HAUGHTON, LA (KSLA) - As KSLA News 12 has already reported, leasing has slowed down in the Haynesville Shale since the credit crunch came to a head and the bottom fell out on natural gas prices. But it hasn't stopped all together, and members of the East 80 Oil and Gas Leasing Coalition have noticed that things out their way actually seem to be picking up again.
That's why they're holding a series of meetings this week, the first of them Monday night at the Pease Chapel on Bellevue Road in Haughton. About 35 people showed up to hear the latest on efforts to negotiate a deal with any one of the companies that appear to be interested in leasing the area. But organizer Eric Clarke says the reports he gets from some of his 1,950 members vary widely, "Twin Cities has been out here in force, offering different amounts and different bonuses, different royalties, you know, between five houses. There was two ladies that contacted me in Espanita Forest. One of them was offered $1,000 an acre and 18% royalty and five houses down, she was offered $1,500 and 20% royalties and this is all the same day within a matter of five houses."
And some, Clarke says, have received notice that they may be forced-pooled. This happens when a majority of mineral owners in a unit (640 acres, or about one square mile) have agreed to lease their minerals. The operator can ask the Department of Natural Resources' Department of Conservation to "force pool" the remaining un-signed mineral owners so that the well can be drilled. Since they haven't signed a lease, force-pooled mineral owners do not receive a per-acre bonus and will get not get paid until the cost of the well has been recovered by the operator. For example, if you own 32 acres in a 640-acre unit, you would responsible for 5% of the well cost. These deep wells into the Haynesville Shale have typically cost anywhere from $5-8 million each to drill. After that, however, you would receive your full proportionate share of the revenues, ie., 100% royalty on your share of the unit. That could mean big returns - if the well is successful. The downside: if the well never breaks even, force-pooled mineral owners won't see a dime.
Eric Clarke says he's tried to establish a dialogue with Chesapeake Energy, "We're getting a brick wall, but yet Twin Cities is out here in full force." Twin Cities Development is contracted to conduct lease negotiations on Chesapeake's behalf. Clarke says Twin Cities refuses to negotiate with his group, saying they will only deal with individuals. All that adds up to frustration and suspicion for Clarke and his coalition. "Do I know exactly what the gas companies are doing? No, but these are the first letters I've actually seen refer anybody to - petitioning the commissioner for unitization that have actually referred you to a leasing company, and we know that Twin Cities is not having a whole lot of success with the members that are a strong heart in our coalition."
Since it was formed back in August, the group has grown to include more than 7,000 acres-worth of properties within the parts Haughton, Red Chute, Bellevue and Princeton area. The group's web site state's it's mission: "We Will Not Accept any Negotiated agreement for a Bonus less than $17,500.00 (minimum) nor any Royalty less than ¼ (minimum) at no cost royalties. This to also include MOST IMPORTANTLY several non-negotiable clauses to protect our community, people, property values, and children for many years to come, based on the projections of geologist with regards to the Haynesville Shale's projected production and current productions. It has always been and will continue to always be a TAKE EVERYONE OR TAKE NONE STAND, when it comes to coalition negotiation!!!"
It's a tough stance to take, at a time when per-acre bonuses are going for a fraction of their asking price. Still, Clarke says, "We're not asking for everything. We're simply asking for a good, fair protective deal and lease. And if Chesapeake wants to be the ones that want to come out to this area and force-pool this whole area, and they want to sit down with us that's fine. Otherwise, we'll be the competition and just stand where we're at, receive 100% of our mineral rights, minus their costs - and we're willing to stand together and do audits, to make sure that people are taken care of as a community."
The coalition continues to hold meetings and maintains a web site dedicated to their efforts and updates.