Barnett Shale

Mont Del lease: near-record bonus, HOA cash and a bench

Folks in Benbrook held out long enough and finally agreed to a deal with XTO Energy for a lease that will pay property owners a per-acre bonus of $22,500.

The Mont Del Estates Homeowners Association had been negotiating with both XTO Energy and Chesapeake Energy since the end of last year. Here's what we said about it at that time.

According to the signed lease offer dated today, here are more details of the lease:

• 25 percent royalty
• 3-year initial term with an option for another two years and another signing bonus then of $15,000 per acre
• Extra $12,500 will be paid by XTO to the homeowners assocation
• XTO will pay for a stone bench and will install it at the duck pond that is bound by Park and Mont Del. The bench is "subject to XTO's reasonable approval of the cost thereof."
• Property measured to the middle of the street
• XTO will located its drill site locations outside of an area bound by State Highway 183 on the north, Bryant Irvin Avenue on the east, Loop 820 on the south and the Trinity Rvier on the west.

XTO, which was represented by Carla Petroleum in the land lease, will hold a signing party within 30 days after it mails out offers to all homeowners within the group.

--David Wethe

Timbercreek (Benbrook) agrees to sign with Fleet

The Timbercreek Neighborhood Association in Benbrook has agreed it's time to put their name on the dotted line with Fleet Oil and Gas.

For a $7,000-per-acre bonus on a three-year initial term and a two-year option, the Timbercreek neighborhood is recommending that its members sign with Fleet, which will turn the leases over XTO Energy, the only company drilling in that area.

"We began this task believing we would be able to negotiate for the high dollars we were observing in other areas," Pat Dunkin wrote in an e-mail to Timbercreek homeowners. "However, those areas have more than one gas company wanting to drill in their neighborhoods, and we did not.  No competition, no large bonuses."

As a result, Dunkin is telling property owners to show up for a lease signing party at the Best Western hotel on Tues., April 22, and Thurs., April 24, from 5 p.m. to 8 p.m. and on Sat., April 26 from 10 a.m. to 1 p.m.

If you go, bring:

• Driver's license or valid picture ID
• Your spouse; both need to attend before you receive your check; if your spouse can't attend, he or she can come back at another date or schedule for a Fleet representative to come to your house

The bonus check will be handed out at the Best Western after you sign. But Dunkin points out that not all contracts may be available at the time of the signing. If not, hold tight, and Fleet representatives will dig it up soon, she said.

Trinity Gardens, which had teamed up with Timbercreek on negotiations, already signed their leases, Dunkin said. Trinity Estates, another neighborhood group working with Timbercreek, still has yet to sign, she said.

To see more about what we've reported on these three groups, click here.

--David Wethe

(Archive photos: Benbrook Lake)

N. Benbrook neighborhoods get $15,000 deal

Organizers of the North Benbrook Neighborhood Association saw something they didn't like when Paloma Resources agreed Jan. 9 to sell leases to Chesapeake Energy and go to work as an agent for the company: the loss of a competitor in the Barnett Shale neighborhood leasing game.

The next day, HTP and Associates, which had been offering to sign leases in North Benbrook for Paloma, contacted the neighborhood with a significantly improved offer: $15,000 per-acre signing bonus, 25 percent royalty, and a three-year term with a two-year option.

"It was all contingent upon us signing leases by the 18th of January," Morris Scales, one of the North Benbrook organizers, says. He quickly put out the word that "I thought this was a good deal," possibly "the best we were going to get."

Committee members bought in and the neighborhood rushed to get leases signed over the next eight days. It organized signing meetings at a Western Inn hotel in the city. Scales says the group even sent lease packets to property owners who were out of town or working abroad, as far away as Qatar, Brazil, California, and Arizona. In one case, they tried to reach a couple on a cruise vacation in Australia and New Zealand.

The lease agreement covered more than 800 homes in several neighborhoods. Two coalitions -- Scales' and a second, smaller one, led by the Brookhaven Estates neighborhood, which received lease offers earlier than the rest of North Benbrook and hired an attorney to represent them -- negotiated similiar contracts with HTP. Scales' group took on the same attorney as an adviser.

Among the terms, the 25 percent royalty is free of most costs. Scales, an aeronautical engineer, said the acreage calculations don't include measurements to the centers of streets for purposes of the signing bonuses, "but we get that in the royalties." The association also doesn't know for certain where the drill sites will be.

"It remains to be seen, to a certain extent, how this is going to develop," Scales said. But "if there's a drill site that's a high-impact site (meaning it falls within the city's permissible distance to structures such as homes), we reserve the right to talk to our City Council."

He also believes it's still possible that Chesapeake and XTO Energy, which had contacted the neighborhood to determine its interest in a negotiation, could end up trading leases, given that XTO already has a working well nearby off of Chapin Road.

Other tidbits:

• The North Benbrook association says it ended up representing more than 800 homes, HTP told the neighborhood that the company signed up 2,200 leases in the area, Scales said.
• North Benbrook had contacted the nearby Western Hills neighborhood to divine its interest in joining forces, but "they couldn't get organized," Scales said.
• The Brookhaven group collected $50 per household for the attorney and paid him $4,050, said Marvin Rudd, one of the Brookhaven organizers. The significantly larger portion of North Benbrook also collected $50 per househoid for legal costs, and will end up returning at least half that, Scales said.
• By organizing and remaining patient, the neighborhood significantly improved on early offers of $3,000 per-acre signing bonus, notes Rudd, a retired major subsystems buyer for General Dynamics and Rockwell and a one-time oil patch worker. Offers from competing companies hovered in the $5,000-$6,000-per-acre range and stayed there until HTP bumped them from $8,000 to $10,000, and then to $15,000, Scales said.
• With Paloma out of the bidding as an independent player, Scales said he wouldn't be surprised to see bonus offers begin to sink. "They're going to try to put the genie back in the bottle," he said.

-- Scott Nishimura

(Photos: Lake Benbrook)

Having a meeting on the Barnett Shale? Publicize it here, on our new Community Calendar !

Benbrook group sets guidelines for lease deal

Benbrook's Timbercreek/Trinity Gardens/Trinity Estates negotiating group is laying out guidelines for an "acceptable lease." Some of its components:

• Alternative access to the neighborhood to alleviate truck traffic. Colt Exploration/XTO Energy wants to use Rio Grande Street to get to the drill site near Trinity Gardens. The neighborhoods are opposed to that plan and instead want to explore using Army Corps of Engineers property south of Trinity Gardens for access.
• Requirement that the drilling company purchase its water from the city of Benbrook, which also would reduce truck traffic and probably be cheaper to the driller.
• Signing bonus of $15,000 per acre. Fleet Oil and Gas and Colt Exploration/XTO Energy are both offering $7,000 per acre, and the neighborhoods have had discussions with both companies.
• 25 percent royalty free of costs such as transportation
• 3-year lease term. The current offers are for five years.
• "Cash bonus" to each of the three homeowner associations, including $20,000 to Trinity Gardens for common area maintenance and improvements.

Click here to read our previous Benbrook posts.

Click here for contact info on Benbrook neighborhood associations.

-- Scott Nishimura

(Photo: Golf at Benbrook's Pecan Valley)

XTO offer: $25 for right to conduct seismic survey

XTO Energy is offering some residents of Benbrook and southwest Fort Worth $25 for the right to conduct a 3-D seismic survey of their property, to help the company tap Barnett Shale natural gas, Barry Shlachter, an S-T business reporter, writes. Click here for the full report, in Saturday's paper.

-- Scott Nishimura

Lease offers improve in Benbrook's Timbercreek

The gas committees for Benbrook's Timbercreek, Trinity Gardens, and Trinity Estates neighborhoods report their lease offer from Fleet Oil and Gas improved during a meeting last week with CEO Tim Fleet:

• Traffic. Vernon Castle and Rio Grande streets "stand to bear the burden" of access to Fleet's drill site, Timbercreek president Pat Dunkin told homeowners in an email. The committees are looking into whether they can gain "alternate access" across property to the south of Rio Grande. The Army Corps of Engineers owns that property. If that access isn't available, "Mr. Fleet indicated that there may be some additional compensation available to the residents of the affected streets," Dunkin said.
• Financial terms. Fleet offered to match XTO Energy's current offer to the neighborhoods of $7,000-per-acre signing bonus, 25 percent royalty, three-year contract, and two-year option, Dunkin said. That was up from Fleet's earlier offer of $6,000 per acre. XTO initially wanted a five-year term, and it boosted its offer to $7,000 from $5,000 in October. The neighborhoods still aren't happy with the bonus offer, given offers that property owners in neighborhoods near Timbercreek/Trinity Gardens/Trinity Estates are seeing, Dunkin said. Fleet indicated the company might be willing to share profits with the neighborhoods if it "strikes a better deal with XTO after securing our leases," Dunkin said.
• Drilling commitments. "If Fleet secures our leases, it will be their intent to press XTO for a drilling commitment" to accelerate drilling in the area and maximize revenue and profit, Dunkin said.
• Charitable donations. "Some consideration (by Fleet) may be given to donating a lump sum" to the three neighborhood associations, Dunkin said.
• XTO. Next up, the associations plan to meet with XTO "to see what they will do for us," Dunkin said.

Click here to read our previous posts on Benbrook area leasing.

Click here for contact info on Benbrook homeowner associations.

-- Scott Nishimura

(Photo: November gas lease meeting at Benbrook Senior Center)

N. Benbrook holds out, gets lease competition

Homeowners in North Benbrook began receiving lease offers six months ago from agents acting on behalf of Chesapeake Energy, but things are heating up.

Here's the update:

• Chesapeake -- through both Four Sevens and Colt Exploration --initially offered a signing bonus of $4,000 per acre and 25 percent royalty, but told homeowners at a recent meeting that they would bump that up to $5,000 an acre, said Morris Scales, an organizer in the North Benbrook Neighborhood Association. The royalty is 25 percent and the term five years. Chesapeake has sent offers to virtually all of the North Benbrook area, except parts of Westvale, which may be due to uncertainty over drill sites, the neighborhood says. Scales says the neighborhood believes Chesapeake may be preparing to increase the bonus again.
• HTP and Associates, which the neighborhood believes is signing leases in Benbrook on behalf of Paloma Resources, has sent lease offers broadly to North Benbrook, offering a $5,000 per-acre signing bonus, 25 percent royalty, three-year term, and two-year option, Scales said. HTP also has "indicated they plan to up that to $8,000," Scales said.
• Fleet Oil & Gas, which has been trying to sign leases in the Timbercreek/Trinity Gardens/Trinity Estates neighborhoods in Benbrook, has sent out offers to parts of Westvale, Scales and Gayle Hebert, president of the North Benbrook association, said. They did not know what the terms were. A Fleet landman, who Scales said is the son of a local Italian restaurant owner, sponsored a pizza party last Saturday to try and sign leases.
• North Benbrook has also been trying to interest XTO Energy, and an XTO representative contacted the neighborhood association on Friday to ask whether it would be interested in an $8,000-per-acre signing bonus that would cover the area, Scales and Hebert said. Hebert said the response from the association's attorney was "probably not," but the neighborhood doesn't think that chapter of the story ends there. "XTO has told us they are serious about coming into the area," Scales says.
• The association has been organizing since June, after Chesapeake quickly signed up large numbers of leases in Benbrook's Pecan Valley neighborhood. The association has broken the neighborhood up into teams representing Brookhaven (220 homes), North Benbrook Central (750 homes), and North Benbrook East (375 homes), and assigned two "street captains" per street to pass out fliers, gather names and contact information, and collect the $50-per-household fee for the attorney the neighborhood plans to use, Hebert said.
• The association's attorney has also suggested that it incorporate Fort Worth's Western Hills neighborhood into the North Benbrook negotiating group for more clout, Scales and Hebert said. Representatives of the two neighborhoods were due to meet this weekend, Scales said.

Hebert said the neighborhood has been able to get homeowners to hold off from signing since Chesapeake signed up most of Pecan Valley.

Apart from that neighborhood, "I don't think even 10 percent have signed," she said Saturday, as she was walking through her neighborhood passing out fliers and tickets to the next neighborhood association meeting.

That meeting is 6:30 p.m. Nov. 27 at Waverly Park Elementary School. The meeting is open only to Benbrook East property owners (Sunset Terrace, Dunlap Addition, Westvale, and North Benbrook Addition), Hebert said. Property owners must have tickets from the association to attend. Click here for contact info.

After that meeting, the neighborhood is looking to hold another meeting to bring the Brookhaven, North Benbrook Central, and North Benbrook East groups together, possibly as early as December, Scales said.

Some of the North Benbrook drill sites are controversial. Hebert said the neighborhood is largely OK with one potential Chesapeake site off of Mary's Creek, near Pecan Valley.

But both HTP and Chesapeake, and possibly Fleet, are interested in drill sites in Palomino Estates, a subdivision in the middle of North Benbrook that is under development, Scales and Hebert said. The neighborhood has already put the city on notice that it will oppose any drilling in Palomino Estates.

"It's too close to homes," Hebert said.

It's not clear how the plans of the drilling companies would be affected by the unavailability of sites in Palomino Estates, she and Scales said. The neighborhood isn't clear on where XTO might drill from.

Leasing activity has picked up throughout Benbrook. Competition for leases has broken out in Mont Del/Country Day Estates and homeowners in Timber Creek/Trinity Gardens/Trinity Estates are trying to foment a lease battle. Colt is working leases in North Benbrook for Chesapeake and in Timber Creek for XTO.

We want to hear about what's happening in your part of Benbrook! To fill us in, please drop us an email at snishimura@star-telegram.com.

-- Scott

(S-T photos: Pecan Valley Golf Course, Pecan Valley Park)

Lease battle busts out in Benbrook's Mont Del

Benbrook's Mont Del Estates Homeowner Association is asking property owners not to rush into signing sweetened offers they've received from Carla Petroleum/XTO Energy and Four Sevens/Chesapeake Energy.

"Our position right now is there's no rush to do anything," said Dwayne Hitt, an attorney and president of the Mont Del association. "The offers that we are getting ($10,000-per-acre signing bonus, 25 percent royalty) are behind ones that have been signed in Fort Worth. Noone is giving us any good reason for that. Our belief is that these offers would and should increase."

Offers began arriving in Mont Del mailboxes in October, and the financial terms have moved up quickly.

Mont Del's five-member committee is studying model leases and meeting with other neighborhood associations along what they've dubbed the "Bellaire Drive Corridor." Several adjoining associations, including Mont Del, have been holding discussions to determine if teaming up makes sense, Hitt said. Another meeting of that group is scheduled.

"We will look at what we have in common...and whether we can negotiate effectively as an alliance," Hitt said.

One group that may make a very logical partner with Mont Del is Country Day Estates, which neighbors Mont Del to the north and apparently is receiving the same offers as Mont Del, Hitt said. Mont Del is bordered by Highway 183 on the north, Loop 820 on the South, and Bellaire Drive and the Trinity River on the west.

Hitt said his committee is also studying environmental impact and other issues, along with the financial terms. The drill sites don't aren't controversial with the Mont Del group at this point. Carla/XTO have indicated they plan to drill south of Interstate 20 and Chesapeake has said it's secured a drill site along Vickery Boulevard, Hitt said. (Other Benbrook neighborhoods south of Interstate 20 also say they've heard of prospective drill sites near the highway.)

-- Scott

Mont Del (Benbrook) offers keep getting richer

A Benbrook property owner reports that Four Sevens/Chesapeake has now matched the Carla Petroleum/XTO Energy offer to residents of Mont Del Estates and scheduled four signing parties.

-- Scott

Benbrook's Mont Del stokes competition for leases

Property owners in Benbrook's Mont Del Estates neighborhood are getting some competition for their leases.

A property owner reports that Carla Petroleum, signing leases in the area on behalf of XTO Energy, has issued a fresh offer that includes a $10,000-per-acre signing bonus. Carla had been offering an $8,000 bonus, five-year term, and 25 percent royalty.

It has competition from Four Sevens/Chesapeake Energy, which property owners say was offering the same terms as Carla's first offer.

Property owners in North Benbrook have been organizing around their lease offers since June, and property owners east of Winscott Road are organizing.

-- Scott