Few rules in lease negotiations...

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.

Click here to read about the details of Woodhaven's community lease.

Click here to read the details of Dallas/Fort Worth Airport's gas drilling deal.

Click here to read the details of the Tarrant Regional Water District's gas drilling deal.

Click here to read about TCU's gas drilling deal.

Click here to read about Colonial Country Club's gas drilling deal.

Click here to read about the University of Texas at Arlington's gas drilling deal.

-- Jim Fuquay

Comments

[Adiriana]

"Eventually, coal inventory will exldpoe and the coal miners will be mining at a loss, also"...Good point henry and considering that the Illinois coal fields are less than 100 miles away from where I live, I missed that point entirely...The state of Illinois has less than 30 mines at work it seems and they used to have hundreds...Missouri has only 2 mines left out of the 200 or so that used to be active...I see that federal tax dollars are being used to reclaim mines that closed from '77 and earlier...

[April]

My suggestion to everyone who has not signed a lease yet is to not

even consider signing one unless its for $15000 an acre. Slow down

take your time. There have been so many leases done already that it

could take many years to get a well, so just wait it out and get

the mega bucks like some have. Don't listen to any landman, deal

with the companys direct. So far, there has been only one landman

on this blog with any integrety.

[Basic math]

Leases are not supposed to be regulated as long as they meet the statute of frauds. That is why they call it a free market. The person who keeps making complaints has no conception of what a free market is and is so uneducated it is beyond the pale of belief. She is mad because she did not receive the same person as Joe Blow across town.

I am sure now I will be threatened by this obviously very disturbed person.

[South Arlington, Cherry Creek Estates (Matlock and Turner Warnell)]

Wyldfire broker for Hollis R Sullivan is offering $2000.00 per acre and 22% royalty. This is to low, when questioned about the signing bonus representives from Wyldfire had no comment.

We need to band together, contact me so we can get started

Dave Galloway
214 868 6521

[B King]

I have seen very little about drilling plans in SW FTW, specificly the Wedgewood area. Fliers have gone around this past weekend from our Neighborhood Association and meetings are scheduled Wed. and Thurs. evenings to discuss lease proposal being sent out. I personally have not seen a lease proposal, but I live in the area identified in the NA's flier. Do you have any info on planned activity, who the players may be in our area, and the extent of the lateral drilling affecting those of us who live in the middle of residential subburbia. Thanks for any comments.

[Terry]

How about the contractors who buy houses, put in new carpet, double the price, thus they sit empty so overpriced, and our little neighborhood is going down down. It's a pity!

[R. E. Guru]

Some areas of town have seen home values increase in the past few years. Do the people who sold their homes sit at home & cry about how people have taken advantage of them for buying their house for $100,000 when they are now worth $200,00? How about the people who buy houses for cash whose signs you see all over town? Shouldn't we worry about people selling their houses for too little money? Who will protect us against our own stupidity if we can't get the government to do it?

[B. Humphries]

What this means to hundreds of us is that lease's are unregulated.
so "Buyer Beware" has a new meaning in urban drilling.