Villages of Fairfield Neighborhood Group

Don't Sell Yourself Short!

Jan 13, 2008

Dear Fellow Fairfield Addition Neighbors,

Don't Sell Yourself Short! That is the best suggestion I have for you at this time. The lease packet some received last week from Four Sevens Energy Co. LLC. is not a package I would recommend. Based on what I?’ve read online, and what I?’ve heard from other Arlington residence, the offer we received is just the initial offer. There will be better offers to follow.

I went to the first meeting on Nov. 20 2007. This meeting was basically a way to intimidate you and twist your arm so you sign your lease. This meeting is nothing more then a hotel room minus the furniture. There were 3 tables in the room and representative behind each table. The representatives only gave vague information about the site location and anything else when asked. They did not have a Plot Map, (a map telling you where the drill site was going to be.), they didn?’t offer much information at all. Upon doing my own research, I found the drill site location to be just off Yaupon Drive. I found this information on the City Of Arlington?’s web site.

www.arlingtontx.gov/planning/gas_drilling.html www.arlingtontx.gov/planning/pdf/Gas_Wells/Gas_Drilling_Map/gas_drilling_layout.pdf

Attached is a copy of this map.

After reading numerous other neighborhood responses to these mineral rights lease, a common theme seemed to develop. That theme is that we need to be better organized and present a united front to receive better offers.

Please check out http://startelegram.typepad.com/barnett_shale/ to see what other communities are being offered and what they are doing.

I recommend we establish a Neighborhood Association and present our united stance to the Company wanting our leases. This can be accomplished by having a Neighborhood meeting, where everyone can attend and we all can discuss these offers. We need to unite to receive better offers. A newly formed Neighborhood association would send the signal that we are united and open the door for better offers. Please contact me via email (address below) and list the best time for you to attend a meeting. I will compile these times and determine the best time for everyone based on the responses I received.

There are a couple things you can do to help us keep you and the community informed.

(1) If you have an email address, please send it to Bill Tinsley at; Bill_Tinsley@sbcglobal.net
(2) share this information with your neighbors

The current offer is $5000.00 an acre. That sounds good on paper, but here?’s the catch. When you take the size of the average residential lot in our subdivision and multiply it buy the $5000.00 (for reference my lot is about .18 of an acre, so .18 x $5000.00 = $900.00). Now on top of this there is a W9 form that you must fill out for tax purposes. Assume that these are considered capital gain income, which would mean you would be taxed at 32% ?…. 900 x .32 = 288 $288 is the amt of tax I was pay on the signing bonus. 900-288= $612 dollars take home. This is the amount I would pocket just from the signing bonus. As you can see that?’s a more realistic number. I will not calculate the Royalty Payment as that depends on the # of people in the pool. Every one gets a piece of the piece so your share may only be $30 to $75 dollars a month. Not much in the grand scheme of things. That amt is also reported to the IRS.




Excerpt from http://startelegram.typepad.com/barnett_shale/

Pantego-West Arlington group agrees to rich deal
The Pantego-West Arlington Citizens Lease Committee is telling its property owners it's reached a rich lease deal with Carrizo Oil & Gas that includes a $15,000-per-acre bonus, short least period, negotiated drill sites, a $50,000 donation to fund a water study, and future contributions for "long-term improvements in Pantego's water supply."
The financial terms apart from the bonus include 25 percent royalty "with no deductions for production/transportation expenses on all revenue from natural gas produced in Pantego-West Arlington for a period of 18 months." The royalty calculations include the area to the "centerlines of streets, alleys, canals, creeks, etc.," the committee said in a message to property owners.
Property owners in the area received an offer from Dale Resources six weeks ago that offered, among other things, a bonus of $5,000 per acre. In addition, the committee says on its web site that it drew interest from XTO Energy and Paloma Resources.
The committee says Carrizo has entered into an agreement with TXU to conduct drilling on TXU's Luminant industrial site on South Bowen Road north of Pioneer Parkway. Carrizo proposes to drill at least six wells within Pantego, and another six in Arlington east of Bowen, the committee said.
The committee says lease documents will be coming soon to affected property owners.
"It is important for the integrity of the overall transaction that property owners resist any efforts from other companies to secure last-minute leases by offering higher bonuses," the committee said in its message. "...We feel we can demonstrate that the amount of the bonus is not the complete picture."

Dale, Paloma compete in McKamy Oaks (SW Arl)
Dale Resources and Paloma Resources are competing for leases in the McKamy Oaks neighborhood in Southwest Arlington off of Green Oaks Boulevard, between Park Springs and South Bowen Road, about a mile south of Interstate 20.
Dale's offer: $7,500-per-acre signing bonus, 25 percent royalty, three-year term, two-year option, and no surface access. It's also telling homeowners it's leased two drill sites north of Interstate 20. Dale sent its offers out in letters dated Nov. 14 and promptly scheduled a leasing meeting five days later, at the Pleasantview Baptist Church.
Paloma's offer: $7,000-per-acre signing bonus, with a $1,200 minimum, 25 percent royalty, three-year term, two-year option, no surface access.
Paloma is also trying to lease up the Hunterwood neighborhood south of Green Oaks and east of Park Springs, homeowners there report.
Paloma has been actively working to sign leases in Tarrant County, often ending up in competitive situations. It's currently signing leases in Candleridge, Wedgwood, North Benbrook, East Fort Worth, and Southwest Fort Worth.

Fairmount (FW) holdouts get their reward
The few holdouts in Fairmount (FW) Southside Historic District are about to get rewarded, if they're not holding out on principle.
The neighborhood is getting the word out to what it estimates to be the "100-plus" property owners out of 1,300 who haven't signed leases yet. The association doesn't have an iron-clad hold on who's signed; it put out signs asking the holdouts to respond, and more than 100 did.
Fairmount was able to foment competition, drawing XTO Energy (with Fort Worth Energy as its agent) into a negotiation for leases that Chesapeake Energy didn't sign up with its own offer.
The Fort Worth Energy/XTO offer, supported by the neighborhood association as "less disruptive and more financially rewarding:" $15,000-per-acre signing bonus, with lot calculations to the middle of streets and alleys; 25 percent royalty minus taxes, but with no reduction for production, gathering, transportation, processing or marketing costs; 48-month term; and a $10,000 donation to the neighborhood association for every 100 leases signed.
The environmental considerations were even more important to the neighborhood, said Patti Randle, the association's president. They include: no surface access operations, drill site at Jennings and Page, language that matches the city of Fort Worth's 600-foot minimum distance between the drill site and the nearest homes, no compressor within 1,000 feet of the Fairmount boundary, and no truck traffic within Fairmount.
"Our No. 1 issue was to have safety in the neighborhood," Randle said. XTO and Fort Worth Energy "were just really accomodating with all of it."
Like their South Side neighbors in Ryan Place, Berkeley Place, and Mistletoe Heights, which negotiated similiar agreements with Fort Worth Energy/XTO, the Fairmount association did not want a potential drill site on 8th Avenue, which Chesapeake proposes.
Fairmount was unlike those three associations in that a large number of its property owners -- led by the high numbers of landlords in the neighborhood -- signed leases before the association was able to organize.
XTO's proposed bonus stood at $10,000 as recently as October, but the company raised that to $15,000 within the last few weeks, Randle said.
David Thrapp, head of Fairmount's gas committee, said a joint South Side committee that negotiated a template agreement with Fort Worth Energy/XTO was a huge help.
"I hope we protected Fairmount," he said. "That was the whole purpose."
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.)