Oil/Gas lease information from Kelly Farm board of directors
Scott Chenore
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BOARD OF DIRECTORS: Mark Jones, PresidentDoug Otte, Vice President Sheryl McBride, SecretaryDiane Alexander, Treasurer Scott Chenore, Board Member Michael Jehnichen, Board Member Kevin O’Reilly, Board Member
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July 12, 2011
Homeowners and Members of the
Kelly Farm HOA:
The Board has received a number of inquiries from homeowners regarding competing offers to lease each property owner’s mineral rights from Land Energy, Inc., and Waltel Minerals, LLC. Each property owner will need to make a decision regarding which Company to go with or in the alternative, not to sign any oil and gas lease. The purpose of this e-mail is informational only which may help individual property owners to reach a decision.
1. The Board has agreed to sign a Lease with Waltel Minerals, LLC, to lease the common areas for mineral exploration. Waltel Minerals is going to utilize Synergy Resources Corporation to complete the drilling. Synergy has a pad site near Kelly Farm which has been approved by the City of Greeley currently in place.
2. The Board’s attorney for this issue has checked with the City of Greeley and Land Energy, Inc. does not currently have a pad site near Kelly Farm which has been approved by the City of Greeley. That does not mean that an application may not be filed at a future date, but currently no pad site near the Kelly Farm been approved.
3. The Board believes the Waltel Mineral Leases may lead to the completion of a well and the receipt of royalties by both the HOA and individual lot owners if the individual Waltel Mineral Leases are signed and returned by property owners.
4. The Board has received information from its attorney that if an individual property owner does not sign either proposed Lease that under Colorado law the exploration company can still drill a well and each owner who elects not to sign will be subject to a forced pooling arrangement. The Board is not in a position to give legal advice regarding the provisions contained in the forced pooling statute. If an owner wants additional information about forced pooling, it would be necessary for the owner to contact an attorney who is experienced in oil and gas matters for additional information.
The Board is aware other oil and gas exploration companies have received site permits from the City of Greeley and directional drilling has occurred in other areas of the City beneath common areas and residential lots. Because of the recent improvements in drilling technology, it is likely oil and gas exploration will continue to occur.
Sincerely,
Board of Directors of the
Kelly Farm Owners Association