A funny thing happened on the way to the closing of the Tioga Landowners/ eCorp/ GasFrac Napalm Clusterfrack. Some of the landowners realized that a working interest in an oil or gas well is, under the law, a security . That exchanging a mineral right for a security requires an offering to potential investors – the mineral rights owners, the landowners. With disclosures of risks. And can only be offered to qualified, experienced investors. Not landowners who have zero experience in oil and gas drilling. Particularly when the business venture involves fracking wildcat uneconomic dry shale gas wells with napalm. What could possibly go wrong ?
So now they are going to have yet another meeting . . . To “rethink” where they’re at, and maybe hire some new advisors that know a napalm clusterfrack from a monkeyfrack palm tree:
“Tioga County Landowners Group
When we announced our opportunity I indicated that we were working
hard to refine the deal structure. In our enthusiasm and haste to
inform all of you of our agreement we announced a proposed complex
deal structure giving landowners an economic stake in the company
developing their mineral rights. As we worked toward a definitive
agreement we identified issues and short comings which had to be
address. Many of you liked the deal but some did not. Accordingly, we
have gone back to the drawing board to continue the process of
identifying a deal structure that works effectively for all parties.
We need to take the time to fully evaluate our offering to impart the
greatest reward to all of you with the least complexity to manage and
understand. I can assure you that we have a great working
relationship with eCORP and are working hard toward a creative
We had mentioned the possibility of a meeting in Candor this week at
our meeting in Tioga Central School on Wednesday April 18th. We are
rethinking the deal so we did not schedule the meeting in Candor. It
will take a few weeks for us to work thru other business scenarios and
put together the details we all need to understand. In the meantime we
are going to focus on doing the job fully before we speculate on the
end result. I need to spend my time working on the deal. I can assure
you this is not easy and I appreciate you patients.”
Read the last line. Your “patients” ? Whoever said that napalm clusterfrack shale $cammers cant spel gud ? Or think striahgt ? Who got the landowners into this misbegotten napalm clusterfrack ? Which lawyer represented them in signing a Memorandum of Understanding to be clusterfracked ?
The landowner’s attorney Chris Denton :
“The preliminary agreement still needs landowner approval and will be presented to the landowners’ group in about two weeks, said their legal representative Elmira attorney Christopher Denton. The paperwork and final details of the agreement also still have to be worked out, he said, land titles will have to be reviewed and drilling permits obtained from the state Department of Environmental Conservation. If things move smoothly, he said, drilling could begin about 60 days after the final agreement is signed.
“The language is everything and it all needs to be put on paper,” Denton said. “Something like this needs more than a handshake and both companies want details. This is a major breakthrough.”
Right. You bet. A major fracking clusterfrack that ran afoul of securities laws. Here’s how Chris Denton described the napalm clusterfrack to the press . . .
“Our intention is to prove up the play,” said Chris Denton, an
attorney representing the landowner coalition. The deal has been
accepted in concept by the leaders of the coalition and has to be
brought to the membership base of about 2,000 families in coming
weeks,” Denton said. “The deal would give landowners a working interest
in the development and production of wells rather than traditional
lease payments. It may take several months before the pieces of the
deal, including title searchs of property owned by the paricipants,
will be finalized,” Denton said.
Several months – or 2 seconds for some of the landowners to realize they were headed into a napalm clusterfrack. Without sound legal advice. Good fracking luck.