We have signed an agreement with Chesapeake Energy, LLC to represent our members in two units to be drilled from the TCC padsite at Harwood and Blvd 26 in North Richland Hills, Texas. One unit includes most of “Home Town”, and the other stretches south from Harwood toward the North East Mall.
The TCCD South unit proceeds west from the TCCD padsite through the apartment complex north of Emerald Hills, through Walker Creek Park, and through Home Town to Mid-Cities Blvd.
The Leaf 3H unit stretching south from the TDDC padsite is mostly commercial and already under lease, but includes our members from Harwood to Strummer. Everyone has been contacted and offered to lease on our negotiated terms with Chesapeake.
The lease agreement includes a $2,500 per acre bonus, with the property measured to the center of the street. This is about $1,000 higher than most local offers in past year or so. This center of the street measurement increases the lot size by approximately 10-15% on a normal lot and about 20-25% on a corner lot. (Note: Drainage canals are included also.)
The royalty percentage in our lease is 25%, and our 15 page lease includes environmental protections and limits gathering deductions that could reduce your royalty payments. We conducted signing meetings August 17th and August 19th. The property owners within the two units were notified by a letter co-signed by Chesapeake and the Coalition. Out of town and absentee mineral owners are being contacted individually to sign their lease.
This leasing agreement with Chesapeake is significant, as it establishes a working relationship between Chesapeake and the Coalition that will extend to our membership in other units that are created as new wells are permitted and prepared to drill. One example is the padsite at the Church of Christ on Loop 820 and Rufe Snow. According to the City, that padsite will be accessible after the first of the year due to the highway construction. If the price of natural gas increases over the winter, it will provide incentive to accelerate that project.
Again, the terms of the leasing program with Chesapeake seem to be much better than other lease offers that have been made in the area over the recent past. That said, you are under no obligation to accept the Chesapeake lease terms we have negotiated, and are certainly free to sign with another lessee…just beware of the fine print!
Stay tuned, as new information will be coming forward and posted as it occurs over the next couple of months.
Paul Lee, President
North Hills Mineral Owners Coalition