Looking for facts, tired of their lies

General Mineral Rights Discussion
1

Hi there, I’m new to the site and just trying to get some facts on this whole drilling thing. I live in Lewisville, Tx and Cherokee Horn has been hounding us for about a year now. I do not want to sign a lease with them because I do not want them to drill at all and their $500 signing bonus won’t be enough to help if they drill and cause the problems I fear.

I also do not like the way Cherokee has tried to do business - sending letters with fancy working to appear to say one thing, they use threatening language and I suspect out right lie. I am searching the web today to find out about the latest letter we received.

They say based on their leasing percentages my property “will be utilized and if you do not sign a lease you will not be given an option to ever recover your royalties/payments”. Does anyone know if this is true? I have read comments that you are due royalty payments if they successfully drill, but want to know for sure. Also, if I don’t sign their lease, can they drill under my property anyway?

Do we have any rights at all, or are the drilling companies free to do anything they please since there is big money involved? Just looking for a little peace of mind and understanding.

I am hoping by not signing I can at least make their jobs a little more difficult if this is all going to happen no matter what. The longer we wait, the more threatening their letters have become. Any thoughts and info would be greatly appreciated.

2

Hey Last Holdout - hang in there! You’ve got what they want and they obviously want it pretty badly if they would expend so much time and effort bugging the crap out of you!!

I don’t know much and most of what I read is vague, confusing and contradictory. What I have pieced together and surmised (but could be wrong on) is that they need everyone’s signature as approval and permission to be able to drill. I don’t think they can drill out your minerals without your consent or the Railroad Commission over ruling your rights and giving them permission. What I heard from a friend who’s husband works for a drilling company (coordinating and hiring contractors) the Railroad Commission is their worst nightmare. They hate to deal with them and it causes them a lot of hassle. Plus, to petition the Commission to get your rights taken from you is a lot of time and effort for the driller. They would much prefer you just sell your soul than to have to fight you for it.

Now, they might be able to drill in an area without everyone’s consent, but if your property is in the way of the path they plan to drill in, then they really need you to sign so they don’t have to spend the money and effort to turn the bit and not get the straight line they want for drilling.

I don’t know the facts, but have read from two comments on this forum recently that if you lease your rights you get something like 13% of the royalties and if you don’t sign, you get 100% but it takes longer and you have to wait until after all the drilling is done. So, with all that in mind, they want your rights in a big way. Plus, (I don’t know about Petrocasa) Cherokee Horn is not the drilling company. They just come in and get all the leases and then sell those leases to the drilling company - I’m sure for way more than your signing bonus. So they stand to make quite a profit, drilling will not be delayed, the Commission will not be involved and everyone seems agreeable if 100% of a neighborhood signs.

So, I am quite happy to throw away the prepared contracts they leave on our door and mail us routinely. I don’t take their calls and they best not find my email address! If there’s any little thing I can do to make this harder for them…I’m on board. Plus, I’m a woman of faith and I’m praying with confidence that God will take care of this. Hopefully by keeping them from drilling - if not then keeping my family safe.

3

Hi Last Holdout

There were a lot of folks that were offered $20,000 to 27,000 per acre bonus and 25% to 26.5% royalties when the “gold rush” was still on but here in Texas over the Barnett Shale, on October 16, 2008, the bottom fell out. All leasing came to a sudden and grinding halt and current offers are microscopic in comparison. The O&G companies say it’s because of the huge decline in the market price of NG. Back in “The Day” (2008) when huge bonuses were being handed out, NG was $13 - 14 per million BTU but now it’s only $3 - 4 per million BTU making it much harder for the O&G companies to cover costs, especially huge bonuses and that means poor contract terms.

So, if you didn’t sign a contract back during the “Rush” in the first 3 quarters of 2008, you’re pretty much SOL.

If you’re in Texas, they can drill under you and take your gas with an Article 37 judgement and if they have 80% of the properties in the pool already leased. This is going on in my own back yard with Carrizo Oil and it’s entirely possible for you to miss out.

My thinking on this is that if they’re going to drill under you anyway and take your gas why not stick it to 'em and get paid for their effort? Being a last holdout can sometimes simply mean you’re got your head in the sand.

4

NOT LEGAL ADVICE

Dear Ms. Holdout,

Your husband is exactly right…you pay for all the principle you can afford in the civil justice system. But really, you are actually considering paying three attorneys to fight over this? You must have a hell of alot more time and principle (read money) than I do to throw around like cannon fodder. I hope you’re happy with the ROI.

Sincerely,

Philip Wynne

5

Yeah, I’ve been thinking about all that. But then on this site I saw a couple of comments that if you don’t sign, in the end after all is said and done you get 100% instead of the measly 12.5%. Now, I don’t want them to do this, but I know I can’t stop it, so if I would get 100% later by not signing, that costs them more. I don’t really care about the money. I care more about my family’s health. I just can’t find any where that it factually states what happens if you don’t sign. Everything seems to be speculation or the drilling/leasing company saying what will get you to sign.

Jim Colley said:

Hi Last Holdout

There were a lot of folks that were offered $20,000 to 27,000 per acre bonus and 25% to 26.5% royalties when the “gold rush” was still on but here in Texas over the Barnett Shale, on October 16, 2008, the bottom fell out. All leasing came to a sudden and grinding halt and current offers are microscopic in comparison. The O&G companies say it’s because of the huge decline in the market price of NG. Back in “The Day” (2008) when huge bonuses were being handed out, NG was $13 - 14 per million BTU but now it’s only $3 - 4 per million BTU making it much harder for the O&G companies to cover costs, especially huge bonuses and that means poor contract terms.

So, if you didn’t sign a contract back during the “Rush” in the first 3 quarters of 2008, you’re pretty much SOL.

If you’re in Texas, they can drill under you and take your gas with an Article 37 judgement and if they have 80% of the properties in the pool already leased. This is going on in my own back yard with Carrizo Oil and it’s entirely possible for you to miss out.

My thinking on this is that if they’re going to drill under you anyway and take your gas why not stick it to 'em and get paid for their effort? Being a last holdout can sometimes simply mean you’re got your head in the sand.

6

Hi Amelia

I’m just a bit confused, which isn’t hard for me to do. Can you link me to the comments that said you’d get 100% for doing nothing?

The way I understand it is, if you do nothing, you get the least possible royalty allowed by law - not the max. I can definitely tell you (now that I know you’re in Texas) that if you don’t sign up but the majority of the property owners around you have signed, then you can be forced into the pool and get very little and in some cases nothing at all because they could simply drill around you. I’ve seen survey plats from several different gas drilling companies that have done just that.

Do you know the status of your neighbors? Have they all signed or can you still organize a coalition of property owners to negotiate with Exxon enmasse? The old adage “strength in numbers” works in this situation and just might be alot cheaper than paying 3 lawyers like Philip said.

One other thing, you mentioned your family’s health. Are they planning to drill right next door to you or something? How do you feel your family will suffer?

7

Hi Jim,

Thanks for the comments and questions.

Here’s the link to one of the comments about getting 100% - I could be totally wrong in how I interpreted the answer…but that what it sounded like to my tired brain:

http://www.mineralrightsforum.com/forum/topics/any-hope-in-fighting-a-lease?commentId=4401368%3AComment%3A1387

Here’s the comment: NOT LEGAL ADVICE

Dear Mr. Ohman,

As I have stated elsewhere, I do not have much experience with subdivision leasing, so you will have to confirm what I state here with somebody else. But my belief is that if Chesapeake can obtain leases covering 80% of the acreage in their proposed drilling unit, then they can proceed with the drilling without your permission. Yes, once they meet this threshold, which I believe is 80%, then can proceed and “drain” from your property. And it is my additional belief that if their well is successful, you will be treated as a “working interest” owner, like a joint venturer, and you will get paid 100% of your royalties instead of 22% or 25% or whatever they were offering you. HOWEVER, you will have to wait until the well is paid for before you get any royalties at all, which could take a few months or a few years depending upon a host of variables impossible to predict.

Nothing happens to your mineral rights. Nobody can take those away from you without your consent, well absent a divorce case, foreclosure, or other court proceeding. Good luck.

Sincerely,

Philip Wynne

Cherokee Horn has sent out a map several times showing who in our housing development has signed and who has not. We are in a newer small development that is surrounded by older houses. I don’t know how much of the area they have been leasing, but according to the map there are about 40 of us who have not signed yet they say they have over 80% of the area signed. We live on a circle and are one of 3 houses not signed. The other holdouts are pretty scattered through our development which would cause it to be difficult for them to get a straight line without petitioning the RRC. I figure that’s why there is so much pressure.

I have told my husband many times that I wish I had the time to get all us holdouts organized. My “problem” is I have a 2 and 4 year old, my husband and both work full time and I have so many projects and just general housework that doesn’t get done because there’s just not enough time in the day for me. I’m exhausted already! I am considering sending them all a letter, but know I don’t have the time or knowledge to organize anything. When this all started, there was a big group that organized and fought to get more money. At the time they were offering $500 signing bonus which lots of people jumped on. This group was pretty big, I forget how many but I was so crushed when they sent out the word that the negotiations were done, they wouldn’t get a better deal and everyone had 2 weeks to sign and get the new deal of $700. Almost all of them signed.

As to my family’s health? Don’t know if you have heard the news in TX lately but there are cases of leukemia in Flower Mound that are raising lots of concern about air pollution and there’s lots of testing going on. Water contamination has happened in areas around us. They will be drilling right next to a small creek that runs throughout our town (two streets from our home - we walk down and ‘play’ in it all the time) and you know there will be leakage, run off and accidental spills that will contaminate that killing all the wildlife. I am not sure exactly how close the drill will be in feet or anything, but it is about 2 streets over. We will definitely see, smell and hear it! It will be way too close for my comfort.

With all of these kind of things, it’s always after the fact and after the damage is done that we learn the truth. Now that the drilling has been going on a while they are doing air quality testing that shows higher levels of contaminants than are safe. People are getting sick and will continue to get sick. But if you listen to the drilling companies it’s all perfectly safe…

Jim Colley said:

Hi Amelia

I’m just a bit confused, which isn’t hard for me to do. Can you link me to the comments that said you’d get 100% for doing nothing?

The way I understand it is, if you do nothing, you get the least possible royalty allowed by law - not the max. I can definitely tell you (now that I know you’re in Texas) that if you don’t sign up but the majority of the property owners around you have signed, then you can be forced into the pool and get very little and in some cases nothing at all because they could simply drill around you. I’ve seen survey plats from several different gas drilling companies that have done just that.

Do you know the status of your neighbors? Have they all signed or can you still organize a coalition of property owners to negotiate with Exxon enmasse? The old adage “strength in numbers” works in this situation and just might be alot cheaper than paying 3 lawyers like Philip said.

One other thing, you mentioned your family’s health. Are they planning to drill right next door to you or something? How do you feel your family will suffer?

8

Amelia, Totally off topic, but I believe it would be best to avoid playing in a creek anywhere around major cities. People throw all kinds of stuff off bridges. Even as children we were admonished to ‘stay out of the creek’ in the rural areas because animals, living or dead, can contaminate the water even if we don’t see them. There was also concern about crop poisons and fetilizers. In the cities, all yard poisons, etc, run into the creeks.

Amelia said:

Hi Jim,

Thanks for the comments and questions.

Here’s the link to one of the comments about getting 100% - I could be totally wrong in how I interpreted the answer…but that what it sounded like to my tired brain:

http://www.mineralrightsforum.com/forum/topics/any-hope-in-fighting…

Here’s the comment:
NOT LEGAL ADVICE

Dear Mr. Ohman,

As I have stated elsewhere, I do not have much experience with subdivision leasing, so you will have to confirm what I state here with somebody else. But my belief is that if Chesapeake can obtain leases covering 80% of the acreage in their proposed drilling unit, then they can proceed with the drilling without your permission. Yes, once they meet this threshold, which I believe is 80%, then can proceed and “drain” from your property. And it is my additional belief that if their well is successful, you will be treated as a “working interest” owner, like a joint venturer, and you will get paid 100% of your royalties instead of 22% or 25% or whatever they were offering you. HOWEVER, you will have to wait until the well is paid for before you get any royalties at all, which could take a few months or a few years depending upon a host of variables impossible to predict.

Nothing happens to your mineral rights. Nobody can take those away from you without your consent, well absent a divorce case, foreclosure, or other court proceeding. Good luck.

Sincerely,

Philip Wynne



Cherokee Horn has sent out a map several times showing who in our housing development has signed and who has not. We are in a newer small development that is surrounded by older houses. I don’t know how much of the area they have been leasing, but according to the map there are about 40 of us who have not signed yet they say they have over 80% of the area signed. We live on a circle and are one of 3 houses not signed. The other holdouts are pretty scattered through our development which would cause it to be difficult for them to get a straight line without petitioning the RRC. I figure that’s why there is so much pressure.

I have told my husband many times that I wish I had the time to get all us holdouts organized. My “problem” is I have a 2 and 4 year old, my husband and both work full time and I have so many projects and just general housework that doesn’t get done because there’s just not enough time in the day for me. I’m exhausted already! I am considering sending them all a letter, but know I don’t have the time or knowledge to organize anything. When this all started, there was a big group that organized and fought to get more money. At the time they were offering $500 signing bonus which lots of people jumped on. This group was pretty big, I forget how many but I was so crushed when they sent out the word that the negotiations were done, they wouldn’t get a better deal and everyone had 2 weeks to sign and get the new deal of $700. Almost all of them signed.

As to my family’s health? Don’t know if you have heard the news in TX lately but there are cases of leukemia in Flower Mound that are raising lots of concern about air pollution and there’s lots of testing going on. Water contamination has happened in areas around us. They will be drilling right next to a small creek that runs throughout our town (two streets from our home - we walk down and ‘play’ in it all the time) and you know there will be leakage, run off and accidental spills that will contaminate that killing all the wildlife. I am not sure exactly how close the drill will be in feet or anything, but it is about 2 streets over. We will definitely see, smell and hear it! It will be way too close for my comfort.

With all of these kind of things, it’s always after the fact and after the damage is done that we learn the truth. Now that the drilling has been going on a while they are doing air quality testing that shows higher levels of contaminants than are safe. People are getting sick and will continue to get sick. But if you listen to the drilling companies it’s all perfectly safe…

Jim Colley said:
Hi Amelia

I’m just a bit confused, which isn’t hard for me to do. Can you link me to the comments that said you’d get 100% for doing nothing?

The way I understand it is, if you do nothing, you get the least possible royalty allowed by law - not the max. I can definitely tell you (now that I know you’re in Texas) that if you don’t sign up but the majority of the property owners around you have signed, then you can be forced into the pool and get very little and in some cases nothing at all because they could simply drill around you. I’ve seen survey plats from several different gas drilling companies that have done just that.

Do you know the status of your neighbors? Have they all signed or can you still organize a coalition of property owners to negotiate with Exxon enmasse? The old adage “strength in numbers” works in this situation and just might be alot cheaper than paying 3 lawyers like Philip said.

One other thing, you mentioned your family’s health. Are they planning to drill right next door to you or something? How do you feel your family will suffer?

9

Thanks for the concern Karen. I put it “playing” because we more walk around and point out the bugs etc. They have made the area really nice with a concrete walking path that leads to a playground area away from the creek. We use wading boots if we want to walk across any part of the actual creek but mostly we just stay on the sidewalk and point out the bunnies and butterflies. It makes for a nice walk … until they contaminate it with the drilling.

Karen J. Morrison, Member AAPL said:

Amelia,
Totally off topic, but I believe it would be best to avoid playing in a creek anywhere around major cities. People throw all kinds of stuff off bridges. Even as children we were admonished to ‘stay out of the creek’ in the rural areas because animals, living or dead, can contaminate the water even if we don’t see them. There was also concern about crop poisons and fetilizers. In the cities, all yard poisons, etc, run into the creeks.

Amelia said:
Hi Jim,

Thanks for the comments and questions.

Here’s the link to one of the comments about getting 100% - I could be totally wrong in how I interpreted the answer…but that what it sounded like to my tired brain:

http://www.mineralrightsforum.com/forum/topics/any-hope-in-fighting…

Here’s the comment:
NOT LEGAL ADVICE

Dear Mr. Ohman,

As I have stated elsewhere, I do not have much experience with subdivision leasing, so you will have to confirm what I state here with somebody else. But my belief is that if Chesapeake can obtain leases covering 80% of the acreage in their proposed drilling unit, then they can proceed with the drilling without your permission. Yes, once they meet this threshold, which I believe is 80%, then can proceed and “drain” from your property. And it is my additional belief that if their well is successful, you will be treated as a “working interest” owner, like a joint venturer, and you will get paid 100% of your royalties instead of 22% or 25% or whatever they were offering you. HOWEVER, you will have to wait until the well is paid for before you get any royalties at all, which could take a few months or a few years depending upon a host of variables impossible to predict.

Nothing happens to your mineral rights. Nobody can take those away from you without your consent, well absent a divorce case, foreclosure, or other court proceeding. Good luck.

Sincerely,

Philip Wynne



Cherokee Horn has sent out a map several times showing who in our housing development has signed and who has not. We are in a newer small development that is surrounded by older houses. I don’t know how much of the area they have been leasing, but according to the map there are about 40 of us who have not signed yet they say they have over 80% of the area signed. We live on a circle and are one of 3 houses not signed. The other holdouts are pretty scattered through our development which would cause it to be difficult for them to get a straight line without petitioning the RRC. I figure that’s why there is so much pressure.

I have told my husband many times that I wish I had the time to get all us holdouts organized. My “problem” is I have a 2 and 4 year old, my husband and both work full time and I have so many projects and just general housework that doesn’t get done because there’s just not enough time in the day for me. I’m exhausted already! I am considering sending them all a letter, but know I don’t have the time or knowledge to organize anything. When this all started, there was a big group that organized and fought to get more money. At the time they were offering $500 signing bonus which lots of people jumped on. This group was pretty big, I forget how many but I was so crushed when they sent out the word that the negotiations were done, they wouldn’t get a better deal and everyone had 2 weeks to sign and get the new deal of $700. Almost all of them signed.

As to my family’s health? Don’t know if you have heard the news in TX lately but there are cases of leukemia in Flower Mound that are raising lots of concern about air pollution and there’s lots of testing going on. Water contamination has happened in areas around us. They will be drilling right next to a small creek that runs throughout our town (two streets from our home - we walk down and ‘play’ in it all the time) and you know there will be leakage, run off and accidental spills that will contaminate that killing all the wildlife. I am not sure exactly how close the drill will be in feet or anything, but it is about 2 streets over. We will definitely see, smell and hear it! It will be way too close for my comfort.

With all of these kind of things, it’s always after the fact and after the damage is done that we learn the truth. Now that the drilling has been going on a while they are doing air quality testing that shows higher levels of contaminants than are safe. People are getting sick and will continue to get sick. But if you listen to the drilling companies it’s all perfectly safe…

Jim Colley said:
Hi Amelia

I’m just a bit confused, which isn’t hard for me to do. Can you link me to the comments that said you’d get 100% for doing nothing?

The way I understand it is, if you do nothing, you get the least possible royalty allowed by law - not the max. I can definitely tell you (now that I know you’re in Texas) that if you don’t sign up but the majority of the property owners around you have signed, then you can be forced into the pool and get very little and in some cases nothing at all because they could simply drill around you. I’ve seen survey plats from several different gas drilling companies that have done just that.

Do you know the status of your neighbors? Have they all signed or can you still organize a coalition of property owners to negotiate with Exxon enmasse? The old adage “strength in numbers” works in this situation and just might be alot cheaper than paying 3 lawyers like Philip said.

One other thing, you mentioned your family’s health. Are they planning to drill right next door to you or something? How do you feel your family will suffer?

10

There was a article in the FW Star Telegram with in the last couple of weeks about the TCEQ test results from Dec. 15th - 17th. 126 well sites were tested during that time. They reported no volatile organic compounds at or above the ESL. Also no carcinogens detected. I’m for clean air but at this point I think the benifits out weigh the negatives. Joel

Amelia said:

Thanks for the concern Karen. I put it “playing” because we more walk around and point out the bugs etc. They have made the area really nice with a concrete walking path that leads to a playground area away from the creek. We use wading boots if we want to walk across any part of the actual creek but mostly we just stay on the sidewalk and point out the bunnies and butterflies. It makes for a nice walk … until they contaminate it with the drilling.


Karen J. Morrison, Member AAPL said:
Amelia,
Totally off topic, but I believe it would be best to avoid playing in a creek anywhere around major cities. People throw all kinds of stuff off bridges. Even as children we were admonished to ‘stay out of the creek’ in the rural areas because animals, living or dead, can contaminate the water even if we don’t see them. There was also concern about crop poisons and fetilizers. In the cities, all yard poisons, etc, run into the creeks.

Amelia said:
Hi Jim,

Thanks for the comments and questions.

Here’s the link to one of the comments about getting 100% - I could be totally wrong in how I interpreted the answer…but that what it sounded like to my tired brain:

http://www.mineralrightsforum.com/forum/topics/any-hope-in-fighting…

Here’s the comment:
NOT LEGAL ADVICE

Dear Mr. Ohman,

As I have stated elsewhere, I do not have much experience with subdivision leasing, so you will have to confirm what I state here with somebody else. But my belief is that if Chesapeake can obtain leases covering 80% of the acreage in their proposed drilling unit, then they can proceed with the drilling without your permission. Yes, once they meet this threshold, which I believe is 80%, then can proceed and “drain” from your property. And it is my additional belief that if their well is successful, you will be treated as a “working interest” owner, like a joint venturer, and you will get paid 100% of your royalties instead of 22% or 25% or whatever they were offering you. HOWEVER, you will have to wait until the well is paid for before you get any royalties at all, which could take a few months or a few years depending upon a host of variables impossible to predict.

Nothing happens to your mineral rights. Nobody can take those away from you without your consent, well absent a divorce case, foreclosure, or other court proceeding. Good luck.

Sincerely,

Philip Wynne



Cherokee Horn has sent out a map several times showing who in our housing development has signed and who has not. We are in a newer small development that is surrounded by older houses. I don’t know how much of the area they have been leasing, but according to the map there are about 40 of us who have not signed yet they say they have over 80% of the area signed. We live on a circle and are one of 3 houses not signed. The other holdouts are pretty scattered through our development which would cause it to be difficult for them to get a straight line without petitioning the RRC. I figure that’s why there is so much pressure.

I have told my husband many times that I wish I had the time to get all us holdouts organized. My “problem” is I have a 2 and 4 year old, my husband and both work full time and I have so many projects and just general housework that doesn’t get done because there’s just not enough time in the day for me. I’m exhausted already! I am considering sending them all a letter, but know I don’t have the time or knowledge to organize anything. When this all started, there was a big group that organized and fought to get more money. At the time they were offering $500 signing bonus which lots of people jumped on. This group was pretty big, I forget how many but I was so crushed when they sent out the word that the negotiations were done, they wouldn’t get a better deal and everyone had 2 weeks to sign and get the new deal of $700. Almost all of them signed.

As to my family’s health? Don’t know if you have heard the news in TX lately but there are cases of leukemia in Flower Mound that are raising lots of concern about air pollution and there’s lots of testing going on. Water contamination has happened in areas around us. They will be drilling right next to a small creek that runs throughout our town (two streets from our home - we walk down and ‘play’ in it all the time) and you know there will be leakage, run off and accidental spills that will contaminate that killing all the wildlife. I am not sure exactly how close the drill will be in feet or anything, but it is about 2 streets over. We will definitely see, smell and hear it! It will be way too close for my comfort.

With all of these kind of things, it’s always after the fact and after the damage is done that we learn the truth. Now that the drilling has been going on a while they are doing air quality testing that shows higher levels of contaminants than are safe. People are getting sick and will continue to get sick. But if you listen to the drilling companies it’s all perfectly safe…

Jim Colley said:
Hi Amelia

I’m just a bit confused, which isn’t hard for me to do. Can you link me to the comments that said you’d get 100% for doing nothing?

The way I understand it is, if you do nothing, you get the least possible royalty allowed by law - not the max. I can definitely tell you (now that I know you’re in Texas) that if you don’t sign up but the majority of the property owners around you have signed, then you can be forced into the pool and get very little and in some cases nothing at all because they could simply drill around you. I’ve seen survey plats from several different gas drilling companies that have done just that.

Do you know the status of your neighbors? Have they all signed or can you still organize a coalition of property owners to negotiate with Exxon enmasse? The old adage “strength in numbers” works in this situation and just might be alot cheaper than paying 3 lawyers like Philip said.

One other thing, you mentioned your family’s health. Are they planning to drill right next door to you or something? How do you feel your family will suffer?

11

Amelia said:

Hey Last Holdout - hang in there! You’ve got what they want and they obviously want it pretty badly if they would expend so much time and effort bugging the crap out of you!!

I don’t know much and most of what I read is vague, confusing and contradictory. What I have pieced together and surmised (but could be wrong on) is that they need everyone’s signature as approval and permission to be able to drill. I don’t think they can drill out your minerals without your consent or the Railroad Commission over ruling your rights and giving them permission. What I heard from a friend who’s husband works for a drilling company (coordinating and hiring contractors) the Railroad Commission is their worst nightmare. They hate to deal with them and it causes them a lot of hassle. Plus, to petition the Commission to get your rights taken from you is a lot of time and effort for the driller. They would much prefer you just sell your soul than to have to fight you for it.

Now, they might be able to drill in an area without everyone’s consent, but if your property is in the way of the path they plan to drill in, then they really need you to sign so they don’t have to spend the money and effort to turn the bit and not get the straight line they want for drilling.

I don’t know the facts, but have read from two comments on this forum recently that if you lease your rights you get something like 13% of the royalties and if you don’t sign, you get 100% but it takes longer and you have to wait until after all the drilling is done. So, with all that in mind, they want your rights in a big way. Plus, (I don’t know about Petrocasa) Cherokee Horn is not the drilling company. They just come in and get all the leases and then sell those leases to the drilling company - I’m sure for way more than your signing bonus. So they stand to make quite a profit, drilling will not be delayed, the Commission will not be involved and everyone seems agreeable if 100% of a neighborhood signs.

So, I am quite happy to throw away the prepared contracts they leave on our door and mail us routinely. I don’t take their calls and they best not find my email address! If there’s any little thing I can do to make this harder for them…I’m on board. Plus, I’m a woman of faith and I’m praying with confidence that God will take care of this. Hopefully by keeping them from drilling - if not then keeping my family safe.

12

Hello all, I am new to this site and have read with interest Amelia’s post. I have been looking for a place to talk with other mineral holders to possibly get some support and help about leaseing/selling and such. I think the only lie I haven’t been told is that the Lord has finally returned. Anyway, not that I am knowledgeable but, it may be an idea to contact the oil and gas commission regarding your questions. Wouldn’t they be fully aware of what the companies can and can not do? It may also be an idea to contact the BLM office. At the very least they may be able to point you in the right direction. I hope this is helpful for you. Annemarie

13

As an oil and gas attorney I see questions like this daily. Like any other business there are some reputable landmen and some less than reputable landmen out there. A good oil and gas attorney (with real experience) can be very valuable in these matters but if you only own a small tract there isn’t much profit in it for you after you pay an attorney for his/her time. Still, I would never attempt to deal in minerals or real estate without a competent attorney representing me. JIM

Annemarie Menard said:

Hello all,
I am new to this site and have read with interest Amelia’s post. I have been looking for a place to talk with other mineral holders to possibly get some support and help about leaseing/selling and such. I think the only lie I haven’t been told is that the Lord has finally returned. Anyway, not that I am knowledgeable but, it may be an idea to contact the oil and gas commission regarding your questions. Wouldn’t they be fully aware of what the companies can and can not do? It may also be an idea to contact the BLM office. At the very least they may be able to point you in the right direction. I hope this is helpful for you.
Annemarie

14

I recently had to do some research on oil and gas leases because a broker was trying to sign up the mineral owners in my rural area (the process is stalled for now). I’ve done lots of contract work in the past but nothing on oil and gas. There are some specific issues with my own property which I wanted to address. I learned an important thing in response to this question about “holding out”. The legal term “unleased mineral owner” refers to any property owner who holds out. They can force you into the pool, but if you didn’t sign a lease, regardless of what you may be paid down the line, they can also bill you for a portion of the exploration and development costs of the well. Not signing puts you in the oil business. Do you want to go there? Better to negotiate the best deal you can and sign the lease if everyone else is doing it. Hope this helps. Texas A&M’s real estate department has terrific articles you can find online that explain everything about oil and gas.

Nancy Diraison-Drumm

Amelia said:

Thanks for the concern Karen. I put it “playing” because we more walk around and point out the bugs etc. They have made the area really nice with a concrete walking path that leads to a playground area away from the creek. We use wading boots if we want to walk across any part of the actual creek but mostly we just stay on the sidewalk and point out the bunnies and butterflies. It makes for a nice walk … until they contaminate it with the drilling.


Karen J. Morrison, Member AAPL said:
Amelia,
Totally off topic, but I believe it would be best to avoid playing in a creek anywhere around major cities. People throw all kinds of stuff off bridges. Even as children we were admonished to ‘stay out of the creek’ in the rural areas because animals, living or dead, can contaminate the water even if we don’t see them. There was also concern about crop poisons and fetilizers. In the cities, all yard poisons, etc, run into the creeks.

Amelia said:
Hi Jim,

Thanks for the comments and questions.

Here’s the link to one of the comments about getting 100% - I could be totally wrong in how I interpreted the answer…but that what it sounded like to my tired brain:

http://www.mineralrightsforum.com/forum/topics/any-hope-in-fighting…

Here’s the comment:
NOT LEGAL ADVICE

Dear Mr. Ohman,

As I have stated elsewhere, I do not have much experience with subdivision leasing, so you will have to confirm what I state here with somebody else. But my belief is that if Chesapeake can obtain leases covering 80% of the acreage in their proposed drilling unit, then they can proceed with the drilling without your permission. Yes, once they meet this threshold, which I believe is 80%, then can proceed and “drain” from your property. And it is my additional belief that if their well is successful, you will be treated as a “working interest” owner, like a joint venturer, and you will get paid 100% of your royalties instead of 22% or 25% or whatever they were offering you. HOWEVER, you will have to wait until the well is paid for before you get any royalties at all, which could take a few months or a few years depending upon a host of variables impossible to predict.

Nothing happens to your mineral rights. Nobody can take those away from you without your consent, well absent a divorce case, foreclosure, or other court proceeding. Good luck.

Sincerely,

Philip Wynne



Cherokee Horn has sent out a map several times showing who in our housing development has signed and who has not. We are in a newer small development that is surrounded by older houses. I don’t know how much of the area they have been leasing, but according to the map there are about 40 of us who have not signed yet they say they have over 80% of the area signed. We live on a circle and are one of 3 houses not signed. The other holdouts are pretty scattered through our development which would cause it to be difficult for them to get a straight line without petitioning the RRC. I figure that’s why there is so much pressure.

I have told my husband many times that I wish I had the time to get all us holdouts organized. My “problem” is I have a 2 and 4 year old, my husband and both work full time and I have so many projects and just general housework that doesn’t get done because there’s just not enough time in the day for me. I’m exhausted already! I am considering sending them all a letter, but know I don’t have the time or knowledge to organize anything. When this all started, there was a big group that organized and fought to get more money. At the time they were offering $500 signing bonus which lots of people jumped on. This group was pretty big, I forget how many but I was so crushed when they sent out the word that the negotiations were done, they wouldn’t get a better deal and everyone had 2 weeks to sign and get the new deal of $700. Almost all of them signed.

As to my family’s health? Don’t know if you have heard the news in TX lately but there are cases of leukemia in Flower Mound that are raising lots of concern about air pollution and there’s lots of testing going on. Water contamination has happened in areas around us. They will be drilling right next to a small creek that runs throughout our town (two streets from our home - we walk down and ‘play’ in it all the time) and you know there will be leakage, run off and accidental spills that will contaminate that killing all the wildlife. I am not sure exactly how close the drill will be in feet or anything, but it is about 2 streets over. We will definitely see, smell and hear it! It will be way too close for my comfort.

With all of these kind of things, it’s always after the fact and after the damage is done that we learn the truth. Now that the drilling has been going on a while they are doing air quality testing that shows higher levels of contaminants than are safe. People are getting sick and will continue to get sick. But if you listen to the drilling companies it’s all perfectly safe…

Jim Colley said:
Hi Amelia

I’m just a bit confused, which isn’t hard for me to do. Can you link me to the comments that said you’d get 100% for doing nothing?

The way I understand it is, if you do nothing, you get the least possible royalty allowed by law - not the max. I can definitely tell you (now that I know you’re in Texas) that if you don’t sign up but the majority of the property owners around you have signed, then you can be forced into the pool and get very little and in some cases nothing at all because they could simply drill around you. I’ve seen survey plats from several different gas drilling companies that have done just that.

Do you know the status of your neighbors? Have they all signed or can you still organize a coalition of property owners to negotiate with Exxon enmasse? The old adage “strength in numbers” works in this situation and just might be alot cheaper than paying 3 lawyers like Philip said.

One other thing, you mentioned your family’s health. Are they planning to drill right next door to you or something? How do you feel your family will suffer?

15

The hounding tactics of the oil company are characteristic. The landsmen first come to you in a very friendly manner. If they can’t get you to lease they can get nasty.

(1)The standard lease in Texas is based on what is called a Producer 88 lease. The Producer 88 lease has wording that is not in the best interest of the mineral owner. Some of the large neighborhood associations negotiated drew up their own lease and forced the oil companies to take the association lease.

(2)If you don’t come to an agreement with the oil company, the oil company will go to the Railroad Commission. The Railroad Commission is (I guess by statue) directed to develop the minerals. In other words their mission is not to facilitate the drilling.

The oil company can take one of two approaches:

(A) The oil company can try to force pool you. To do that they have to make you an offer. The offer must be “fair and reasonable”. They then go the Railroad Commission where there will be an investigation and a hearing. You can be heard at the hearing. If the RRC decides that the offer the oil company made to you was “fair and reasonable” you will be force pooled based on that offer.

(B) The oil company can go for a Rule 37 exception. Rule 37 says that the oil company must stay 330 ft of property that is not lease. However, if the company wants to drill a bore that is within 330 ft of unleased property, it can go to the RRC and ask for an exception. That is what the oil companies are doing right now in Tarrant County.

After the oil company asks for a Rule 37 exception, the RRC notifies the unleased property owners. They then have a chance to file a protest within a certain period. If no protests are filed, the oil company automatically gets the exception granted. If at least one protest is filed, then their will be an hearing at the RRC on the exception at which anyone who protested can appear or have a representative.

The RRC decides if their is to be a Rule 37 exception granted based mainly on developing the reservoir. Again, the purpose of the RRC is to facilitate mineral development. If the unleased property is part of the reservoir and it is best from the point of view of getting the mineral in the most effective way, then the Rule 37 exception will be allowed,

What happens then is that the oil company legally and without leasing you can take your oil.

So if the oil company says to you that if you do not lease to them they will get you oil anyway, in a sense that is correct.

There is a way out which is for you to then go to the RRC and try to force pool your property into the unit. Since the oil company is taking your gas anyway, you might as well be in the unit. To force pool yourself you would have to make a “fair and reasonable” offer to the oil company to lease to them.

The above is the way I understand the situation at present. It is going to take a Rule 37 in Tarrant County case actually being heard at the RRC to see how this really does play out.

http://www.mineralrightsforum.com/forum/topics/looking-for-facts-tired-of

16

Dear Amelia,

I don’t know all the alleged “lies” that you were told and obviously cannot comment on conversations or communication to which I was not a party.

However, I would just say that in defense of field landmen in general, we don’t always have all the information that a mineral owner might want from the producer. For example, they don’t keep us regularly updated on rig schedules, drilling locations, lateral locations, seismic results, production levels, and on and on. Much of that is available on the Railroad Commission Web site, but we don’t keep updated on it all, there is far too much information to be able to have all the answers all the time, and have none of our answers change.

And even after we do get requested information and pass it on to the mineral owner, the producer, for a plethora of legitimate business reasons, might change their minds about matters to which they had provided different responses previously.

For example, three weeks ago I made a decent offer to lease the mineral rights from a brother and sister. They agreed, but before we signed all the paperwork the producer, for legitimate geological reasons, decided to withdraw its offer. So was I a liar because I said that we would lease the minerals for the initial terms presented and then did not? No.

Also, a royalty owner called me and was upset because she had not received a royalty payment yet, after I told her four months ago that she should have received her first payment by now. Apparently, the producer did drill a well, thereby perpetuating the lease, but it was in a unit that did not include her acreage, and her unit will be created in another couple of months. So was I a liar because I said she would receive a royalty payment by now? No, the company changed their drilling priorities, and they don’t have time to contact all the mineral owners or even all the landmen every time they change their minds on something.

So while representing something to be true when it is not is obviously a lie, the world is in constant flux, things change daily in the oil-and-gas business, and people aren’t necessarily liars because of that.

Sincerely,

Philip Wynne

17

NOT LEGAL ADVICE

P.S. As far as the concern about one’s lease’s being “flipped” to another company for a profit, I would never lease my own mineral rights before investigating the company who wants to lease them. I would want to know (a) are you a publicly traded company?, (b) what is your capitalization?, © what experience do you have drilling in this area? I was able to get a woman interested in my client’s lease after proving to her that the company who had made her what appeared to be a better deal had absolutely NO experience drilling a well anywhere in Texas. Keep in mind also that before signing a lease everything is negotiable. Ask the company if they will agree to a clause prohibiting them from assigning your lease to another unaffiliated company. If your offer is from a “lease flipper,” they will go into orbit with that request, although the reverse is not necessarily true.

18

Thanks Philip for your reply and info…your situations are interesting but I haven’t yet spoken with or worked with the landman that keeps contacting us, so our situation is a bit different. The lies I am talking about come in the form of their harassing and manipulative letters. Cherokee Horn is using very clever and careful wording to make you think one thing when you read the letter, but if you look carefully, you realize that’s not the case. For example, they have sent us letters stating that almost all of our neighbors have leased and we have no reason to hold out, the map on the back shows an example of the leases they have collected…but when you look at the back of the letter, the map isn’t even our neighborhood or from our town! They also have stated firmly and clearly that if we do not sign we will never get any royalty and could never request it from anyone - even people here have said that that is not always the case and you can go to the RC to make a request. It’s these kind of bold statements that are not completely true but are designed to scare us into a decision we are not prepared to make that I take issue with. I could go on but I don’t have the time or the letters in front of me to give more specific examples. And really it doesn’t matter - it just complicates things and makes me confused about what the real truth is.

Thanks to everyone for all for the comments and info here. I haven’t been able to comment to everyone because I have been busy with work and doing research on the issue.

I have learned that determining if you own the mineral rights is difficult and confusing - to hire someone to figure it out is too expensive for us because we have such a small plot. If you do have the rights it’s in your best interest to sign a lease but not the standard one the landmen offer. It is suggested that you contact a lawyer but when I did he said the things he would change would be rejected and for the size of our land and the little money we would get, hiring him would cost too much. So, I feel stuck and a bit pigeon holed into a position I don’t like but will have to come to terms with. All the suggestions here about what to avoid in the lease are the most helpful as it looks like we will have to do our best to wade through the lease on our own, make requests and see what happens.

At this stage in our lives, our family just doesn’t have the time, energy or expertise to deal with all this but since it won’t go away we will have to do our best. So, all the comments here are really very much appreciated and are helping us try to make some hard decisions.

Thank you everyone!

Philip Wynne said:

NOT LEGAL ADVICE

P.S. As far as the concern about one’s lease’s being “flipped” to another company for a profit, I would never lease my own mineral rights before investigating the company who wants to lease them. I would want to know (a) are you a publicly traded company?, (b) what is your capitalization?, (c) what experience do you have drilling in this area? I was able to get a woman interested in my client’s lease after proving to her that the company who had made her what appeared to be a better deal had absolutely NO experience drilling a well anywhere in Texas. Keep in mind also that before signing a lease everything is negotiable. Ask the company if they will agree to a clause prohibiting them from assigning your lease to another unaffiliated company. If your offer is from a “lease flipper,” they will go into orbit with that request, although the reverse is not necessarily true.

19

Hello!

I am new to the site … wish I had found this instead of another. You sound like a person right down my street, Amelia. Reading your letter felt like I was reading my own except I’m a mom of a 1 year old. My family has been searching for more information as well as people who care about the drilling being too close. We too live yards from what seems to be the same creek.

Hoping you will read this soon as it has been a while since your last posting. Please respond and maybe we can work together :slight_smile:

Concerned Party #2 :slight_smile:

Amelia said:

Thanks Philip for your reply and info…your situations are interesting but I haven’t yet spoken with or worked with the landman that keeps contacting us, so our situation is a bit different. The lies I am talking about come in the form of their harassing and manipulative letters. Cherokee Horn is using very clever and careful wording to make you think one thing when you read the letter, but if you look carefully, you realize that’s not the case. For example, they have sent us letters stating that almost all of our neighbors have leased and we have no reason to hold out, the map on the back shows an example of the leases they have collected…but when you look at the back of the letter, the map isn’t even our neighborhood or from our town! They also have stated firmly and clearly that if we do not sign we will never get any royalty and could never request it from anyone - even people here have said that that is not always the case and you can go to the RC to make a request. It’s these kind of bold statements that are not completely true but are designed to scare us into a decision we are not prepared to make that I take issue with. I could go on but I don’t have the time or the letters in front of me to give more specific examples. And really it doesn’t matter - it just complicates things and makes me confused about what the real truth is.

Thanks to everyone for all for the comments and info here. I haven’t been able to comment to everyone because I have been busy with work and doing research on the issue.

I have learned that determining if you own the mineral rights is difficult and confusing - to hire someone to figure it out is too expensive for us because we have such a small plot. If you do have the rights it’s in your best interest to sign a lease but not the standard one the landmen offer. It is suggested that you contact a lawyer but when I did he said the things he would change would be rejected and for the size of our land and the little money we would get, hiring him would cost too much. So, I feel stuck and a bit pigeon holed into a position I don’t like but will have to come to terms with. All the suggestions here about what to avoid in the lease are the most helpful as it looks like we will have to do our best to wade through the lease on our own, make requests and see what happens.

At this stage in our lives, our family just doesn’t have the time, energy or expertise to deal with all this but since it won’t go away we will have to do our best. So, all the comments here are really very much appreciated and are helping us try to make some hard decisions.

Thank you everyone!

Philip Wynne said:
NOT LEGAL ADVICE

P.S. As far as the concern about one’s lease’s being “flipped” to another company for a profit, I would never lease my own mineral rights before investigating the company who wants to lease them. I would want to know (a) are you a publicly traded company?, (b) what is your capitalization?, (c) what experience do you have drilling in this area? I was able to get a woman interested in my client’s lease after proving to her that the company who had made her what appeared to be a better deal had absolutely NO experience drilling a well anywhere in Texas. Keep in mind also that before signing a lease everything is negotiable. Ask the company if they will agree to a clause prohibiting them from assigning your lease to another unaffiliated company. If your offer is from a “lease flipper,” they will go into orbit with that request, although the reverse is not necessarily true.

20

Hi Melissa,

Wish I had found you sooner, but we already signed. I would be happy to converse with you more and share the info I learned.

I completely oppose the drilling in residential areas and fear for the health of my boys, but I there were a few key things that made us decide to sign.

Mostly the information I learned from a friend’s husband who works for a driller helped me understand things a bit better but it was his reaction to the fact that we do indeed own our mineral rights that gave me pause. Before talking with him I thought it was interesting that we might own the rights, but after seeing his reaction and hearing his words, I felt that we needed to protect our mineral rights and have some sliver of control because the drilling is going to happen. Unless enough towns find that it is harmful and people are forced to stop or the gas prices drop, this will happen. Others stand to make too much money and they just don’t care.

My friend said if you don’t sign, they can pool you and take away your rights. Then you will have no say over what is happening at all - even on your own property. At least with a contract you have some protection and once they start drilling he told me to watch them like a hawk and complain to the rail road commission every time they violate even the smallest thing on the contract. He also said they will be taking out the gas under your house whether you sign our not so you might as well get some money that you can put in the bank. And the last thing he said was that owning your mineral rights today is very rare and you really have something so hold on to them for your future generations.

Now, I’m not here to convince anyone and I will cheer on anyone who wants to fight. But those comments gave me pause and after long discussions with my husband and a meeting with a lawyer, we gave up and signed. We aren’t happy about it, but we are somewhat protected for what that is worth. Now we will just have to wait and pray.

If you want more info, let me know and I’ll be happy to share what I know. The Central Park Neighborhood Association in our town was actually able to negotiate a good contract that they are using as their standard contract now. The lawyer was impressed with what was in it and only suggested 3 changes he would request. But he warned that Cherokee would probably refuse - which they did. It was nothing major so we went ahead with it. We did get $725 signing bonus. Not much but the landman brought the check with us and answered the questions we had. So for us it is done.

Melissa Farmer said:

Hello!

I am new to the site … wish I had found this instead of another. You sound like a person right down my street, Amelia. Reading your letter felt like I was reading my own except I’m a mom of a 1 year old. My family has been searching for more information as well as people who care about the drilling being too close. We too live yards from what seems to be the same creek.

Hoping you will read this soon as it has been a while since your last posting. Please respond and maybe we can work together :slight_smile:

Concerned Party #2 :slight_smile:

Amelia said:
Thanks Philip for your reply and info…your situations are interesting but I haven’t yet spoken with or worked with the landman that keeps contacting us, so our situation is a bit different. The lies I am talking about come in the form of their harassing and manipulative letters. Cherokee Horn is using very clever and careful wording to make you think one thing when you read the letter, but if you look carefully, you realize that’s not the case. For example, they have sent us letters stating that almost all of our neighbors have leased and we have no reason to hold out, the map on the back shows an example of the leases they have collected…but when you look at the back of the letter, the map isn’t even our neighborhood or from our town! They also have stated firmly and clearly that if we do not sign we will never get any royalty and could never request it from anyone - even people here have said that that is not always the case and you can go to the RC to make a request. It’s these kind of bold statements that are not completely true but are designed to scare us into a decision we are not prepared to make that I take issue with. I could go on but I don’t have the time or the letters in front of me to give more specific examples. And really it doesn’t matter - it just complicates things and makes me confused about what the real truth is.

Thanks to everyone for all for the comments and info here. I haven’t been able to comment to everyone because I have been busy with work and doing research on the issue.

I have learned that determining if you own the mineral rights is difficult and confusing - to hire someone to figure it out is too expensive for us because we have such a small plot. If you do have the rights it’s in your best interest to sign a lease but not the standard one the landmen offer. It is suggested that you contact a lawyer but when I did he said the things he would change would be rejected and for the size of our land and the little money we would get, hiring him would cost too much. So, I feel stuck and a bit pigeon holed into a position I don’t like but will have to come to terms with. All the suggestions here about what to avoid in the lease are the most helpful as it looks like we will have to do our best to wade through the lease on our own, make requests and see what happens.

At this stage in our lives, our family just doesn’t have the time, energy or expertise to deal with all this but since it won’t go away we will have to do our best. So, all the comments here are really very much appreciated and are helping us try to make some hard decisions.

Thank you everyone!

Philip Wynne said:
NOT LEGAL ADVICE

P.S. As far as the concern about one’s lease’s being “flipped” to another company for a profit, I would never lease my own mineral rights before investigating the company who wants to lease them. I would want to know (a) are you a publicly traded company?, (b) what is your capitalization?, (c) what experience do you have drilling in this area? I was able to get a woman interested in my client’s lease after proving to her that the company who had made her what appeared to be a better deal had absolutely NO experience drilling a well anywhere in Texas. Keep in mind also that before signing a lease everything is negotiable. Ask the company if they will agree to a clause prohibiting them from assigning your lease to another unaffiliated company. If your offer is from a “lease flipper,” they will go into orbit with that request, although the reverse is not necessarily true.