you would have had as a unit, for sure. The other problem is finding someone (attorny) knowledgable enough to explain the "items" in the lease to you. There are other issues in a lease besides the $$$$. Such items as Indemnity clause,NOT warrenting and defending the Title, 3 year term, higher royalty , higher shut in royalty and such are important issues. If you direct people to this and other web site on how to negotiate a lease you can only enlighten them on the bigger picture. Go to this website "resources" link above and have them read the "10 common mistakes on mineral lease negotiating". Hope this helps.
Thanks Don. Our neighborhood was contacted by Chesapeake as well. I agree in your “negotiating power” statement and hope we can be patient and have a unified response. Are you doing any organizing? Have you contacted an Attorney that can help your get better terms in your lease offer? If so, what are the upfront costs of doing it this way? The resourses link was very helpful. Thanks, Eric
I live in Johnson County, TX. There have been several neigborhood hold-out groups formed during the last 3 or 4 years in this area, mostly in Tarrant County just north of here. You might do a web search & maybe communicate with someone that has been envolved with one of those. It can be a rather large chore to orginize such an effert.
Joel
Eric Peterson said:
Thanks Don. Our neighborhood was contacted by Chesapeake as well. I agree in your "negotiating power" statement and hope we can be patient and have a unified response. Are you doing any organizing? Have you contacted an Attorney that can help your get better terms in your lease offer? If so, what are the upfront costs of doing it this way? The resourses link was very helpful. Thanks, Eric
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
Seems to me that these companies are on year end break and are in the process of reorganizing for a new year push. I believe they, especially Chesapeake, will be back in "force" to complete their intensions in Elbert Co. to rap up their acquisitions of lease so they can then determine where to start testing for well placement. They have yet to determine with the state the size of the pooling and consiquently the spacing of wells per pooled area. I spoke to a very helpful lady at COGCC and filled me in on some of those rules once the Company approaches after their acquisition of leases phase. I have done much research on line (everywhere) and had some lease experience in Texas. I don't have all the answers but do ask lots of question of all kinds of people who are willing to answer. Remember this, you are giving up your rights to do anything with your minerals when you sign a lease to anybody for at least that primary term (5 years or less!!) Read the Lease at least 3 times to try to understand it. Then ask people who have had any experience with this business. I like talking to all kinds of people on this issue from the County, previous Landmen in Texas, people who work in the Oil & Gas business I run into ETC..and compile the info. A negotiator for your neighborhood may not be a bad way to go for you, it isn't for me just because of my intensity to discover. Don't jump because some company says you have to either. Hope some of this helps and doesn't overload you.
Don
Eric Peterson said:
Thanks Don. Our neighborhood was contacted by Chesapeake as well. I agree in your "negotiating power" statement and hope we can be patient and have a unified response. Are you doing any organizing? Have you contacted an Attorney that can help your get better terms in your lease offer? If so, what are the upfront costs of doing it this way? The resourses link was very helpful. Thanks, Eric