Hemi Energy Group Inc. (fka HMGP)

[kelseyf]

I find the below Fort Worth Star-Telegram news articles very interesting as they both relate to the on going Tarrant O&G activity; note the first article is in todays paper 02/05/08.

What I find interesting is the development of how these communities/Homeowners association are learning very quickly the opportunity that this regions offers.

So I ask myself the following questions:

1. Hemi Energy indicated in its 12/18/07 PR that it acquired leases in the Barnett Shale/Tarrant county, so my first question is how many more Tarrant county leases has HMGP been engaged in or obtained since 12/18/07? As you read the articles below keep in the back of your mind how well Hemi treats their Kansas lease partners. The little intangibilites of striking a deal

And:

2. If homeowners are now catching the O&G bug with deals that are pulling in big $$$, royalties and signing bonues on multi year agreements, then my money saids that HMGP along with the other smaller O&G companies are well ahead of this "homeowner curve" in obtaining prime and strategic leasing site location in Tarrant county that must be in very prime locations.

Again look at Dale Research and Paloma LLC as to how successful a small O&G company can be with this type of business approach just in Tarrant county. And these two companies do not have the additional business features, services and other locked up leasing interest that HMGP in areas outside of Texas.

Interesting reading and I have outlined in bold pieces of these two articles that caught my attention.

Kels

February 5, 2008 Star-Telegram

Burleson "Holdouts" organize
To hear the folks in South Burleson tell it, lately, landmen have been crawling over the city like ants.

The South Burleson Homeowners Association reports it's changed its name to the "Community of Gas Lease Holdouts," as "this seems to define our reason for being and so many were afraid of the Homeowners part of the name, because they thought that we were going to restrict some things in their neighborhood."

The Community of Holdouts says 19 landmen representing Chesapeake Energy, Devon Energy, and several other entities have peppered South Burleson with lease offers carrying $1,500-$10,000 per-acre signing bonuses and 21-25 percent royalties.

The Community has had two meetings so far, including one Saturday. More than 300 people attended and "new properties are being added daily to the over-350 properties already registered," says Bill Mahanay, [e-mail], spokesman and organizer for the group. "With many volunteers to make phone calls and canvas the areas of South Burleson," the group hopes to add more properties to its list, Mahanay said.

The group's next meeting is 4 p.m. Feb. 23 at the Burleson Church of Christ, 820 S.W. Wilshire.

-- Scott Nishimura



January 22, 2008 -Star-Telegram

N. Benbrook neighborhoods get $15,000 deal
Organizers of the North Benbrook Neighborhood Association saw something they didn't like when Paloma Resources agreed Jan. 9 to sell leases to Chesapeake Energy and go to work as an agent for the company: the loss of a competitor in the Barnett Shale neighborhood leasing game.

The next day, HTP and Associates, which had been offering to sign leases in North Benbrook for Paloma, contacted the neighborhood with a significantly improved offer: $15,000 per-acre signing bonus, 25 percent royalty, and a three-year term with a two-year option.

"It was all contingent upon us signing leases by the 18th of January," Morris Scales, one of the North Benbrook organizers, says. He quickly put out the word that "I thought this was a good deal," possibly "the best we were going to get."

Committee members bought in and the neighborhood rushed to get leases signed over the next eight days. It organized signing meetings at a Western Inn hotel in the city. Scales says the group even sent lease packets to property owners who were out of town or working abroad, as far away as Qatar, Brazil, California, and Arizona. In one case, they tried to reach a couple on a cruise vacation in Australia and New Zealand.

The lease agreement covered more than 800 homes in several neighborhoods. Two coalitions -- Scales' and a second, smaller one, led by the Brookhaven Estates neighborhood, which received lease offers earlier than the rest of North Benbrook and hired an attorney to represent them -- negotiated similiar contracts with HTP. Scales' group took on the same attorney as an adviser.

Among the terms, the 25 percent royalty is free of most costs. Scales, an aeronautical engineer, said the acreage calculations don't include measurements to the centers of streets for purposes of the signing bonuses, "but we get that in the royalties." The association also doesn't know for certain where the drill sites will be.

"It remains to be seen, to a certain extent, how this is going to develop," Scales said. But "if there's a drill site that's a high-impact site (meaning it falls within the city's permissible distance to structures such as homes), we reserve the right to talk to our City Council."

He also believes it's still possible that Chesapeake and XTO Energy, which had contacted the neighborhood to determine its interest in a negotiation, could end up trading leases, given that XTO already has a working well nearby off of Chapin Road.