A number of people have emailed the Coalition asking us what’s going on with the NHMOC so we thought it was time to update you on what’s been happening.
Some folks in Richland Hills and South Hurst have been receiving offers from Dale (Chesapeake) for $2000 per acre for a 5 year lease. This is the Coalition’s current position:
- Due to the low price of natural gas, $4.00 per 1000 cubic feet (MCF), the gas companies are not seeking new lease agreements for large tracts like the NHMOC. They are, however, seeking out individual land owners in areas where they are already heavily leased or have leases expiring. They are trying to tie up the remaining unleased property on the cheap.
- Our footprint is surrounded by property that is currently under lease to Chesapeake and several properties within our footprint, such as the Birdville School properties are also leased to Chesapeake. Chesapeake is still attempting to tie up loose ends in areas where they are already heavily leased. These offers are low ball at $2000 per acre and only 20% royalty for five years.
- Chesapeake is seeking a joint venture partner to provide capital in exchange for a share of the Barnett Shale gas play according to a post on the Star-Telegram Barnett Shale Blog in late May.
- We have had some talks with, and are expecting an offer from, Vantage. We are not sure what their offer will be, but at least there is some interest.
- Range Resources has also contacted the Coalition for an initial discussion. They are drilling just south of HWY 10 and Hurstview. Chesapeake may also have a well going in there.
- Economists , analysts, and gas companies all predict the price of natural gas will rebound in 2010 and the gas play will again be very active. Bonus prices will also rebound.
The bottom line is that the drilling is getting closer to the NHMOC footprint, and that means the gas companies feel this area will be a productive field. We are seeing increasing interest in our area from several gas companies. Chesapeake is scheduled to start drilling in our area in 2010 from the TCCC well site at Harwood and Blvd 26. They have already secured a special use permit from the City of NRH, and have three RR commission permits for that location including one extending though Walker Creek Park, heading toward Hometown. The plan according to the City is for 12 wells there.
The Barnett Shale gas play is a long term issue. The demand for natural gas will continue to grow through efforts to “go green”. The US House recently passed a bill to limit the amount of carbon emissions allowed. This will increase the demand for natural gas to replace coal for the generation of electricity.
The consensus among those who study the financial markets is that the market for natural gas will be healthier in 2010 with higher prices and more drilling activity.
There will come a time when the price of natural gas increases, and joint venture capital will fuel a renewed interest in leasing coalitions such as ours. The royalty rates and protective clauses in our lease form, including payment for minerals to the middle of the street, will be far more productive for the property owners than what is being offered right now.
Feel free to pass along these points when your neighbors ask you what’s going on. As a Coalition, our position is that we are going to wait until the energy markets come back a bit more and negotiate the best possible deal for everyone in our Coalition.
We will continue to update this blog as new developments occur. In addition, when there is sufficient new material to warrant it, we will schedule another NHMOC meeting. In the meantime, please know that your Coalition is working for you every day to achieve the best possible lease terms, bonus payment and royalty rate that we can negotiate.
In the meantime, if you have some time and would like to volunteer to help research mineral ownerships in our area, please email info@nhmoc.com.