$22,000 bonus in Southeast Arlington

It will be a happy signing ceremony in Southeast Arlington this coming week.

The bidding process used by the Southeast Arlington Property Owners (SEAPO) group has gleaned a record signing bonus of $22,000 with a 25 percent royalty. The term of the mineral rights lease is three years with a two year option. In order to get the two-year option, the drilling company would have to pay the full bonus amount again, said Jim Colley, one of the primary organizers of the neighbhorhood group. Click here to visit SEAPO's web site.

UPDATE: Click here to read staffer Bill Bowen's story on the SEAPO deal.

In less than four weeks, the group organized, gathered a list of residents, organzied a 10-member negotiating committee and solicited bids from drilling and mineral rights  leasing companies. The group also held informational meetings at a local church that also included Spanish and Vietnamese language translators. The neighbhorhood represents more than 7,600 residential parcels spread across 1,895 acres. It is bounded by Interstate 20, Matlock Road, Texas Highway 360 and Arkansas lane.

"We pretty much delivered the entire neighborhood so we negotiated from a position of strength," Colley said.

The winning bid was submitted by Paloma Resources representing Chesapeake Energy.

Jerri Robbins, manager of public relations in the Barnett Shale field for Chesapeake Enrgy, wouldn't elaborate on the record-setting deal.

"There was a bid process and Paloma won," Robbins said.

The bid tops the previous record of about $18,000 in southern Fort Worth that was reported by property owners but never confirmed by the company.

Lease signings for the Southeast Arlington neighborhood will begin next week at the Mayfield Road Baptist Church and the following week at the Vietnamese Martyr's Catholic Church at the intersection of Mayfield Road and Collins Street. 

-- Bill Bowen

(Photos: Bowie High School football, girls basketball, graduation)

Comments

[Norma Reynolds]

Lease has expired and now we get letter from Turner Oil and Gas Properties, Inc. saying that we signed with Chesapeake, that the lease has expired, but that they want to renew for a very low sum in comparison to what the original terms were. There is also no mention of what the royalites will be. In addition, they say there has been little or no activity in the area around my property when even the Chesapeake website lists two of the four, soon to be five well sites that are very active with two miles of my home. What are they trying to do. We need to band together again. If there is no activity, why are all the trucks moving in and out, well heads evident and pipelines being laid all around?

[Marc]

IT HAS BEEN 24 BUSINESS DAYS - AND, NO SIGNING BONUS CHECK HAS COME YET !!!

The residents of SEAPO were given a voucher for 20 BUSINESS days - SEAPO website says "Don't Panic" if they are a day or two late - WHAT ABOUT 4-5 DAYS LATE?

When I call Paloma, they send me to another number for Holland, then Holland sends me to another number for Grande Energy - and NO ONE NO WHERE has a List of PAID/UNPAID residents.....

So, to recap - We have NOT been paid yet and it has been well over the 20 BUSINESS DAYS stated in our legal voucher. And, NO ONE can verify if our checks went out. And, NO, not that checks have been mailed - But, rather LOOK UP MY F*&CKIN' ADDRESS AND TELL ME SPECIFICALLY IF MY CHECK HAS BEEN SENT!!!!!!!!

What a PISS-POOR operation. With what I have seen through this whole process - Good-Luck ever seeing a ROYALTY check.

I even called Chesapeak directly - And, they tell me that they do not pay the upfront bonus check - Paloma does. Then, Chesapeak buys all the leases from Paloma. I stated that technically my contract is null-and-void since I recieved NO Bonus check within the stated time period - And, Chesapeak stated - It is still a legal and binding contract even if the bonus money is late (Or not paid) by Paloma. What the F*&ck!!!!!

Can any one of you EXPERTS at SEAPO, PALOMA, or CHESAPEAK tell me where my friggin check is... And, has it even been sent (Mine specifically).

[Johnny B]

We were told that there would be several different drilling sites around the area .... NOT JUST NEW YORK & MAYFIELD .... Yes they do plan on drilling more than just one well ... There equipment is some of the best I have seen ..... Go north on 360 , and you will a see new well on the GM plant .... That's Paloma , and man it is state of the art !!! Sign with SEAPO ....

[SEAPO Committee Member]

For the CORRECT Lease Signing Meeting Times, go to www.SEAPO.org. There seems to be a problem with the reporters getting the times and dates right!

Also, a video of one of the Neighborhood Information Meetings is posted on the website under the "Presentations" tab. Take a look if you have any questions about the whole gas drilling process.

I'm happy to see so many other groups forming. Good luck to all and I hope you get your own record-setting deal.

Of course, if the gas companies would just offer homeowners a fair deal to start with, it would save everyone a lot of time, trouble, and expense. Don't you agree? But, business is business....

Jan

[Erin Sharrieff]

I would like to let everyone know that When we got home today, there was a notice from Carrizo saying that they are having a signing meeting March 27th at the Bob Duncan Center. They are spelling out there deal that they feel SEAPO didn't, but it still doesn't really sound as good as Paloma's deal. They are offering two different offers, which both include their cost on the back end of the royalties. Their plus that they are trying to sell, that Paloma only has the one well that can't reach our entire area to their several drill sites in different places so we would get our royalties faster.

Also they want us to know that they have better state of the art equipment that would start drilling faster then Paloma. Another turn off for me is that they didn't mention where their sites were, or how many sites they have obtained. Honesty is what I am looking for and Carrizo has yet to come clean with everything. I still have yet to sign my lease with Paloma, but I have several questions for them when I go because I want to make sure I have the legalities are in tact, but if Carrizo really wanted our business, they should have did what they could to beat Paloma out. They didn't do that so I wish they would really give up the fight.

Does anyone know if Paloma is planning any other sites other then the Mayfield and New York?? IF not how have they assured us that the drilling will reach our area?

[Johnny B]

Oh Yes , one more thing ...... Seapo is the Real Deal !!!! We got our Bonus Check ( Voucher thats valid after 20 business days ) .... Seapo got NO MONEY EXTRA !!! They are NOT getting anything extra ..... They , we , are all neighbors who are informing everyone , we banded together to get a record deal !... YOU NEED TO SIGN WITH SEAPO !!! It's not too late !! Thank you Jim Colley , thank you SEAPO !!!

[Johnny B]

We just signed our gas oil lease with Paloma Resources through the Seapo deal ( seapo = South East Arlington Property Owners ) . Our bonus check is 7028.00 plus a no expense 25% royalty !!! Thank You Seapo !!!!!!!!

[hope_I_own_mineral_rights]

Seapo Homeowner: From blog dated October 15, 2007,
"West Pleasantview and surrounding areas in Hurst - Dale Property Services on behalf of Chesapeake Energy, $2,000 per acre, $400 lot minimum, 25 % royalty on a five-year contract." If this is the deal your friend has then they probably haven't drilled yet. The "term" is how long the company has to start drilling. With a 3 year term they have 3 years to start drilling. Once they drill and recover gas in paying quantitys the lease will stay in effect...20 or 30 years they are saying. The gas rigs are just there when they drill and then they move them somewhere else to drill.

[Seapo Homeowner]

They live in Hurst....not sure what company.
They only received a $400 sign on bonus.

Once this 3 year lease is up does the well go down and the drilling stop???

I feel sorry for anybody who has to look at this thing going up in their outside view. Luckily I live in a well established neighborhood.....so I am glad I will not see it at all....but I wonder if I will hear the loud gushing of air noise sometimes I hear from the one by my work which is about a mile away.

[hope_I_own_mineral_rights]

Seapo Homeowner : 25% royalty x 0 (nothing) = 0 . The bonus would be paid before they drill so it wouldn't matter if they found gas or not(they will). Where is your friends gas well and what company is doing it ?

[Seapo Homeowner]

Is it true that no one will get royalties until something is found!!
My friend said their gas well is capped off and they have not seen any royalties for over a year now.

[Learn from my experience]

Marc:
If you choose not to sign with anyone, it does not hold up drilling. The gas company can begin drilling as soon as they secure 70-80% of the leases in the area. And, YES, they can "suck the gas out from under your property". They just don't have to pay you a signing bonus or a fair royalty contract. You'll get something in royalties, but they will be on the gas company's terms...not terms of your choosing.

There is an "imminent domaine" clause in the Texas state laws when it comes to mineral rights, so you could be left in the dust if you don't sign SOMETHING. It would be in your best interest to research offers in your area and find the best one.

Keep in mind there are 2 parts to consider in any lease offer:
#1 - the signing bonus
#2 - (and most important) the royalty
contract.
Questions you should ask before signing a gas lease are:
What is the signing bonus?
How is the acreage calculated? (to the center of the street included?)
What is the Royalty percentage?
Will expenses be deducted from your royalties?
What is the term of the lease?
Is there an option clause, once the initial lease term has ended?
What is the size of the "pool area?"
Do the "pool areas" overlap?
Is there a "shut in" clause? (more than $1.00/acre each 90 days)
Is the gas company responsible for costs relating to "subordination" from your mortgage company?
Is the gas company fully responsible for costs to repair damage to roads?
Is the gas company fully responsible for costs related to damages in the event of a diaster or catastrophic failure of the rig?

Consult your lawyer or someone knowledgable about what the pitfalls are of gas lease contracts before you sign ANYTHING. The terminology and "legal-eze" is VERY CONFUSING!

Good luck!

[Marc]

I am confused on something?
What if someone does not sign any lease - Does that hold up the drilling?
If not, and the gas company hits gas - How do I know they are not "Sucking" out from under my house - especially if I do NOT sign with them? Just curious how this whole thing works.
Or, does the gas company have to secure only a certain number of leases and the city can take the rest over using "Intemate Domain"?
Also, does the lease give the right to the gas company to put a pipeline on our property if once they hit gas and need a pipeline to deliver the gas to their gas facility? What protects us from the gas company placeing ANYTHING on our property?
Thank you for your time.
Marc

What if no well is drilled? Which is the better deal then? Just something else to think about....

[hope_I_own_mineral_rights]

Too much time on my hands..... RE :1st ,2nd and 4th comments
Sam Bowman , Sally Bradick , Dan Armaga
Are you all sure you own property in Tarrant County ? http://www.tad.org/Datasearch/re_owner_search.cfm?matches .If you do may i suggest you call the Tarrant Appraisal District and ask them why they do not have a record of you owning property. Bummer.

[Mike Mullen]

Best up front offer is not always the best. Bear in Mind the royalties also. Transportation etc..Are they going to pay with a check or voucher? A voucher is noting more than a promissary note which does not have to be honored until actual production of gas. The Greedy need to watch out for all the hiden unknowns as you were not there in the negotiation process. Also sounds as though all the companies had the same opportunity to put up or shut up. NOw that someone has given a very reasonable offer and it was accepted by the group, now the "Criminals" come forward in order to derail the process. Watch out as the greed will come back and bite those of you who plan to hold out for the bigger up front dollars.

[SEAPO Homeowner]

Do the math:
20% royalties over 20-30 years with expenses taken out - You have no way to monitor the expenses or control them.
OR
25% royalties over 20-30 years with NO EXPENSES taken out. The gas company pays all expenses.

You'll make far more money over the length of the lease than you'll get from the small difference you'll get by signing a higher bonus with a lesser back-end contract now.

Keep in mind that very few homeowners in the SEAPO area live on an acre of land. Most of us have 1/4 to 1/5 of an acre sized lots.

Something to think about....

[SEAPO Homeowner]

Read the fine print of the contract or have your lawyer review it before signing anything and be wary of what the landmen tell you at the door. They'll SAY ANYTHING to get you to sign...even if it's not true.

Concerned SEAPO Resident

[Jan C.]

I am VERY UPSET by the comments made in regards to the SEAPO negotiating committee motives! Those making those accusations are misinformed and don't have a clue what they're talking about.

Let me make this PERFECTLY CLEAR:
The SEAPO committee members are getting EXACTLY the same deal as all other SEAPO members. They were NO pay-offs, bonuses or kick-backs of any kind given by the gas company...not even so much as a free cup of coffee or lunch.

There are rumors floating around about ANOTHER GROUP receiving offers of $25,000/acre from one of Paloma's competitors. Rumor has it that the $25K offer is only offering a 20% royalty contract (SEAPO's is 25% for 20-30 years) and we do not know the details of the royalty contract. If someone comes to you with this offer, be very careful of what they are offering.

The SEAPO deal with a $22,000/acre signing bonus and 25% NO COST royalites was the BEST & HIGHEST OFFER received by the SEAPO committee at the time the sealed bids were opened from the 3 participating gas companies. There were NO OFFERS higher and certainly no $25,000/acre presented to the committee.

The company now suppossedly offering $25K/acre started promoting that offer to ANOTHER GROUP the DAY AFTER the SEAPO committee accepted Paloma's offer. Carrizo was given the opportunity to increase their bid with SEAPO and they DECLINED.

Apparently, the gas companies try to out-do each other and top each other's bids, in efforts to divide neighborhoods and "steal" leases away from their competitors. It's the nature of their business.

Anyone in the SEAPO area is certainly free to try and get a better deal and they are not obligated to accept the SEAPO endorsed offer. But, I would caution you to READ THE ROYALTY CONTRACT VERY CLOSELY.

The SEAPO contract stipulates that the gas company is responsible for ALL COSTS of bringing the gas to market and there are safeguards built into the contract to protect property owners from future costs and expenses.

As for those residents that would like to organize their own group to try to get a better deal...go for it and GOOD LUCK! But be ready for what you're getting yourself into:
....Lots of expenses for printing, postage, signs, ink cartridges, website development, etc - all paid out of your own pocket unless you can find someone to donate them.
....A telephone that rings non-stop 18 hours a day - 6 am - 12 midnight.
....A fax machine that is printing constantly - 6am - midnight.
....Volunteers and strangers sitting in and parading through your home at all hours of the day and night.
....An overflowing email box full of questions that need to be answered.
....Missed meals and social events.
....Lack of sleep.

The bottom line is this: If SEAPO never existed we'd all be looking at signing bonuses of $5,000/acre with a crappy royalty contract. There would never have been any offers of $22K/acre...much less $25K/acre. Our strength in negotiating was due to the efforts of lots of dedicated, unpaid volunteers, the solidarity and support of our community, and having a solid organization to get the word out to our neighbors.

The only motivation for SEAPO's formation was to better our community and assure that EVERYONE in our area got a fair deal and a GREAT CONTRACT. The reason SEAPO formed is because NOBODY ELSE WANTED THE JOB or bothered to take the initiative to do it.

So, good luck to any others that would like to form a group of their own. You're in for a wild ride!

Letters are going out to ALL SEAPO RESIDENTS on 3/17/08 with details about the contract and the signing meetings. SEAPO signing meetings start March 20 - April 10. Details are on the website at www.SEAPO.org.

Jan C.

[options]

Paloma has come over the top with this offer to SEAPO. Historically, this is the best deal that has ever been given for a non-developmental lease. For those of you that live in the northern portion of the SEAPO area you are in no way shape or form obligated to sign with Paloma. Northern SEAPOs have the option of going with Paloma or Carrizo. Please keep in mind though that the cost free lease Paloma is offering will make you the most money regardless of the Carizzo signing bonus. For those of you that live in the southern portion of the SEAPO area, beginning at Mayfield and moving south to I-20, your options are limited. Carrizo's proposed drill-sites are too far north to develop minerals in the southern portion of the SEAPO area. The horizontal drill simply can't reach that far. Additionally Paloma has created a lease hold in the southern area that by law can't be penetrated. For those of you wanting to hold out for more money...don't hold your breath. It's unlikely that Paloma is going to step on the toes of the overwhelming majority that will sign through SEAPO's deal. You are more likely to get a working agreement proposal than an increased bonus price...just my opinion though.

[Jim Colley]

Well it appears that I should say something. My name is Jim Colley and I'm the one quoted in the Star Telegram story above.

SEAPO began as a small group of about 200 homes in the Hillside Subdivision about 3 weeks ago with 2 of my neighbors and it grew to include more than 7600 homes in practically no time at all because there was so much interest and concern about this issue. We merged with 2 other groups that were also working in their neighborhood because we felt that we could negotiate better as a large group than a smaller one.

I live in a tract home in the Hillside Subdivision on about one fifth of an acre. SEAPO "headquarters" is 2 folding tables in my living room in front of my TV with a couple of laptops to do data entry and answer email. My residential phone number has been published on our literature and yard signs. I have call-waiting with a fax sharing the voice line. Even as I write this, the phone never stops. That's the same story that can be told for the others in SEAPO who have their phone numbers also published.

But enough about me. The success of SEAPO is directly due to the many wonderful volunteers who have tirelessly knocked on doors and walked the pavement to get face time with folks who didn't know about their options and who were excited to know they could benefit in some way.

We had translations in a couple of different languages so people wouldn't fall prey to the bad deals that were circulating through the neighborhood.

SEAPO is an all-volunteer neighborhood group lead by concerned citizens most of whom had no idea what a gas lease was until 3 weeks ago.

No one in SEAPO is benefitting in any way other than getting the same deal everyone else is getting for leasing their mineral rights. It is ludicrous to think otherwise and those who do are woefully misinformed.

Our $22,000 signing bonus deal with Paloma/Chesapeake was accepted by our 10 member negotiating committee and was the biggest and best deal of it's kind on that day.

We heard a rumor the next day that Carrizo was offering $25,000 in another neighborhood not connected with SEAPO. I have yet to see any confirmation of that offer other than gossip. Carrizo NEVER offered that amount to SEAPO but had they done so, we certainly would have entertained their bid.

So let me be clear - the offer from Paloma of $22,000 was the highest and we took it. We are NOT pocketing any difference because there isn't anything to pocket. We get the same deal everyone else gets and our neighborhood benefits and comes closer together as a result.

No one on this post has identified their neighborhoods but wherever you are, feel free to try do a better job. Just be prepared for the huge amount of work it entails.

Good luck. And for everyone in SEAPO - congratulations! You've got a great deal.

what is a no subordination clause? Does the bank that holds your note waive their rights to your royalties?

[Jan C.]

PS: Carizzo had an opportunity to increase their deal to SEAPO and were asked to do so, but they declined and would not change their bid.

Jan C.

[Jan C.]

The comments expressed by some of your readers upsets me greatly!

LET ME MAKE THIS PERFECTLY CLEAR:
The SEAPO committee is NOT MAKING A PENNY off of this deal. The committee members are getting EXACTLY the same deal as every other member of the SEAPO group. There are NO kick-backs, overrides, or bonuses paid to any of the committee members...not even so much as a free cup of coffee or lunch from the gas companies.

There were no $25,000/acre offers on the table at the time the committee accepted the Paloma/Chesapeake contract. The committee accepted the BEST offer with the best royalty contract that was received in the sealed bids from 3 different gas companies.

It is an unverified rumor that a competitor of Paloma's came out with a higher bonus offer to another group - not SEAPO - the NEXT DAY - AFTER SEAPO agreed to the $22,000 offer. It seems the gas companies like to out-do each other and try to split the community and weaken a group's strength in efforts to take away leases from their competitors.

Those wishing to accept the higher bonus money offer are certainly free to do so. But THEY HAD BETTER READ THE ROYALTY CONTRACT VERY CAREFULLY. Another reader below states that the royalty money on the other offer is only 20% -not 25% - and we don't know the details about the contract.

The contract that SEAPO has endorsed has provisions for the gas company to pay ALL COSTS for drilling and bringing the gas to market, so the 25% royalty payment will truly be 25% (less taxes, of course.) There are also clauses that protect the property owners in other ways in the future in the SEAPO contract.

If other residents want to form their own group, they can certainly do so. They had just better be ready for what they're letting themselves in for:
A lot of expenses - printing, postage, signs, ink cartridges, paper, etc.
A telephone that rings constantly 18 hrs. a day.
A fax machine that rings constantly from the huge influx of faxes.
Strangers/volunteers in and out of your house at all hours of the day and night.
Email boxes that are overflowing every day with questions that need replies.
Losing sleep and missing meals.

The goal of the SEAPO committee was to improve our community and get a better deal for ALL of our neighbors. Prior to SEAPO forming, the standard lease offer was $5,000-$6,000/acre with a horrible royalty contract. Unfortunately, many of our neighbors that signed right away got stuck with that deal.

Without SEAPO there would never have been a $22,000/acre offer, much less a $25,000 offer. The only reason we got that GREAT CONTRACT is because of the strength of our numbers, having a strong organization, and the support of the community. The SEAPO committee formed because nobody else did.

So to all those that want to start their own group, go for it if you think you can get a better deal...GOOD LUCK!

Jan

[hope_I_own_mineral_rights]

I do not live in this area but.... the people that are offering $25,000 now had a chance to offer that with a sealed bid just like Paloma...Sally , Mary Beth and Dan : if you get any money for an acra (Acra : (fortress), built in Jerusalem in 168BC ) you are doing good. let someone that knows what an acre is handle this for you.and thank them....