Four Sevens: We'll be "competitive" on South Side

Check out the S-T Saturday for this report from our energy reporter, Jim Fuquay, who's also an author to this blog:

Four Sevens Energy, which has been signing up leases on the Fort Worth South Side for Chesapeake Energy, says it will continue pushing for leases on the South Side even though XTO Energy and its leasing partner Fort Worth Energy recently reached a deal with a coalition led by the Ryan Place neighborhood association.

The Ryan Place agreement calls for a $10,000-per-acre lot bonus, significantly greater than the $4,000 that Four Sevens and Chesapeake have been offering neighborhoods.

The Berkeley Place neighborhood association, part of the coalition with Ryan Place, also tells the S-T that it expects soon to receive lease offers from XTO. Thus far, Berkeley homeowners have only received offers from Four Sevens and Chesapeake.

Both the Ryan Place and Berkeley associations are endorsing the XTO offers.

Four Sevens isn't saying whether it plans to increase its offer. It tells the S-T only that it expects to be "competitive."

-- Scott

Click here for the full report on the Ryan Place/South Side coalition lease agreement.

(Photos: Bill Conley and Dan Roberts from the Ryan Place association, Berkeley Place July 4th parade)

Comments

[K. Montgomery]

South Hills N/A never got a chance to organize or negotiate because many people took the first money that was offered. Other neighborhoods have been criticized because people NEVER think they get enough money. Rather than get caught up in the bad feelings, and since so many people in South Hills have already signed leases, the leadership felt it was better to stay out of it. I totally agree with them. If you own your property, you have every right to keep asking the landmen for more. Just remember that someone will ALWAYS get more than what you got.

[BH]

M* so what are you saying> did you sign for a lesser amount than

the rest of them? Bonus? lot size allotment? what was your deal?

[M. Branson]

I am extremely annoyed with the last set of officers for the Fairmount Neighborhood Association. When I was contacted by Four-Sevens about signing a lease, I had them call the Fairmount Neighborhood Association president and gave them that telephone number, saying I wouldn't sign until negotiations had gone on with the neighborhood powers-that-be. Then I called the president's wife, who HAD talked to 4-7's; she told me that the association was NOT going to negotiate, per her husband, then president. So I signed. Now I read that the new, incoming board did negotiate. This is just plain dumb!

[Golfman]

Is the Barnett anything like the California Gold Rush?

Smart companies stay out of the cities from what I can tell.

[Landman1]

You are welcome Mr. Humphries. Best wishes and have a good Thanksgiving.

[B. Humphries]

landman 1--thank you, I appreciate your comments.

[landman1]

You may have done this already, but you can also check the Tarrant County website under Real Property Records to see if your lease has been assigned. It might take some research with all the activity Chesapeake is doing in Tarrant County but it can be done. If your lease was taken by 4-7's then it would have been assigned from 4'7's as assignor (Grantor-4'7's)) to assignee (Grantee-Chespeake), in the event they did assign it. You can check Tarrant County online records back until the mid 1970's free of charge.

There are just a lot of inexperienced people out there doing leasing. Some of the independent land outfits hire people straight out of college with no experience. I've heard of some independent land outfits hiring hair stylists just because they were hot looking young women. As I stated, it makes the true land professionals look bad. I'm all for certification and licensing. At least that would call for some type of professional education and training. Sorry you have had to go through these issues.

[B. Humphries]

landman 1, thanks. Matt Blocker with 4/7s was the landman for my lease. He is a 23 yr. old guy from Shreveport, La. with no experience, or knowledge of Ft. Worth. He even invited me to come
to his apt. for him to notorize my lease,I declined that, hello--
The lease he mailed out did not include my lot size, It had a 0 for it. I had him re-do the lease to show my lot size, .209

His cover letter said 4/7's would be drilling the well. In the near
future and gave a location.
My Lease is with Four Seven's Energy Co.L.L.C.

With what the lease says, the cover letter says, and the fact that
he never mentioned to me either verbally or in writing that my lease
would be sold to Cheasapeake energy, I expect 4/7's to honor their
lease agreement with me and drill the well, at the location stated.

[landman1]

Mr. Humphries, have you put in a call to the OKC Chesapeake office?

You might check their website and find out who the company area landman is for your area. Each in-house landman is assigned a specific area.

[B. Humphries]

Jim, Just because you say this, doesn't make it right. The Bonus
Money is the most any of us lot owners will see for our leases.
The royalty paid, as we have all been told won't be enough to
even pay our propety taxes every year.

Our bonus offers should not depend on actions from a united force.
They should be fair and square for all. Either legally, morally
or for good business relations for the goodwill of all the people of
Fort Worth.

[Paula]

B Humphries--South Hills does have a neighborhood association. You can find contact info in the city's NA database at http://www.fwlinc.org/neighborhood/process.asp. I'm a new homeowner and moved into the neighborhood in July. I have seen a couple of the SHNA's newsletters that have been left at my door, but I don't recall the drilling/rights issue mentioned in them. I'm certainly going to look into it though.

[Suzette]

B. Humphries, I feel for you and I understand what you are saying. I hope that you are emailing the City Council members and the Mayor because that group of people can do more for us than any other at the moment. They are in charge of what goes on in this City, they can restrict many more things concerning Gas Drilling than they would like for you to believe. I hope that you are sending them your concerns and going to the council meetings and making Citizen presentations. Hang in there and please stay involved.

[Jim Fuquay]

This is a general response to the point about different neighborhoods receiving different lease offers. There is no such thing as a "standard" bonus payment, nor a "standard" royalty payment. Every single term in a lease is negotiable, including where the drill site is located.

Two big variables affect how rich a lease a property owner can command. One is negotiating from a position of strength, whether because the landowner controls a lot of acreage in a desirable location or is part of a group of landowners who work together. The second is the level of competition for the property. That's why Dallas/Fort Worth Airport, country clubs, municipalities and well-organized neighborhoods have won the best lease terms: They control a lot of land and they manage to drum up strong competitive bidding for their property.

In general, lease terms have become richer as the Tarrant County portion of the Barnett Shale has developed and has proved to be one of the richest portions of the field. Judging by reports we have reported in the Star-Telegram, lease terms have gone from about a 20 percent royalty and a bonus based on about $2,000 an acre or less, to about a 25 percent royalty and a bonus ranging from about $4,000 an acre or more.

[B. Humphries]

Correction to the above post. I live on the border of districts
6 and 9,,,not 7. 1/20 divides me.

[B. Humphries]

I live in South Hills, right on the border of district 6 & 7 off
of I/20 between Westcreek and McCart exits. I signed a lease with
Four Sevens, for Cheasapeake Energy July 29,2007. My offer was
3,500 an acre. I waited 7 weeks for my bonus check.
The cover letter that came with the lease stated that a gas well
was being drilled in the very near future at Trail Lake Drive.
It gave the impression that to be included in any royalties from this well I should sign the lease ASAP.
I have not been able to find out what and where my unit boundries
are. If I have a neighborhood association, I am not aware of it
even though I have lived here for over 30 yrs. I have not seen or
heard anything mentioned about South Hills as far as drilling goes.
I read the rig reports and permit reports and no mention of a well
anywhere near Trail Lake Drive is reported.

I think it is bad business, in very poor taste, that the leasing
company's are changing their offers of lease terms at will. It can
only cause acute resentment against them. It is in very bad form
that I sign for 3,500 and a half mile or less away from me someone
can sign for 10,000. It makes me feel like an idiot. That I have been had for signing without a lawyer or several hundred people
sharing an opinion with me. The company's like Four Sevens are the
cause of this. It is also not right that these neighborhood associations can stipulate where the well pads will be, the pipelines will be or the disposal wells will be. All that might wind
up in my neighborhood,for their neighborhood, and I don't share in
their royalities. The leasing agents are unregulated, unfair and out
of control. The City should be involved in protecting us mineral
right owners from the unscrupulous out of control, at will, leasing
terms going on. Also, when we sign a pooled lease, it should be
stipulated in the lease what our unit boundries are.