1. What If I didn't sign a Letter of Intent with the Coalition?
Chesapeake Energy has stated that anyone who owns property located within the leasing project boundaries and/or owns the mineral rights to that property, and is not currently under lease with another party, will be allowed to participate.

2. Can I review the exact lease form before signing?
Absolutely, and this is highly recommended and you may want legal advice too. You can stop by any of the signing events and review same and get a copy.

3. What if I don't want to sign a lease?
This is your choice, but you subject to losing the signing bonus or royalties and other benefits of this lease proposal.

4. Does each property owner now have to sign an individual lease?
Yes, each property owner must now sign an individual lease if they wish to take advantage of this deal. The Coalition committee simply negotiated favorable terms for your individual lease. If you do not wish to sign the lease that the Coalition committee negotiated, you are under no obligation to do so.

5. Is there any reason to hurry and sign at this time?
We want you to have reasonable time to read the lease thoroughly and understand what you are signing. We also strongly urge you to carefully consider all the facts. With that said, there is no guarantee that these lease terms will be available after the leasing program ends, so decide wisely.

6. Exactly what company am I signing with?
Your lease will ultimately be with the Chesapeake Exploration, LLC. However, for internal reasons, our Coalition leases will be taken in the name of Chesapeake's leasing partners, Dale Property Services, L.L.C., and Petrocasa Energy and then assigned to Chesapeake .

7. Why isn't there a place for Chesapeake to sign my lease?
For several legal and practical reasons, it is standard practice in Texas for oil and gas leases to be signed only by the Lessor and not the Lessee.

8. Why doesn't the lease expressly state the signing bonus amount?
In Texas, the signing bonus is rarely stated in the lease document. This may be a relic from the days when operators could keep the current rates a secret from the general public, back before the internet. It is somewhat similar to your property deed when you bought your house, which most likely did not contain the sales price. However, please take your calculator and check the figures for your bank draft to make sure you agree with the figures.
Note: Be sure to keep a copy of the bank draft for your records. This may be handy in the event Chesapeake exercises the option to extend the lease at the end of the primary term because at that time a second bonus payment will be required and you'll be able to make sure the amount is correct.

9. Can I sign a lease with more than one company?
No, leasing your mineral rights is exclusive. You can only sign with one company. Each property can be in one unit and one unit only for the Barnett Shale formation. You would get royalties only from the wells in the unit where your property is located.

10. Is there any cost to me in the lease signing?
No.

11. Will I have to prove that I own my mineral rights in order to qualify?
No. Chesapeake will do a mineral rights title search on each property. The benefit to you is that they will take care of this. They will determine whether someone other than you claims to own some or all of the mineral rights to your surface property. You do not have to prove anything, unless there is a title dispute. Simply assume that you own your mineral rights until and unless Chesapeake proves conclusively otherwise. Of course, if you have irrefutable proof that you own your mineral rights, then by all means bring that to the signing event.

12. What does it mean, 3 year lease with 2 year option?
If no wells have been drilled and there is no production at the end of the first three years, then Chesapeake can pay us again for another two years.

13. When will the lease expire?
Basically, the lease will expire three years from the date you sign it, unless Chesapeake either (i) exercises the two year option and pays you for the extra two years, or (ii) commences drilling operations on a unit in which you are pooled. Then, once gas is being produced from at least one well in any unit you are in, the lease will be "held by production." As stated in the lease, "This Lease is for a term of three (3) years from the date first written above (called "Primary Term") and so long thereafter as oil or gas is produced from the Land in paying quantities." This means that regardless of how long it has been since the lease was signed, if gas is being produced in paying quantities (enough to make a profit), then the lease remains in effect.

14. Will I need to get a legal release (called subordination agreement) from my mortgage company?
It depends on each individual lessor's fact situation, and terms of any mortgage on their property. However, your mortgage holder or Chesapeake may require a subordination or non-disturbance agreement and the lease provides for Chesapeake to use commercially reasonable efforts to attempt to get it worked out and obtain such non-disturbance agreement from the lien holder.

15. Will signing the lease also provide a waiver or set back?
No, signing the lease does not provide a waiver or set back, these are two separate deals. Although Chesapeake may request that a waiver be signed, the city ordinances dictate the format of a waiver if one is needed. If it is determined that a waiver is needed for what ever reason each property owner will have to determine for themselves what they want to do about signing the waiver or not signing it. It is standard practice in Tarrant County for companies to offer additional compensation to the property owner for a waiver.

16. When and Where can I sign?
We are currently Signing. The location and schedule is posted on our website.

17. What do I need to bring to the lease signing meeting?
Each person signing must have a photo ID. You will also need your Social Security Number (from memory; you don't need your SS card) to complete an IRS W-9 tax form. If there have been any life changes such as divorce, death, name change, etc., so that the title to the property doesn't match your current status then copies of supporting documents must be provided. You may need a copy of a probated will, a divorce decree, power of attorney, etc. If anyone is signing on behalf of a trust or corporation, you need to bring a copy of that portion of trust or corporate minutes which gives you the power to sign on behalf of that entity. Bring one extra copy of each document that you bring so it can be left in your file. This will make the process go more quickly for everyone. Bring your acreage calculation, showing separate numbers for any streets or other easements, or a copy of your property survey, if you have one. Bring a calculator to check the math.
Important: If you are married, in almost all situations, both spouses must come to the lease signing, as they will need both signatures.

18. How can I be sure that the lease I sign is the authorized lease that the coalition negotiated?
Coalition committee members will be at the signing events to verify same.

19. What if I disagree with the acreage calculation offered for my lease?
Bring your proof - survey, plat, calculations, etc. and be ready to show your numbers.
Note: The lease should cover to the middle of any adjoining streets/alleys in which you own the minerals, so your property size may increase over your deed calls. Here is an Acreage Calculator.

20. What if I cannot attend the signing meeting on the designated dates?
Please do your best to attend the Signing. However if you cannot attend on your scheduled date, please contact your respective lease broker.

21. What if I cannot attend the Signing Meetings because I live out of town?
If requested, Chesapeake will mail the necessary documents to non-resident property owners, to be executed, notarized and mailed back. Simply let Chesapeake know and they will arrange for your documents to be mailed you.

22. What if one of the joint owners of my property cannot attend the Signing Meeting, or is deceased, divorced, legally separated, in prison, incapacitated, unable to be reached, or their whereabouts are unknown?
Let Chesapeake know through the leasing agents and your situation will be addressed appropriately.

23. Will I get paid on streets, easements, etc. adjacent to my property?
Yes, if you own the minerals under same.

24. When will I get my bonus payment?
The agreement worked out with Chesapeake is that they will issue bank drafts, which are to be paid off within ninety (90) business days after the draft hits their bank. Therefore, the sooner you deposit the draft at your bank, the sooner it gets paid.
Note: Bonus and royalty payments are made contingent on your ownership of the minerals; obviously, if you end up not owning the minerals, then no payments would be due.

25. When will I start receiving royalty payments?
Per the lease terms, within 120 days after the start of production from any unit in which your property is included.

26. Why is Chesapeake paying with a bank draft instead of a check?
The reason this is required is to allows them enough time to verify the title and mineral rights before the money is paid. Since according to the lease, each property owner (Lessor) does not warrant the title or mineral rights, there is no guarantee that anyone signing a lease actually owns the mineral rights. It is the lessee's responsibility to verify this.

27. Where will the wells be drilled?
The well sites that will support our Coalition properties have not been fully determined and are subject to change anyway. However, before a well is drilled on a specific location, it must first have a permit from the Texas Railroad Commission and the city. The committee will attempt to keep you informed of specific drill sites when and if they are on the agenda for city approval. Further, at the signing events, Chesapeake will have updated information available in this regard.

28. When will the drilling begin?
Anyone's guess, and depends on where your property is located, but perhaps as soon as within the first year of the lease. Again, under the lease, Chesapeake has at least three years to drill a well, but there is no commitment or obligation for them to do so.

29. How do units work?
It is all based upon mineral acres (i.e the amount of minerals you own, not surface acres), but here is a simplified example. There are two small rural farms. Farm 1 has 100 acres and Farm 2 has 200 acres. Both farms sign mineral leases with the same gas operating company and they both get a signing bonus and 25% royalties with no costs. The company forms a unit, or pool, of 300 acres made of both of these farms. A horizontal well is drilled on Farm 2. The entire length of the horizontal lateral is all under only Farm 2. It produces gas and both farms get royalty payments, even though the well is not under Farm 1. Farm 1 gets 1/3 of the 25% royalty (because they have 100 of 300 acres). Farm 2 gets 2/3 of the 25% royalty (because they have 200 of 300 acres).
The well does not have to be placed under your property or even near your property in order for you to collect royalty payments. Your property must be unitized, or pooled into a unit, and there must be a producing well or wells in the unit, and then you will receive royalty payments provided that you signed a gas lease.

30. How is the Coalition paying the attorney representing it?
For the most part, Chesapeake has agreed to pick up the cost of the coalition's attorney as well as our other expenses that we have incurred in this regard.

31. Are the Coalition committee members compensated for their efforts?
No! Each member of the committee is strictly a volunteer, with no expectation of any compensation, remuneration, or gifts of any kind, now or in the future. The members are committed to conducting its business ethically and with integrity, and to a high standard of ethical values.

Each member of the leadership gets exactly the same "reward" that you do: a sound lease agreement with the same signing bonus, royalty percentage, and terms as everyone else in the coalition.

32. I'm going to sell my house. Can I retain the minerals?
Yes. In accordance with Texas state law, real property can be separated into the surface estate and the mineral estate, and these two entities may be severed and treated separately. If you own your home and the mineral rights, you can elect to sever the two and sell the house and surface land and retain your mineral rights.