N. Benbrook holds out, gets lease competition

Homeowners in North Benbrook began receiving lease offers six months ago from agents acting on behalf of Chesapeake Energy, but things are heating up.

Here's the update:

• Chesapeake -- through both Four Sevens and Colt Exploration --initially offered a signing bonus of $4,000 per acre and 25 percent royalty, but told homeowners at a recent meeting that they would bump that up to $5,000 an acre, said Morris Scales, an organizer in the North Benbrook Neighborhood Association. The royalty is 25 percent and the term five years. Chesapeake has sent offers to virtually all of the North Benbrook area, except parts of Westvale, which may be due to uncertainty over drill sites, the neighborhood says. Scales says the neighborhood believes Chesapeake may be preparing to increase the bonus again.
• HTP and Associates, which the neighborhood believes is signing leases in Benbrook on behalf of Paloma Resources, has sent lease offers broadly to North Benbrook, offering a $5,000 per-acre signing bonus, 25 percent royalty, three-year term, and two-year option, Scales said. HTP also has "indicated they plan to up that to $8,000," Scales said.
• Fleet Oil & Gas, which has been trying to sign leases in the Timbercreek/Trinity Gardens/Trinity Estates neighborhoods in Benbrook, has sent out offers to parts of Westvale, Scales and Gayle Hebert, president of the North Benbrook association, said. They did not know what the terms were. A Fleet landman, who Scales said is the son of a local Italian restaurant owner, sponsored a pizza party last Saturday to try and sign leases.
• North Benbrook has also been trying to interest XTO Energy, and an XTO representative contacted the neighborhood association on Friday to ask whether it would be interested in an $8,000-per-acre signing bonus that would cover the area, Scales and Hebert said. Hebert said the response from the association's attorney was "probably not," but the neighborhood doesn't think that chapter of the story ends there. "XTO has told us they are serious about coming into the area," Scales says.
• The association has been organizing since June, after Chesapeake quickly signed up large numbers of leases in Benbrook's Pecan Valley neighborhood. The association has broken the neighborhood up into teams representing Brookhaven (220 homes), North Benbrook Central (750 homes), and North Benbrook East (375 homes), and assigned two "street captains" per street to pass out fliers, gather names and contact information, and collect the $50-per-household fee for the attorney the neighborhood plans to use, Hebert said.
• The association's attorney has also suggested that it incorporate Fort Worth's Western Hills neighborhood into the North Benbrook negotiating group for more clout, Scales and Hebert said. Representatives of the two neighborhoods were due to meet this weekend, Scales said.

Hebert said the neighborhood has been able to get homeowners to hold off from signing since Chesapeake signed up most of Pecan Valley.

Apart from that neighborhood, "I don't think even 10 percent have signed," she said Saturday, as she was walking through her neighborhood passing out fliers and tickets to the next neighborhood association meeting.

That meeting is 6:30 p.m. Nov. 27 at Waverly Park Elementary School. The meeting is open only to Benbrook East property owners (Sunset Terrace, Dunlap Addition, Westvale, and North Benbrook Addition), Hebert said. Property owners must have tickets from the association to attend. Click here for contact info.

After that meeting, the neighborhood is looking to hold another meeting to bring the Brookhaven, North Benbrook Central, and North Benbrook East groups together, possibly as early as December, Scales said.

Some of the North Benbrook drill sites are controversial. Hebert said the neighborhood is largely OK with one potential Chesapeake site off of Mary's Creek, near Pecan Valley.

But both HTP and Chesapeake, and possibly Fleet, are interested in drill sites in Palomino Estates, a subdivision in the middle of North Benbrook that is under development, Scales and Hebert said. The neighborhood has already put the city on notice that it will oppose any drilling in Palomino Estates.

"It's too close to homes," Hebert said.

It's not clear how the plans of the drilling companies would be affected by the unavailability of sites in Palomino Estates, she and Scales said. The neighborhood isn't clear on where XTO might drill from.

Leasing activity has picked up throughout Benbrook. Competition for leases has broken out in Mont Del/Country Day Estates and homeowners in Timber Creek/Trinity Gardens/Trinity Estates are trying to foment a lease battle. Colt is working leases in North Benbrook for Chesapeake and in Timber Creek for XTO.

We want to hear about what's happening in your part of Benbrook! To fill us in, please drop us an email at snishimura@star-telegram.com.

-- Scott

(S-T photos: Pecan Valley Golf Course, Pecan Valley Park)

Comments

[judge]

B, tell people to Google Judon Fambrough at Texas A&M University. He has an OGML booklet (free) which they can download which might prove helpful. Also, tell them to ask company reps how they intend to get pipeline access to the well once drilled. You can't IP the well or produce and sell gas until you have a pipeline.

Keep posting, I like hearing your viewpoint.

Also what is the name of the Willie Nelson operation you mentioned in an earlier post? A landman in our office told me about it and said if natural gas was above $5.00/MCF it was profitable to Willie as an alternative. Willie is the man. I do not always agree with his politics but as a nice/good hearted man, he is tops. He has done a lot for farmers over the years.

[BH]

Why are the homeowners having to pay a fee for an attorney to
guide and educate them on the leases's? To Broker a deal for them?

Don't the landmen or lease brokers who represent the Energy's

company's for leases have any expertise or knowledge of the

contents of the lease's they want signed so they can guide and

educate the public with their questions? Don't they have any

authority at all to negotiate the terms of a lease?

Are Landmen and Lease Brokers really just gofers? who have a notary

stamp in their pockets, which is an easily obtained tool, by

submitting an application, paying a small fee and getting a bond.

I have read that these hired attorney's are taking advantage of the

mineral owners, in fee's and percentages of their royalties.

And the lease brokers are flipping the mineral owners leases for

hugh sums of money. The only way to get a Fair Deal, neighborhood

groups, its to eliminate these middle men and deal directly with

the Energy Company of your choice. Free Trade Market, what a joke

that has become with the leases in the Barnett Shale. When no

standard of a Value for your minerals has ever been established.

[B.R.]

Cheasapeake say's they will sue the city, if necessary, to get their
way on the disposal wells. How many they want and where they go.

They are either holding the city council hostage or intimidating
them over this issue. This is what happens when you let a Giant
take over your City.

If this issue between Cheasapeake and the City can't be resolved
peacefully (the city letting them have their way) I can see where
the comment by Clayton might be the next step for Cheasapeake, to
sell out of the Barnett Shale.

[Clayton]

Chesapeke says they will sell 1.3 billion in assets to offset the 2 year curb in production reported in the Star-Telegram. I hope that anyone who signs with them isn't part of a stock market strategy to increase stock value by increasing net holdings before a big sale. They would stand to make more money then they pay out. 3 or 5 years won't matter if they don't drill. 25% royalty of nothing is still nothing. Being locked into a lease with no production can make anyone missout.

[Texas Ex]

At what Chesspeake pays per acre bonus, not really.

[Tom Fowles]

Chesapeake has indicated that they will be waiting for gas prices to go higher before beginning drilling. They lock a signer into a 5 year contract and may not drill until 4yr 11 mo later. Most of the drilling companies in the area are 3 year leases. Anyone signing a 5 year lease would be a fool.