Blogging the Barnett Shale has received a number of emails from homeowners who've received lease offers, and live in neighborhoods that have little or no organization. What to do next? We posed these questions to Matthew Hudson, president of the Fort Worth League of Neighborhoods, and he obliged us with some answers. These pertain largely to homeowners who live in Fort Worth, but his answers are broadly relevant:
Q: My neighborhood has been receiving offers, but we don’t have much of a neighborhood association. I’m not sure there is a ringleader. How can I find out if we have one?
A: The best system is to use the database tool on the city's website. When a neighborhood association forms, it must become "recognized" by the city of Fort Worth through the Community Relations Department. This process helps establish legitimacy to the organization and is a requirement to be a member of the Fort Worth League of Neighborhoods. Click here to visit the city's site and see a list of Fort Worth neighborhoods and association contacts. One note: this information is not 100 percent accurate. It is up to the NA to keep the city informed of changes in contact information, and this does not always happen. However, you usually can meet with success.
Q: We aren’t organized. How do we get organized?
A: First, there are two types of "organized." 1) Establish a Neighborhood Association. 2) Organize your neighborhood on this topic. Obviously, we recommend the first option. Unfortunately, it takes a controversial issue to get people to know their neighbors on the next street, but the most livable neighborhoods in our city all have active neighborhood associations who spend more time on "being neighbors" than they do on issues. So, if it's gas wells that bring us together, at least make it a lasting, sustainable organization that can improve the quality of life within the neighborhood on the long term. Contact the Fort Worth League of Neighborhoods via their web site at www.fwlna.org or contact the city's Community Relations Department at (817) 392-7525. We are both resources that will guide you in establishing a neighborhood association in your area.
Q: Our neighborhood started getting offers a couple of months ago. Is it too late to organize?
A: Never. In fact, the common tactic of energy companies is to say that the offer is "one time only" and you must act now. The faster they can convince people to sign, the lower the deal they have to make for the rights. Even if you the last 20 homes, it is still better to work as a group.
Q: Why organize?
A: There are many reasons to organize, but the main one is to get "economies of scale." We recommend that all NAs hire a land attorney. Leases are tricky and you want to be sure that you get the best deal and that you do not get tripped with issues like subordination. By banding together, the group can hire one attorney and split the costs -- sometimes as little as $25 a person. This is a small investment that can save you hundreds of dollars! In addition, the NA can negotiate a higher royalty and bonus and even get money for the NA to use for parks or the school.
Q: Any more resources for what to look for in a lease?
A: For more information on: "what to look for on a lease:" see the Fort Worth League of Neighborhoods site and view a presentation for our recommended land attorney. Here's the link.
WHAT IS OUR QUALITY OF LIFE WORTH? If we even got to $24,000 for the amount of land many of us have in Meadowbrook and Eastern Hills, about 1/4 acre and maybe up to about 1/3 acre....we would get about $6,000 to $8,000.
For those with an 1/8 of an acre...5,000 square feet, which is what most folks have for a lot size in many parts of Fort Worth, they would only get $3,000 if it got to $24,000 per acre. PEANUTS! When we take it down to reality, which is what we need to do...then even $50,000 per acre is not enough for what we will lose in the long run, while they make billions, and while our property values fall far lower than we will ever make on this. Think this through folks and add up the numbers....for me and many others, they just do not add up. What we are being offered is not near enough to make it worth while in the long run.
The acreage price sounds great until you break it down into the pieces of pie that we all have. We will never make anything close to what folks think they will. When they are hearing the price per acre...very few have an acre and when folks realize that we are sharing 25% in royalty payments with 160 to 340 other folks...that also substantially reduces the amount they get, which also relates to PEANUTS.
We are worth more than that by a long shot. I am not being greedy, it is just I cannot put a price on what my piece of mind, my health, my quality of life, and my neighbor's too at anywhere near where we are now. In the meantime, we get to see how all this pans out for the other neighborhoods that have signed and set toward being having active drilling in the next few months, see if the city is going to go against neighborhoods in allowing high impact wells, despite what we want, see what the city is going to do to allow on site dumping of waste, which the gas companies say is harmless.....it contains some very hazardous chemicals....frac pits close to where your children play....what is your piece of mind worth as far as they are concerned? In later years will you be glad you made the same choice? If we find out later that our cancer rate is higher, that there are chemicals that have leached into our precious acquifers, trucks that are spilling waste into our Trinity River, which by the way, Don Young found was happening just a week ago, despite denials. Look at more than the money, because in the big scheme of things, that money will seem paltry in comparison. Choose wisely and don't listen to hype. They want you to think that there is some rush to do all this. There is not. They are not going away....so WHAT IS THE RUSH to sign anything, except so that they can play poker with your leases and sell them to someone else? Every time that happens, and it does, they make a big profit, especially for those that thought they were going to miss out....they did...by signing! Our quality of life is worth far more than you think.
Posted by: G. Giles/EHHA | October 22, 2007 at 08:05 PM