Property owners have confirmed they’re starting to see their bonus checks. Fort Worth developer Leonard Briscoe Sr. has ended more than a year of delays and is now paying gas-lease signing bonuses he owes — and offering a higher rate if property owners agree to longer lease terms.
Briscoe said this week that since the end of April, his company, Glencrest Resources, has paid bonuses to about 1,200 of the 3,600 property owners he signed leases with in Fort Worth, Forest Hill and Mansfield. Briscoe started signing leases as far back as 18 months ago, and property owners have been looking for their $3,000-per-acre bonus checks since then. Some, finding Glencrest never filed their leases, subsequently signed leases with another land agency, Dale Resources.
Briscoe said he has secured financing that is “more than adequate to meet our current goals.” He declined to reveal the source but said it was a New York oil and gas investment firm. Briscoe said his goals include drilling “five or six” wells, but he hasn’t filed for permits yet with the Texas Railroad Commission. He said he has secured the sites with leases, but he declined to specify locations.
Property owners confirmed that they’re beginning to see bonus checks.
Grace Winston of Mansfield said she was told that Glencrest Resources couldn’t find her paperwork, but her neighbor Josie Brooks said she already got her bonus — a check for $2,925 based on the $6,500 per acre that Briscoe is now offering.
“I was really satisfied,” said Brooks, who had signed her lease in November 2006 and had once complained about the long wait. “A little is better than none.”
Winston said she was assured that the company would work on finding her paperwork and get back to her in a couple of days. That was last Wednesday, she said.
Briscoe said he has upped his bonus offer to $6,500 per acre to everyone who signed leases with his company, in an effort to “keep pace with the market.”
He added that if the market heads higher, he’ll offer more. He said he feels that raising the signing bonus is just “the right thing to do.” Plus, he’s heard that competitor Dale Resources, on behalf of Chesapeake Energy, is offering neighbors in the same area a bonus of $5,000 per acre.
David Buchanan, a spokesman for Dale, said Wednesday that signing bonuses offered in the areas in which his company is competing with Glencrest Resources vary widely.
Briscoe said he has offered to extend the length of everyone’s lease to five years, from the previous term of three years. The longer term is meant to help give him more time to drill, he said. Briscoe said the longer lease terms will benefit property owners because it means there’s a better chance for them to collect royalties from drilling if Glencrest has more time to get started.
But industry observers have generally seen longer lease terms as being worse for property owners because they have to wait longer to sign a new, and perhaps more lucrative, lease if drilling doesn’t ever start. Shorter terms, by contrast, force earlier drilling and, thus, earlier royalty payments.
In order to get the larger bonus from Glencrest, property owners must sign an addendum to their lease, allowing the company a longer lease term, Briscoe said. Glencrest is still offering a royalty of 25 percent.
The lengthy delay and difficulty in reaching Briscoe or his associates had caused many property owners to doubt whether they’d ever get their money.
Forest Hill resident Sam Solis said he was surprised to hear that after calling Glencrest Resources on Wednesday, he could come by the office next week and pick up a check for Briscoe’s $1,625 per-lot minimum.
“I’m still in awe,” he said. “If it’s real and it clears the bank … then it’ll be OK. If it’s not, then we’ll continue with the saga I guess.”
But Briscoe said the doling out of bonus money is evidence enough.
“We are now a full-fledged exploration company,” Briscoe said. “We can carry out in a competent fashion our program from leasing through exploration and completion.”
Dale Resources is competing heavily with Glencrest, offering about 10 active wells in southeast Fort Worth, and five of those close to the areas around the Glencrest neighborhood, Buchanan said.
Dale is also offering what is called a “top lease” to property owners who have already signed with Glencrest.
Dale will pay a small portion, roughly around 20 percent, of the bonus it’s offering to those property owners. If the property owner’s lease with Glencrest runs out without drilling having occurred, Dale would step in and pay the remaining 80 percent of its offered bonus and proceed as if it had just signed the property owner up to an option term.
Reva Campbell, a resident of Forest Hill, said she was looking at signing a top lease with Dale, but thought that she’d give Glencrest a little more time to pay her a bonus.
“I hadn’t heard anything,” she said. “I’m frustrated about it.”
But her tone changed after being told by the Star-Telegram that Briscoe increased the offered bonus.
“He must have won the lottery,” she said. “But I’m not complaining. I just wish he’d pay me.”
Some property owners have said they were concerned about signing a lease with Briscoe based on his past legal problems.
The former Fort Worth city councilman was convicted in 1993 on federal charges that he gave an illegal gratuity while developing low-income housing projects. In 1997, he pleaded guilty to giving a false statement about kickbacks from a Florida construction supervisor. Both times he drew prison terms.
Briscoe has acknowledged his troubled past but has also said he was overwhelmingly asked by members of the Glencrest Civics League, similar to a neighborhood association for the Glencrest area, to form a land and drilling company to compete with the larger, more established players. **SEE CLARIFICATION** The purpose was to offer “fairer” bonuses to residents of Fort Worth’s Glencrest neighborhood, which is predominantly African-American, Briscoe said.
Briscoe, the largest individual shareholder in Glencrest Resources, said he’s not looking to get rich off the company.
“I’ve been rich before,” said Briscoe, 68. “I don’t need to be rich again. I only wear one suit at a time and drive one car at a time.”
Attorney John Hart is representing Fort Worth resident Pamela Ellis, who is trying to get her lease nullified so she can sign with another land company. Hart said Briscoe’s paying of bonuses now raises more questions than answers.
“What are these landowners being asked to sign?” asked Hart, who has been seeking a class-action status for Ellis’ case since filing the case in state district court in Fort Worth in October. “It’s our position that many of these leases are either void or they’re voidable.”
WHERE TO GO
Here is the contact information for property owners who have signed a mineral-rights lease with Glencrest Resources.
944 E. Berry St.
DAVID WETHE, 817-390-7616 email@example.com CLARIFICATION: The Glencrest Civic League is a Fort Worth neighborhood association. Its status is mischaracterized in this article. (5/30/08)