Any other home owners getting solicited by Cherokee Horn?

[Mustangman_2000]

In the last couple of weeks my entire neighborhood has been solicited by Cherokee Horn. They are trying to get us all to sign a multi-page lease agreement to lease our mineral rights as they are going to be conducting horizontal/vertical drilling in our area. They are offering us sign on bonuses, gas cards, and royalties.

Some people in our neighborhood have already set up a ad-hoc group to hold future meetings to discuss this issue. It is estimated that the value of mineral rights in my area is approx. $30,000 per acre, which equates to a potential signing bonus of $4,000 - $6,000 per household. The drilling is reportedly also to be unobtrusive as you will see no equipment or even be aware of the drilling after you sign your consent paperwork.

It sounds all too good to be true. Therefore, I am going to have an attorney look at the lease agreement to determine if this is legit deal. A few people in my neighborhood have already consulted an attorney for the same reasons.

Anybody else in the same situation? They have been aggressively soliciting this whole area for the last month or so. Something comes in the mail every week and I think they have people on foot going door to door as well.

Any advice or suggestions?

[Sgt Beavis]

I was listening to Ed Wallace a couple of weeks ago. He said his neighbors were holding out for $50K per acre.

[JP135]

If one person holds out, they claim they'll avoid that person's property with their drilling and just go around. End result, that one person gets left out and everybody else gets paid.

If the entire group bands together, you can demand more money and they can't ignore you.

There is strength in numbers.

[bcoop]

In the last couple of weeks my entire neighborhood has been solicited by Cherokee Horn. They are trying to get us all to sign a multi-page lease agreement to lease our mineral rights as they are going to be conducting horizontal/vertical drilling in our area. They are offering us sign on bonuses, gas cards, and royalties.

Some people in our neighborhood have already set up a ad-hoc group to hold future meetings to discuss this issue. It is estimated that the value of mineral rights in my area is approx. $30,000 per acre, which equates to a potential signing bonus of $4,000 - $6,000 per household. The drilling is reportedly also to be unobtrusive as you will see no equipment or even be aware of the drilling after you sign your consent paperwork.

It sounds all too good to be true and therefore I am going to have an attorney look at the lease agreement to determine if this is legit deal. A few people in my neighborhood have already consulted an attorney for the same reasons.

Anybody else in the same situation? They have been aggressively soliciting this whole area for the last month or so. Something comes in the mail every week and I think they have people on foot going door to door as well.

Any advice or suggestions?


Yep. Form a group, and hold out. There are a shitload of people in the Ft Worth area that wish like hell they'd held out.

[STRONGNUFF]

Definitely form a group, our entire area did, over 3,000 home owners and we just signed paperwork 2 weeks ago.. Power in numbers !

[Mustangman_2000]

Thanks for the input.

My neighborhood has already started to bond together on this issue. I got a letter tonight and folks have already set up a community gmail account and are setting up a meeting for our entire sub-division.

This will be interesting.

[ceyko]

Curious about something.

Is oil like a swimming pool that is below ground? Meaning, lets say I had a 600 acre below swimming pool with houses on top. I wanted to empty that pool, I'd only need 1 person's permission since I'd get a large amount of water just be pulling it out via that 1 place I have permission.

Also, aren't they getting very good at horizontal drilling? What's to stop them from just doing what they want if they don't get their way?

[Nate]

From overhearing my girls dad (oil/gas landman) basically if they have anyone within a few hundred feet of you (or most) etc they will get your gas if you don't sign. I don't know how true this is or isn't so take that for what it's worth.

[Grimpala]

I drink your milkshake!!

[George G.]

Our neighborhood just made a deal....they were initially offering like $4,000 per mineral acre and a signing bonus of $500.00. Our neighborhood was able to form together and finally worked a deal for $26K per acre. I think most neighborhoods are catching on that there are better offers out there. You just gotta get the word out before Horn's landsharks beat you to them.

From what I hear, if one person doesn't sign, they can't drill within 300 feet of that home, even if the neighbor signed.

Also, Cherokee Horn is not a driller, just a middle man. If you can band together, cut the middle man out and deal directly with the driller, you'll better your chances of a better deal.

[STRONGNUFF]

I "think" there is an 80% rule. If 80% of your neighbor's sign up and you dont, they (gas company) have right of way under your property to get to your neighbor's etc. This is one of those times not to be stubborn and try to hold out for millions, take your $27,000 plus 25.5% royalties and take a trip.

<----About to take a trip :D

[Mustangman_2000]

It says in the lease agreement that they cannot drill underneath your property if you don't sign.

Whether that actually deters them is another story.

My neighborhood is looking at right around $30K per acre. We have 44 people thus far in a group that are going to band together to get the best deal before we sign.

[Cooter]

I drink your milkshake!!

http://i75.photobucket.com/albums/i312/fnearing/jackmove.jpg

[J&T's 82]

I drink your milkshake!!

I was thinking the same thing reading this tread......That movie was strange

[Strychnine]

Curious about something.

Is oil like a swimming pool that is below ground? Meaning, lets say I had a 600 acre below swimming pool with houses on top. I wanted to empty that pool, I'd only need 1 person's permission since I'd get a large amount of water just be pulling it out via that 1 place I have permission.

Also, aren't they getting very good at horizontal drilling? What's to stop them from just doing what they want if they don't get their way?


The gas is stored in very small pores in the rock formation, not in a large "pool" or "cavern" or anything like that. When a well is drilled they will go down to their desired depth, sometimes using directional technology to pass through multiple zones with the same bore. Then they will "fracture" the formation, or form cracks in the formation with the use of high pressure water. These fractures will be held open with a proppant (usually sand that is more permeable than the surrounding rock) which creates an avenue for the gas to flow more freely back to the well bore.



http://www.delawareonline.com/blogs/uploaded_images/ddl-777152.jpg

[Mustangman_2000]

The gas is stored in very small pores in the rock formation, not in a large "pool" or "cavern" or anything like that. When a well is drilled they will go down to their desired depth, sometimes using directional technology to pass through multiple zones with the same bore. Then they will "fracture" the formation, or form cracks in the formation with the use of high pressure water. These fractures will be held open with a proppant (usually sand that is more permeable than the surrounding rock) which creates an avenue for the gas to flow more freely back to the well bore.



Very good explanation.

The only major concern our group has is they say it is our responsibility to clean up any contaminated ground water. And that it can affect property values, which I really don't think will be affected by this. They also use a lot of hazardous chemicals during the water fracturing process. The Safe Drinking Water Act legislation does not cover underground drilling such as this. The Bush Administration made an exemption for it. Most people don't realize that. The drilling companies can use a range of carcinogenic chemicals from benzine, toluene, ethylene glycol, etc..Not all of the contaminated water created by fracturing can be recovered. There is a risk of heavily contaminating the water table and it is the home owners burden to deal with those issues as well as any "equivocal" damage done to your property or foundation.

There is a lot more to this than I realized before I went to one of these meetings. I don't have a problem with it as long as it is unnoticeable like they claim. However, a lot of people in my group want to bargain for environmental and nuisance abatements in the contract.

[J&T's 82]

Very good explanation.

The only major concern our group has is they say it is our responsibility to clean up any contaminated ground water. And that it can affect property values, which I really don't think will be affected by this. They also use a lot of hazardous chemicals during the water fracturing process. The Safe Drinking Water Act legislation does not cover underground drilling such as this. The Bush Administration made an exemption for it. Most people don't realize that. The drilling companies can use a range of carcinogenic chemicals from benzine, toluene, ethylene glycol, etc..Not all of the contaminated water created by fracturing can be recovered. There is a risk of heavily contaminating the water table and it is the home owners burden to deal with those issues as well as any "equivocal" damage done to your property or foundation.

There is a lot more to this than I realized before I went to one of these meetings. I don't have a problem with it as long as it is unnoticeable like they claim. However, a lot of people in my group want to bargain for environmental and nuisance abatements in the contract.

With the possibility of contaminated ground water and foundatation issues, I don't think I would want them to drill under my house. Down here in Houston, all of our water is ground water.

[8mpg]

Very good explanation.

The only major concern our group has is they say it is our responsibility to clean up any contaminated ground water. And that it can affect property values, which I really don't think will be affected by this. They also use a lot of hazardous chemicals during the water fracturing process. The Safe Drinking Water Act legislation does not cover underground drilling such as this. The Bush Administration made an exemption for it. Most people don't realize that. The drilling companies can use a range of carcinogenic chemicals from benzine, toluene, ethylene glycol, etc..Not all of the contaminated water created by fracturing can be recovered. There is a risk of heavily contaminating the water table and it is the home owners burden to deal with those issues as well as any "equivocal" damage done to your property or foundation.

There is a lot more to this than I realized before I went to one of these meetings. I don't have a problem with it as long as it is unnoticeable like they claim. However, a lot of people in my group want to bargain for environmental and nuisance abatements in the contract.

You guys need to get your group going on a LARGE scale. Not your neighborhood. Your neighborhood needs to band with other neighborhoods. our group was something like 2400 acres of land. All the negotiations were done through a gas lawyer that was hired on the behalf of the group. His payments will be negotiated into the overall lease agreements and you (and the rest of the group) will not be out a dime. Drilling is SAFE, but there are precautions that you add into the lease to make sure the company drills by the rules. Noise is a big factor when it comes to drilling. I can get the contact info from our group lawyer if you want it. He has done quite a few negotiations and written the leases for these signings.

Here is a link to our group website and our lease: http://www.camra76034.zoomshare.com/11.html

A link to a comparison between what companies were offering:
http://www.camra76034.zoomshare.com/12.html

The money up front (while can it can be VERY nice) is not always the most important. Dont rush this negotiation and dont rush the signing. Our group lease took a good 4 months to negotiate and get the best overall package deal for our members. Someone in your group needs to start contacting everyone in the path of their proposed drill radius and band together.


And as far as the comments above, I have never heard of a $50k/acre deal. Star Telegram has a blog of all the local groups and bonus amounts. As far as I can remember, the highest has been $30k per acre and it was West Fort Worth. Some Arlington/Mansfield people did well at $28,500/acre. I did read somewhere that the person hosting the drill site could get $50k/acre (5 acre minimum dictated by the Railroad Commission).

Like said above, power in numbers. There is a plethora of information out there...you guys are getting in late in the game, so let the other people's hard work benefit you. Dont get greedy and expect $30k/ acre because it may not happen. Also, as a tip...go and get your lot drawing (plat map I believe) from downtown so when you do sign...they cannot argue your lot is smaller.

My parents received a first offer from Chesapeak saying they had 3.464 acres...but when they signed with the winner of the group, they calculated 3.2 acres. If you dont have good proof (not a hand drawing you made), you get their amount. That was $5k difference.

[STRONGNUFF]

You guys need to get your group going on a LARGE scale. Not your neighborhood. Your neighborhood needs to band with other neighborhoods. our group was something like 2400 acres of land. All the negotiations were done through a gas lawyer that was hired on the behalf of the group. His payments will be negotiated into the overall lease agreements and you (and the rest of the group) will not be out a dime. Drilling is SAFE, but there are precautions that you add into the lease to make sure the company drills by the rules. Noise is a big factor when it comes to drilling. I can get the contact info from our group lawyer if you want it. He has done quite a few negotiations and written the leases for these signings.

Here is a link to our group website and our lease: http://www.camra76034.zoomshare.com/11.html

A link to a comparison between what companies were offering:
http://www.camra76034.zoomshare.com/12.html

The money up front (while can it can be VERY nice) is not always the most important. Dont rush this negotiation and dont rush the signing. Our group lease took a good 4 months to negotiate and get the best overall package deal for our members. Someone in your group needs to start contacting everyone in the path of their proposed drill radius and band together.


And as far as the comments above, I have never heard of a $50k/acre deal. Star Telegram has a blog of all the local groups and bonus amounts. As far as I can remember, the highest has been $30k per acre and it was West Fort Worth. Some Arlington/Mansfield people did well at $28,500/acre. I did read somewhere that the person hosting the drill site could get $50k/acre (5 acre minimum dictated by the Railroad Commission).

Like said above, power in numbers. There is a plethora of information out there...you guys are getting in late in the game, so let the other people's hard work benefit you. Dont get greedy and expect $30k/ acre because it may not happen. Also, as a tip...go and get your lot drawing (plat map I believe) from downtown so when you do sign...they cannot argue your lot is smaller.

My parents received a first offer from Chesapeak saying they had 3.464 acres...but when they signed with the winner of the group, they calculated 3.2 acres. If you dont have good proof (not a hand drawing you made), you get their amount. That was $5k difference.


We must be neighbor's ! We just signed our paperwork 2 weeks ago thanks to CAMRA 76034

[8mpg]

We must be neighbor's ! We just signed our paperwork 2 weeks ago thanks to CAMRA 76034

Oh yeah...right around the corner. We live off Peytonville/Continental in Southlake :D I was guessing you were part of CAMRA

[STRONGNUFF]

Yup, Corner of Hall Johnson and Pool. CAMRA did a great job and ALWAYS kept us informed via e-mail. Our lot is .53 acre and they gave us .79 acre because they also went to the middle of the street for each home owner.

[89gt-stanger]

You guys need to get your group going on a LARGE scale. Not your neighborhood. Your neighborhood needs to band with other neighborhoods. our group was something like 2400 acres of land. All the negotiations were done through a gas lawyer that was hired on the behalf of the group. His payments will be negotiated into the overall lease agreements and you (and the rest of the group) will not be out a dime. Drilling is SAFE, but there are precautions that you add into the lease to make sure the company drills by the rules. Noise is a big factor when it comes to drilling. I can get the contact info from our group lawyer if you want it. He has done quite a few negotiations and written the leases for these signings.

Here is a link to our group website and our lease: http://www.camra76034.zoomshare.com/11.html

A link to a comparison between what companies were offering:
http://www.camra76034.zoomshare.com/12.html

The money up front (while can it can be VERY nice) is not always the most important. Dont rush this negotiation and dont rush the signing. Our group lease took a good 4 months to negotiate and get the best overall package deal for our members. Someone in your group needs to start contacting everyone in the path of their proposed drill radius and band together.


And as far as the comments above, I have never heard of a $50k/acre deal. Star Telegram has a blog of all the local groups and bonus amounts. As far as I can remember, the highest has been $30k per acre and it was West Fort Worth. Some Arlington/Mansfield people did well at $28,500/acre. I did read somewhere that the person hosting the drill site could get $50k/acre (5 acre minimum dictated by the Railroad Commission).

Like said above, power in numbers. There is a plethora of information out there...you guys are getting in late in the game, so let the other people's hard work benefit you. Dont get greedy and expect $30k/ acre because it may not happen. Also, as a tip...go and get your lot drawing (plat map I believe) from downtown so when you do sign...they cannot argue your lot is smaller.

My parents received a first offer from Chesapeak saying they had 3.464 acres...but when they signed with the winner of the group, they calculated 3.2 acres. If you dont have good proof (not a hand drawing you made), you get their amount. That was $5k difference.

Great points! Band together in numbers. i.e. an HOA meeting. In Keller, we have ours at the police station/courthouse.

Our neighborhood has negotiated $28,800/acre. I am sitting on .47 acre. :D And, 31% royalty.



My ? is, what exactly is your "royalty"? How do they calculate that?

[8mpg]

Yup, Corner of Hall Johnson and Pool. CAMRA did a great job and ALWAYS kept us informed via e-mail. Our lot is .53 acre and they gave us .79 acre because they also went to the middle of the street for each home owner.

Lucky...My parents did cash in at $80k but they got shorted on the calculation compared to Chesapeak.

Great points! Band together in numbers. i.e. an HOA meeting. In Keller, we have ours at the police station/courthouse.

Our neighborhood has negotiated $28,800/acre. I am sitting on .47 acre. :D And, 31% royalty.


My ? is, what exactly is your "royalty"? How do they calculate that?

Your numbers sound off... $28,800 is possible but that would be the highest in our area. Lots of Southlake people signed for $20-24k. Our group lucked otu at $26k/acre.

And Im highly doubting you are getting 31% royalty. I have not read of a contract going over 25.5%. They usually start at 20% and negotiate from there. All 3 companies bidding on our area mineral rights would not go over 25.5%. Royalties are figured by the amount of gas that is pumped out divided by the acreage in that 'section' of drilling, then multiplied by the amount of acreage you have. So if you are on a 200 acre section and you have .5 acre lot, you will get 1/400th of the 25.5% of the sale of the gas. You need to look more because that company isnt going to offer 30%+

[Mustangman_2000]

You guys need to get your group going on a LARGE scale. Not your neighborhood. Your neighborhood needs to band with other neighborhoods. our group was something like 2400 acres of land. All the negotiations were done through a gas lawyer that was hired on the behalf of the group. His payments will be negotiated into the overall lease agreements and you (and the rest of the group) will not be out a dime. Drilling is SAFE, but there are precautions that you add into the lease to make sure the company drills by the rules. Noise is a big factor when it comes to drilling. I can get the contact info from our group lawyer if you want it. He has done quite a few negotiations and written the leases for these signings.

Here is a link to our group website and our lease: http://www.camra76034.zoomshare.com/11.html

A link to a comparison between what companies were offering:
http://www.camra76034.zoomshare.com/12.html



Excellent info! I appreciate it.

We have 54 people in our group thus far. We've created a yahoo group for us and some are passing out fliers. We had our first meetng this week. We've all agreed that making a capricious decision to rush to sign would not be in our best interests. We are trying to spread the word. The info I have is we are about 18 months from proposed drilling. The rig itself will be about a mile from my house from what I understand. All the info is fluid at this point. There are about 80 streets in my area that have been approached by Cherokee Horn. That's a lot of people and a difficult task of contacting everyone. Some people will just sign and take the quick deal, especially since they are handing out gas cards.

I still haven't called my mortgage company. I already have a .pdf file of our Plat. I know exactly what my acreage is.

I am going to check out your info and see if there is anything I can glean from it.

[Strychnine]

Very good explanation.

The only major concern our group has is they say it is our responsibility to clean up any contaminated ground water. And that it can affect property values, which I really don't think will be affected by this. They also use a lot of hazardous chemicals during the water fracturing process. The Safe Drinking Water Act legislation does not cover underground drilling such as this. The Bush Administration made an exemption for it. Most people don't realize that. The drilling companies can use a range of carcinogenic chemicals from benzine, toluene, ethylene glycol, etc..Not all of the contaminated water created by fracturing can be recovered. There is a risk of heavily contaminating the water table and it is the home owners burden to deal with those issues as well as any "equivocal" damage done to your property or foundation.

There is a lot more to this than I realized before I went to one of these meetings. I don't have a problem with it as long as it is unnoticeable like they claim. However, a lot of people in my group want to bargain for environmental and nuisance abatements in the contract.

Right. Water isn't the only fluid used to frac a well. The chemicals used when acidizing, or "acid fracing", aren't exactly friendly (hydrochloric, hydrofluoric, acetic, and other acids).


And don't forget about the plain ol' water. Water is used to frac the wells and as this water comes back out it picks up natural salt deposits (and hydrocarbons, well treatment chemicals, and trace amounts of NORM). It then has to be properly stored on-sire until it can be transported (via water haulers) and injected back into the ground at another location. Some wells don't bring up much water and some bring up a bunch. A wellhead that I have a field test engine (gas lift compression unit) on out in Weatherford produces so much salt water that they have two tankers running back and forth all the time to/from it.

Wells can also produce naturally occuring salt water. The layer right under the Barnett Shale is called the Ellenburger formation and it contains a great deal of salt water. If , for some reason, a well goes too deep or the frac crew gets a little overzealous they will break into the Ellenburger...

[camarenar]

Make sure to have a qualified lawyer and group negotiate for you. We have a group in Double Oak that did all of ours based on our input. Basically they drill down something close to 2 miles in depth then bore acorss and for lack of a better term suck the gas out and up.

A lot of the information above is right, even if you do not sign they can still pull the gas from underneath your property and not pay you anything. What they have to do is gain all the contracts, then after that they can plot out how much acerage they are able to drill based on the number of cntracts signed and the geo area of those contracts, so you could still be in the path and come up with no payday if you hold out.

My area also negotiated the clean up afterwards, royalties form the well head prior to transportation cost, and we made sure to have their insurance reviewed. The drilling companies insurance should provide coverage for the are being drilled in case of land settleing issues that might affect your foundation.

[8mpg]

Excellent info! I appreciate it.

We have 54 people in our group thus far. We've created a yahoo group for us and some are passing out fliers. We had our first meetng this week. We've all agreed that making a capricious decision to rush to sign would not be in our best interests. We are trying to spread the word. The info I have is we are about 18 months from proposed drilling. The rig itself will be about a mile from my house from what I understand. All the info is fluid at this point. There are about 80 streets in my area that have been approached by Cherokee Horn. That's a lot of people and a difficult task of contacting everyone. Some people will just sign and take the quick deal, especially since they are handing out gas cards.

I still haven't called my mortgage company. I already have a .pdf file of our Plat. I know exactly what my acreage is.

I am going to check out your info and see if there is anything I can glean from it.

You will be surprised how contacting everyone will go better than you thought. Spending 1 day doing fliers will benefit you greatly. Just get an email list and do bulk emails with updates. You need to spread the word not to sign yet and take the quick money because it will mess it up for the group. It will take the company 18 months AFTER all negotiations, mineral rights research (which happens AFTER you sign), all the permits and what not.

[PooterWS6]

http://www.youtube.com/watch?v=URjeS5-NaXY

[2165 Turbo Rail]

I leased my mineral rights on my rental property in FTW.. the way I figure is... why not make some extra cash.. I got a sign on bonus plus you supposedly get royalty from it when they start drilling... its been over a year and they haven't even started drilling yet...

i looked online about this stuff too and from what i can tell they only have to have 80% of the people in the area.. so if you hold out too long as an individual you might be hurting yourself... if you have a big group (in comparison to the number of people in the area) then you might get a little more money :)

[Mustangman_2000]

Our group made it into our local newspaper. We even got a city councilmen to attend the last meeting.

We are making some headway.

http://www.courier-gazette.com/articles/2008/09/09/lewisville_leader/news/66.txt

[Mustangman_2000]

And Southwest Ft. Worth Alliance got $27.5K per acre. http://www.star-telegram.com/804/story/894164.html

[jewozzy]

how does one find the projected area's that will be coming up? i am down in desoto but was told that waxahachi and red oak have started getting offers might be headed my way soon.

[2165 Turbo Rail]

I want to know when people start getting royalty checks from this. I was told it would be a few years after I signed the lease.. its been about 2 now so they can go ahead and start sending me my money :D