Friendsville Group Status as of 11Mar08:
We are going to try a weekly status note that will give the Group an update from the Core Team on progress toward reaching a Landowner favorable lease. Please look back here each week to get the latest on the activities of the Group. Once we have the eMail addresses loaded up from the returned Information Sheets, you will get an eMail when there are WebSite changes to view. If you have not yet submitted your Information Sheet, mail it in to:
Friendsville Group
P.O. Box 375
Little Meadows, PA 18830
The feedback on GAL (Geological Assessment and Leasing) from the Core Team and the overall Group has been mixed. No one voted to hire GAL with their existing contract. About one third of the folks felt that GAL should not be hired and that a better deal could be obtained by hiring an experienced Oil and Gas Attorney, having them write our own contract, and then bidding it out to the Energy Companies. The other two thirds of the people were undecided about hiring GAL. They saw benefit in the Consultant handling the Lease and in providing Oversight Services, but viewed the existing contract and definition of services as unacceptable. In light of this, the Core team has decided to postpone the decision concerning the hiring of GAL until:
1. GAL has completed their formation of an LLC.
2. A clear written definition of services provided by the LLC is obtained.
3. The terms and conditions of any contract with GAL have been reviewed by Legal Counsel.
While the open GAL items are being closed the Core Team will be looking, in parallel, for experienced and seasoned Oil and Gas Attorneys that could work with us to write our own lease.
The Friendsville Group size is around 19,000 acres. We believe that amount of acreage will give us a competitive bargaining position with the Energy Companies. Landmen offers from at least two Gas Companies have increased to $1500 per acre for 5 years at 15% royalty driven up by market price and not yet by competitive bids. Unfortunately these leases are still written very much in favor of the Gas Companies and are not in the best interest of the Landowner. The Core Team believes that a Landowner favorable lease with better upfront money and better royalty is still achievable for the Group. We want to continue to assemble our Lease with urgency, but it is apparent by the doubling of the upfront money and the increase in the royalty to 15% since the 2Mar meeting that patience before bidding is in order to allow the upward market pressure to drive up the financial terms.
On 16April at the Tunkhannock High School there will be an Energy Company sponsored exhibit and Penn State Cooperative Extension Natural Gas Workshop. Anyone who has questions or seeks more information on Natural Gas Leases should attend this workshop. See the Penn State Wiki at
http://naturalgaslease.pbwiki.com/ under "Penn State Programs" for more information on the session. There are currently no plans to bring more gas experts in to future Group meetings for education so please take advantage of the Penn State workshops as an excellent source of information.
Thank you,
The Core Team