I've got gas!!

[Nathans_Dad]

Wow, I feel like I won a little lottery.

We have been hearing for the last 6 months or so about Barnett Shale that lies underneath much of North Texas. Apparently this is supposed to be a big gas reservoir. Anyhow, we got a letter in the mail from a gas drilling company about 8 months ago offering us somewhere around $800 up front and then about 10% royalty on the gas. I guess they are planning to set up drill sites outside of our neighborhood and then horizontally drill underneath us to get the gas. Our HOA formed a committee and sent out regular updates on the gas issue. The first one said that they recommended that the owners not cash those checks until they did some research. We've been getting periodic updates since then but nothing earth shattering.

So about 3 days ago they send out an e-mail saying that they have reached an agreement with XTO corporation and the lease packets would be arriving to those homeowners who owned their mineral rights by Saturday. Well, Santa brought me a packet!! Somehow through dumb luck I was one of the people who has their mineral rights. I had no clue about mineral rights and if you were to have asked me to sign a piece of paper releasing them at closing I probably would have (along with the other 85 signatures....)

Anyhow, we are getting a check for just over $5k for a 3 year lease, XTO can extend for another 2 years after that but they have to pay us another $5k and we get 25% royalty on all gas produced (at least our small portion of the total field). XTO estimates we should be getting about $350 a month in royalty checks over the first year and it will slowly drop from there. They say the field should produce for 30 years and we can retain our mineral rights if we ever sell the property.

SCORE!!! This is one time where I love having gas...

[Racerbvd]

Good for you!!!!

[sketchers356]

Cool deal.

[biosurfer1]

tell them you double the royalties, I cant imagine how much of a pain in the ass it would be for them to drill around just your land...I think they'll give it to you

[mattdavis11]

That's great! XTO has a bad reputation, too bad no one else wants to drill there.

Barnett Shale natural gas drilling, it's like flies on horse ****!

[Nathans_Dad]

There were three companies, XTO, Chesapeake and one other.

XTO is apparently the major player in this area of Texas and made the best offer by far.

Being in Irving you should be sitting on some shale too, have gas companies approached you yet?

[rouxroux]

We're in the same boat as we're sitting right on top of the Haynesville shale area. Chesapeake and PetroHawk seem to be the major players here right now, 25% is doable, as many are getting that here. Hold out, don't sign.

[Joeaksa]

Rick,

I have been getting checks every month from an oil and gas well that my Father and I invested in way back in the 1970's. Best investment we ever made.

Stock it away and enjoy it!

Joe

[mattdavis11]

XTO is based in Fort Worth, so naturally they are a big player. Devon? and Chesapeake would have been better choices.

They'd have to drill on either Las Colinas Country Club's golf course, one of the two courses at Las Colinas Sports Club (Cottonwood or TPC), or the parking lot they use for the players/sponsors/equipment during the Byron Nelson for us to have a chance at capitalizing on our mineral rights. That is if there is any gas here.

If it was still John Carpenter's ranch that was just to the north of us, we might have some action. There's no place to drill.

[David]

Congrats!

I think about my grandfather everyday and the natural gas properties he left his children and grandchildren. Thanks grandpa!!!!!!!!!

[Nathans_Dad]

There will apparently be three drillsites in this area which can reach our neighborhood. Two of them are already leased and sited from private owners of land away from housing. The third one looks like it might be sited somewhere on land which belongs to the golf course that runs through the neighborhood. XTO agreed to site at least 1000 feet away from any house. My house is in the middle of a neighborhood so I am safe .

Chesapeake was the other serious bidder but their offer came in significantly lower than XTO so the HOA is endorsing XTOs deal. Of course each homeowner is not obligated to sign any deal, but I am gonna cash my check! From researching deals other HOAs have gotten in the area in the last year, ours is near the upper end as far as terms so I don't think it's gonna get too much better.

[mattdavis11]

20K per acre and 25% for 3 years isn't bad, but there is better. Ms. Gatzke was pretty quick to sign on. Six weeks? She sounds like a bad negotiator to me. You ought to talk with your neighbors about ousting her, and opening new negotiations.

[john70t]

Did they give 'ya a wool blanket and a bottle of whiskey? There might be a billion dollars under your house, and prices aren't going to drop.

[stomachmonkey]

Up in Argyle, Lantanna. The Rayzors kept the mineral rights. Smart people.

Good for you. Nice early xmas present.

[JMPRO]

My grandfather traded a tractor for the mineral rights under some land in Okaholma 70 years ago. Phillips contacted us in about 1960 or so for rights to explore the site. They found Natural gas and capped the well . We got one check for about $20.00 for the gas removed during the drilling and that was it. The well is considered a reserve and may never be opened. So much for my dreams of being an oil tycoon. I also had a great aunt that died and left her entire estate, some $3,000,000.00 {in 1935 dollars} to an Oklahoma college. They have a building named after her. "Miller Hall"

Jerry

Still working for living

[Nathans_Dad]

Originally Posted by mattdavis11

20K per acre and 25% for 3 years isn't bad, but there is better. Ms. Gatzke was pretty quick to sign on. Six weeks? She sounds like a bad negotiator to me. You ought to talk with your neighbors about ousting her, and opening new negotiations.

Six weeks? No, the negotiations took over 6 months.

Geez, you guys would think I was sitting on oil, Beverly Hillbillies style.

[john70t]

Rick, did the HOA release any findings regarding the geological data? It could be the HOA members are getting a private kickback to sell out the rights, your rights, on the cheap.
-What's the field worth?
-Is the pumping station going to be a noisy industrial blight on the landscape which sends property values into the drain?
-Also, can the outlying neighborhood sue later and stop production? That would mean you owing back the money. A little knowledge goes a long way....