Information for unleased mineral owners in Crestwood from the Mineral Leasing Committee
August 14
As things stand at the moment, here are our options:
- Sign the standard lease form offered by one of the leasing companies (Lessee). You will
receive the base offer of $3,000 per acre and 25% royalty. However, you are granting the Lessee
the power to pool up to 704 acres into a gas unit, which greatly dilutes your revenue. There are
other terms and provisions besides pooling on their form that need to be added/amended,
including post-production costs, title warranty, recourse against Lessor, Mother Hubbard clause,
depth limitation, shut-in limitation, Lessor indemnity, implied covenants of Lessee, etc.
- Hire an oil and gas attorney to represent you in negotiating a lease. You will more than
likely receive better terms than those previously offered, but your up front attorney fees could be
substantial.
- Join a group of Crestwood mineral owners to work with an oil and gas attorney in an
arrangement like the one currently being negotiated by the Crestwood Mineral Leasing
Committee. This arrangement costs you nothing “out of pocket.” By bargaining as a collective
body, we will likely get superior terms, provisions and conditions (i.e., pooling limited to 80 acre
proration units within Crestwood Addition) than those previously offered by Lessees. The
attorney’s fee will be paid from a sharing arrangement of 25% to the attorney and 75% to the
mineral owner of all additional bonus money above the $3,000 per acre and all additional royalty
above the 25% presently being offered.
- Participate your mineral interest in the well as a working interest owner and be subject to all
costs, risks, liabilities, and benefits associated therewith. This would be negotiated between you
and the Lessee, who will try to avoid this type of arrangement if at all possible. If not agreed to
by the Lessee, this option could leave you out of the gas unit altogether.
- Do nothing, sign nothing, and get nothing.
Questions? Call Tom Roberts at 817-625-4475.
Agreement with attorneyMay 26
Attorney Phil Bishop has agreed to represent Crestwood mineral owners in gas lease
negotiations. When the representation agreement is finalized, it will be distributed to
each mineral owner for independent review and approval.
Hiring an attorneyMay 2
The Crestwood Mineral Lease Committee is working with an oil and gas
attorney to negotiate a mineral lease with a drilling company that is
favorable for Crestwood residents. As discussed at the last meeting,
the plan is to hire the attorney on a contingency fee basis so that
neither residents nor the Association will have to pay attorney's fees
out-of-pocket.
The Committee and the attorney have agreed on some basic bargaining
terms and are in the process of working out the details of the agreements
with the attorney. Once an acceptable lease form is tendered, each mineral
owner will have the opportunity to accept or reject the lease.
The Committee will continue to keep residents posted on the progress
of negotiations at the monthly meetings and in the newsletters. Please
be patient - this is a time-consuming process, but your patience will
pay off in the end.
Negotiating tipsMarch
Jackie Lyles, Bob Hayes and Tom Roberts attended a meeting of the Fort Worth League of Neighbors called Tips for Neighborhoods Negotiating Gas Leases. Here is what they recommended.
- Be patient. First contact to final lease execution normally takes six months to a year.
- Negotiate as a group.
- Use a committee of knowledgable members.
- Use an attorney.
- Communicate to your group often.
- Use the process as a team-building project.
- Be patient. (They really stressed this point.)
Based on the insight gained at this meeting, the committee is making the following recommendations.
- Hire an oil and gas attorney to represent members of the association.
- Don't sign the community lease form being circulated by Four Sevens. It is one attorney's opinion that this is a very peculiar lease form and that it could lead to headaches down the road.
- The committee will seek the advice of our attorney on how to use the Rockwood lease as leverage.