The Coalition: The BC-MRC (www.bc-mrc.com)was formed to represent property owners within an area generally bounded by Colleyville Blvd./Brown Trail to the west, Hall-Johnson to the north, Highway 121 to the east and Harwood Road to the south. That area comprises close to 5,000 acres and almost 10,000 property owners. Included are more than 60 individual homeowners’ associations with at least 50 owners in each, as well as numerous other subdivisions.
Purpose: The BC-MRC has negotiated an oil and gas lease agreement containing attractive economic terms, while ensuring that protective covenants dealing with quality of life, environmental and other concerns are adequately addressed.
Costs/Benefits: The BC-MRC is composed entirely of volunteers living within our area. There are no costs to join, and no ongoing obligation on the part of any owner to accept the negotiated lease or pay any expenses. Reports have shown that neighbors who band together have been able to obtain much better terms than individuals negotiating on their own behalf. Our coalition also offers centralized resources and expertise not otherwise available.
Expertise The BC-MRC leadership team is comprised of 14 individuals who have extensive experience in (1) business negotiations, including oil and gas leases as well as larger oil and gas purchase, sale and merger agreements, and also a wide range of real estate agreements; (2) legal matters involving a wide range of oil and gas and real estate matters, including litigation; (3) project management, a key ingredient with a group of this size; (4) business development, to maximize participation and bring new members into the coalition; (5) information technology, and (6) membership organization administration, another huge benefit when dealing with detailed individual data involving a 10,000 member group.
In addition, the coalition has retained an oil and gas attorney who has over 25 years experience and who has successfully assisted numerous other area coalitions in the area in securing attractive lease agreements.
Leasing Activity: The Barnett Shale is a geologic formation covering over 5,000 square miles and 19 counties. Experts believe it may be the largest onshore field in the U.S., with over 30 Trillion cubic feet of natural gas resources. Leasing and drilling activity has increased exponentially in recent years as technological advances, cost reductions and natural gas price increases have made drilling economics significantly more attractive. Initially focused on rural areas, activity has now reached urban areas such as ours, and the size of the BC-MRC offers companies one of the few remaining, attractive tracts available in what is referred to as the “core” area.
XTO Energy and Chesapeake Energy have been particularly active in surrounding areas, and both at one time offered a bonus of $18,500 with a 25% royalty, with their standard lease provisions, to owners in certain areas within the coalition boundaries.
Competitive Strategy: The BC-MRC seeks to optimize its acreage coverage to maximize its attractiveness to potential partners. We obtained information and reviewed or analyzed the agreements of the vast majority of coalitions formed to date. We identified potential partners and drill sites within the BC-MRC boundaries. We retained a lawyer who is familiar with existing agreements and negotiating strategies, in part because he has been involved in many of them. We built an information system that allowed us to easily show the gas company the strength of our coalition in terms of acreage, as well as allowing us to assist them in completing the transaction at organized signing sessions.
Finally, we negotiated on a straightforward, honest basis to obtain a deal which is attractive to both sides.
