DON’T SIGN
THAT GAS LEASE (JUST YET)!
Dear Ridglea North Neighbors,
Well, things have changed considerably from last fall on the gas
lease front. You will remember that at that time Chesapeake Energy was
offering a $4,000/acre signing bonus for a three-year term and a 25% royalty.
That offer was tied to the proposed drilling site on Calmont between the water
tower and the neighborhood swimming pool. When Chesapeake's effort to use
that property as a drilling site was unsuccessful, their activity in our
neighborhood subsided considerably.
Many of you are also aware that over the last couple of months
Chesapeake has once again been actively soliciting gas leases in Ridglea North.
I am advised that Chesapeake plans to use the property between Bryant Irvin and
Westridge, where the old apartment buildings have recently been razed, as
the site by which they plan to reach Ridglea North through horizontal drilling.
Chesapeake has now made a tentative offer to Ridglea North
property owners, as follows:
* $25,000/acre bonus per net mineral acre;
* primary term of three years with an option to extend for
an
additional two-year period for additional bonus of
$20,000/acre
should the option be exercised;
* 25% royalty;
* no surface use; and
* donation to neighborhood of $25,000 if Chesapeake can
acquire 70%
of total neighborhood acreage.
This offer is, of course, a significant increase over the
offer made last fall, as well the $10,000-$18,000/acre bonus money that has
recently been offered. However, there are still issues being
addressed, including the manner of royalty calculation, the location of
pipelines, and whether Chesapeake will commit not to drill within Ridglea North.
That is the "tentative" part of their offer. It is my personal opinion
that we would all be well served to hold off on any commitment to Chesapeake
until these issues are resolved. Unified opposition to the proposed Calmont
drilling site made a difference last fall, and remaining unified can help assure
the best possible outcome for Ridglea North in the future.
The decision as to whether, when, and for what terms a property
owner signs a gas lease is strictly up to the individual property owner.
The Ridglea North Association is not going to advocate for or against signing a
lease, but will provide additional information for your use in making your own
determination as it becomes available and reliable. I will let you know once
the remaining issues noted above relative to Chesapeake's latest offer have
become clearer. Those issues are significant from the financial standpoint
of the lessor/property owner, and, more importantly to me, the potential impact
upon quality of life in Ridglea North.
Thank you for your attention and consideration.
Andy Bradshaw
President, Ridglea North Association
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