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On the Block: 1,600 acres of Illinois Farmland Sept. 10

Eddie Lee — Mon, 10 Aug 2009 21:26:55 +0000

VeraSun Energy will auction approximately 1,600 acres of Illinois farmland on Sept. 10 with Schrader and Westchester auction companies managing the sale.

The land, located in Montgomery, Madison, and Vermilion counties, consists primarily of high-quality tillable farmland, including some located in areas that offer potential for industrial and commercial development.

The sale is being conducted as part of VeraSun’s efforts to maximize the return for its creditors as part of its Chapter 11 reorganization. The company had acquired the land over the years in support of its ethanol-related businesses.

“Because of the stability of farmland prices relative to prices of other assets in recent months, owners have been reluctant to sell their land. As a result, there have been fewer opportunities to obtain high-quality tillable land. By selling it in tracts, we will enable smaller bidders to participate on an equal footing with larger ones. In fact, 15 of the 25 tracts are 50 acres or less, and no tract is larger than 250 acres,” said Rex Schrader, president of Schrader Real Estate & Auction Company.

Properties to be sold include:

Approximately 487 acres in Litchfield, in Montgomery County. The property, which is primarily tillable farmland, will sell in 11 tracts ranging from approximately two acres to approximately 83 acres. It is primarily tillable farmland.
Approximately 380 acres in Granite City, selling in eight tracts ranging from approximately 1.2 acres to approximately 230 acres. The tracts, located two miles from I-270, include two homes and have rail access. The tracts include land near a new Lowe’s and Wal-Mart.
Approximately 733 acres in Danville, selling in six tracts ranging from approximately 35 acres to approximately 250 acres.

The auctions will be held in two sessions. At 9 a.m., the Montgomery and Madison county properties will be sold at Staunton Knights of Columbus Hall in Staunton, Ill. The Vermilion County land will be sold at 6 p.m. at Beef House restaurant near Covington, Ind.

Individuals seeking additional information can visit www.schraderauction.com or call 800-451-2709.

Duke Energy Makes Major Investment in GreenTrees

Eddie Lee — Tue, 23 Jun 2009 16:10:58 +0000

Duke Energy has become the lead investor in GreenTrees, a privately managed forest restoration program created and managed by C2I for landowners in the Lower Mississippi Alluvial Valley: Illinois, Missouri, Kentucky, Tennessee, Arkansas, Mississippi, and Louisiana.

This enormous valley once held 24.7 million acres of forest and emergent wetlands. Today more than 18 million acres – or 80 percent – has been cleared, resulting in the loss of critical natural habitat.

The program is expected to generate high-quality, verifiable carbon offsets that Duke believes will help reduce the overall cost of compliance with federal climate change legislation. Duke’s initial investment will result in the planting of more than 1 million trees on approximately 1,700 acres in Arkansas.

GreenTrees is designed to create, enhance, and sustain conservation and wildlife benefits from afforestation. GreenTrees provides landowners the most economic and environmental value for each acre of trees planted. The program utilizes a specific inter-planting of 302 cottonwoods plus 302 mixed hardwoods per acre. The specific design of 302/302 delivers more conservation value, more carbon, and better sustainable hardwood revenues than a previous design of 302 cottonwood and 151 hardwoods.

In exchange for the landowners’ long-term lease to prevent reversibility, GreenTrees offers a variety of short and long-term income opportunities. Landowners can simultaneously enroll the same qualified acres into GreenTrees, CRP, and other conservation practices, thus receiving multiple financial incentives and incomes together.

GreenTrees was founded by Izaak Walton League of America board member Carey Crane and Texaco Chevron Conservation Award recipient Chandler Van Voorhis. Both men have received great inspiration from Crane’s mother, Maggie Bryant. Bryant is a past-two term Chairperson of the National Fish and Wildlife Foundation and retired from her board position in 2001. She has been awarded the prestigious Chevron Conservation Award as well as the Governor’s Award for Conservation in Mississippi, and she continues to be active in conservation measures around the world.

Landowners are enthusiastic about GreenTrees. Arkansas landowner Brandon Stafford is a recent enrollee. Stafford found himself with 210 acres of un-irrigated farmland that he had to do something with. He enrolled it in CRP and GreenTrees. After the initial planting and subsequent sprayings Brandon says, “It’s amazing what the trees are doing.” The CRP and GreenTrees programs work in concert for him. Currently over 2,500 acres from 20 landowners are enrolled in the program.

To learn more about GreenTrees, visit their website: www.green-trees.com.

170 Acres on the Block Saturday in Illinois

Grant Gannon — Fri, 19 Jun 2009 07:00:10 +0000

Update: The complete tract of land went unsold during the brief auction. The first tract at 50 acres was passed on at $120,000, the second tract at 40 acres was unsold at $96,000 and the third tract at 80 acres was unsold at $192,000. A combination of all three tracts was passed on as well.

170 acres, broken up into three tracts of 50, 40 and 80 acres, goes on the block Saturday in Marion County, IL. The land can be used both for hunting and CRP income. Buy A Farm Land and Auction Co. will host the bidding.

The minimum opening bids on the property start at $2,400 an acre.

Located on Blackburn Road, 15 minutes from I-57 in Centralia, the property could be a solid buy if you happened to scoop up all three parcels. Each has a decent CRP income; they total about $6,500 per year. According to the listing, deer abound on the property.

This would make a nice long weekend retreat for hunters in St. Louis or Chicago.

Bids will be taken at the Iuka Grade School or online. 10% down is required at the end of the auction with the balance at closing.

Quail Unlimited Announces “Reload Iowa”

Eric OKeefe — Mon, 16 Mar 2009 12:11:01 +0000

The loss of more than one-quarter million acres of Conservation Reserve Program land is one of the many reasons that harvest numbers of pheasant and quail in Iowa have dropped from 1.9 million and 1.1 million in the 1970s to less than 500,000 and 54,000, respectively, last year. Quail Forever is out to change that.

The goal of “Reload Iowa” is to raise $11.5 million to establish and improve 1 million acres of wildlife habitat on private and public land across Iowa. These habitat improvements will not onlly benefit wildlife, but they will also provide additional benefits such as improving water quality, preventing soil erosion, and sequestering carbon, an important step in offsetting greenhouse gasses.

Illinois Land Auction Gins $24 Million

Eric OKeefe — Mon, 26 Jan 2009 17:22:02 +0000

A crowd of 800, including 250 bidders, gathered at the Crowne Plaza in Springfield on Jan. 21 and spent more than six hours and $24 million to acquire 4,000 acres of prime Illinois farmland.

The sale, which was conducted by Aumann Auctions, featured property in parts of four townships in Macoupin and Montgomery counties. According to local news reports, it was considered one of the largest in Central Illinois in the last few years and averaged $6,255 per acre.

More complete details are available through the auctioneer’s website.

Iowa Farmland Sets Record Highs for Sixth Straight Year

Eric OKeefe — Wed, 17 Dec 2008 07:00:06 +0000

Iowa State reports that the value of an average acre of farmland has increased for the ninth year in a row to an all-time high. According to the survey’s director, ISU Extension farm economist Mike Duffy, land values have doubled since 2003, climbing from $2,275 to $4,468 in just five years.

The 2008 average was an increase of $560 or 14 percent over last year. By comparison, 2007 remains the gold standard. Land values increased $704 over the previous year, a whopping 22 percent jump.

And what does the crystal ball reveal?

“Where land values will go in the next year or so is really anyone’s guess, but, overall, Iowa farmland should remain a good investment for the long run,” Duffy was quoted as saying.

A complete overview, courtesy of Iowa State University, is available here.

Chesapeake Gets $3+ Billion Injection for Marcellus Shale

Eric OKeefe — Mon, 24 Nov 2008 12:00:19 +0000

So the bottom has fallen out of the energy markets and commodity prices are dropping even lower. Next step? Time to welcome the overseas investors. Remember, folks, we’ve got trillions of dollars of assets tied up in land, and all of it is protected by Old Glory. No matter how bad Wall Street is faring, no matter how low consumer confidence drops, there are plenty of eagle-eyed investors with very deep pockets who look at our timberland, our shorelines, our minerals, and even our water, and what do they see?

A huge buying opportunity, which is exactly what Norway’s StatoilHydro did when they paid Oklahoma City-based Chesapeake Energy (NYSE:CHK) $1.25 billion in cash for a 32.5 percent interest in its assets in the Marcellus Shale, the natural-gas field that extends from western New York south and west across Pennsylvania to West Virginia. Statoil also committed to spend an additional $2.13 billion to offset Chesapeake’s drilling expenses. Here’s the full release from Chesapeake’s website announcing the deal on November 11:

Chesapeake Energy Corporation Announces Marcellus Shale Joint Venture and International Unconventional Natural Gas Exploration Alliance with StatoilHydro

OKLAHOMA CITY–(BUSINESS WIRE)–Nov. 11, 2008–Chesapeake Energy Corporation (NYSE:CHK) today announced the execution of an agreement for a joint venture with StatoilHydro (NYSE:STO, OSE:STL) whereby StatoilHydro will acquire a 32.5% interest in Chesapeake’s Marcellus Shale assets in Appalachia for $3.375 billion, leaving Chesapeake with a 67.5% working interest. The assets include approximately 1.8 million net acres of leasehold, of which StatoilHydro will own approximately 0.6 million net acres and Chesapeake will own approximately 1.2 million net acres.

StatoilHydro will pay $1.25 billion in cash at closing and will pay a further $2.125 billion from 2009 to 2012 by funding 75% of Chesapeake’s 67.5% share of drilling and completion expenditures until the $2.125 billion obligation has been funded. Chesapeake plans to continue acquiring leasehold in the Marcellus Shale play and StatoilHydro will have the right to a 32.5% participation in any such additional leasehold.

Additionally, Chesapeake and StatoilHydro have agreed to enter into an international strategic alliance to jointly explore unconventional natural gas opportunities worldwide. Closing of the transaction and strategic alliance is anticipated to occur by year-end 2008.

Helge Lund, President and CEO of StatoilHydro, stated, “I am pleased that we today have made a strategically important move by joining forces with Chesapeake, which is the leading U.S. natural gas player. We are establishing a strong platform for further developing our gas value chain business and growing our position in unconventional gas worldwide. The agreement we have entered into with Chesapeake provides us with a solid position in an attractive long-term resource base under competitive terms. Additionally, this deal adds a major building block to the gas value chain position we have established in the U.S., the world’s largest and most liquid gas market. This is a significant step in strengthening our U.S. gas position, building on our existing capacity rights for the Cove Point LNG terminal, our gas trading and marketing organization and the gas producing assets in the Gulf of Mexico.”

Aubrey K. McClendon, Chesapeake’s Chief Executive Officer, commented, “We are honored to establish a business relationship with StatoilHydro and are excited about the mutually beneficial nature of our transaction with them. We believe this transaction creates substantial value for both companies and unique opportunities for international growth with one of the leading international oil and gas companies. Jointly we can export our world class unconventional natural gas technology for further long-term growth.

“Chesapeake has now completed three shale joint ventures that collectively value Chesapeake’s Haynesville, Fayetteville and Marcellus Shale assets (before the joint ventures) at approximately $34 billion. Through these transactions, Chesapeake sold a 20% working interest in its Haynesville Shale assets to Plains Exploration & Production Company (NYSE:PXP) for $3.3 billion (thereby retaining an 80% working interest valued at $13.2 billion), a 25% working interest in its Fayetteville Shale assets to BP America (NYSE:BP) for $1.9 billion (thereby retaining a 75% working interest valued at $5.7 billion) and now has agreed to sell a 32.5% working interest in its Marcellus Shale assets to StatoilHydro for $3.375 billion (thereby retaining a 67.5% working interest valued at $7.0 billion). The total consideration to CHK from these sales has been approximately $8.575 billion, of which approximately $4.0 billion has been (or will be) in cash and approximately $4.575 billion is in drilling and completion cost carries. Furthermore, CHK retains the remaining ownership percentages of the joint ventures that have been valued at approximately $26 billion, or over $40 per share of value from just these three shale joint venture transactions. These joint ventures clearly demonstrate the enormous value of Chesapeake’s shale natural gas assets and the unique capability of our organization to develop them.”

Chesapeake was advised on the transaction by Jefferies Randall & Dewey of Houston, Texas.

Chesapeake Energy Corporation is the largest producer of natural gas in the U.S. Headquartered in Oklahoma City, the company’s operations are focused on exploratory and developmental drilling and corporate and property acquisitions in the Fort Worth Barnett Shale, Fayetteville Shale, Haynesville Shale, Mid-Continent, Appalachian Basin, Permian Basin, Delaware Basin, South Texas, Texas Gulf Coast and Ark-La-Tex regions of the United States. Further information is available at www.chk.com.

This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Chesapeake believes that its expectation to close the Marcellus Shale joint venture and international strategic alliance and to execute its development plan as described is based on reasonable assumptions. No assurance, however, can be given that such expectation will prove to have been correct. See “Risk Factors” in the company’s 2007 Annual Report on Form 10-K and Quarterly Report on Form 10-Q for the 2008 third quarter and other filings with the Securities and Exchange Commission for a discussion of risk factors that affect its business and could affect the referenced joint venture and strategic alliance. Chesapeake undertakes no obligation to publicly update or revise any forward-looking statements.

CONTACT: Chesapeake Energy Corporation
Jeffrey L. Mobley, CFA, 405-767-4763
Senior Vice President -
Investor Relations and Research
jeff.mobley@chk.com
or
Marc Rowland, 405-879-9232
Executive Vice President
and Chief Financial Officer
marc.rowland@chk.com
SOURCE: Chesapeake Energy Corporation

Sold! $50 Million of Recreational Land at Midwest Auction

Eric OKeefe — Mon, 17 Nov 2008 07:00:52 +0000

These days investing in the stock market is not for the faint of heart, and in markets from coast to coast thousands of developer-owned condos now sit vacant. But when it comes to land, there’s no shortage of motivated buyers. That’s the takeaway from a three-day auction of hunting and recreational tracts that grossed more than $50 million earlier this month.

“The first two days were standing room only. Small buyers emerged as winners,” said R.D. Schrader of auctioneer Woltz & Schrader, who added, “the prices met and exceeded our expectations.” In the first day’s auction, which took place in French Lick, Indiana, 9,426 acres sold for $15.78 million ($1,674 per acre) to 72 different buyers. The second day’s auction took place in Brandenberg, Kentucky. A total of 5,994 acres sold for $10.243 million ($1,708 per acre) to 15 buyers. A superior hunting tract in Union and Crittenden counties in Western Kentucky was the sole lot on day three. The 11,776-acre Sturgis property sold to a North Carolina TIMO for $24.583 million ($2,087 per acre).

The auction featured undeveloped land holdings and timberland in Indiana and Kentucky belonging to Kimball International (NASDAQ: KBALB), a furniture and electronics manufacturer. Kimball began acquiring properties in 1963 as a strategic reserve of its primary raw material: wood. Earlier this year the company’s board of directors recognized the assets as non-essential, and hired Woltz & Schrader to administer the sale.

“We had strong turnouts of more than 200 bidders every day with a few bidders seeking large combinations of acreage and a lot of smaller bidders interested in smaller amounts of land for hunting or personal use,” said company president Rex Schrader.

Top Ethanol Producer Files For Bankruptcy

Eric OKeefe — Fri, 07 Nov 2008 12:00:23 +0000

One of the leading stories of 2008 has been skyrocketing commodity prices and the corresponding surge in land values throughout the Midwest, Great Plains, Southwest, and other mineral-rich areas of the country. Although the bubble has by no means burst, there are definitely signs of a slowdown, particularly given the recent bankruptcy filing by one of the nation’s largest ethanol producers, VeraSun Energy Corp.

VeraSun went public in 2006 just as interest in alternative energies was peaking. But as these stories in The New York Times and The Wall Street Journal indicate, since then it’s been all downhill for the South Dakota-based company, which was trading at 48 cents a share, well of its 52-week-high of $17.75.

Who says Wall Street is the only place where people are making bad bets?

CAT Makes It 300 in a Row

Eric OKeefe — Tue, 21 Oct 2008 11:00:25 +0000

In the midst of a mounting avalanche of bad economic news, I thought it worth singling out one company with strong ties to the land that continues to shine. Earlier this month, Caterpillar announced that it was paying a quarterly dividend for the 300th consecutive quarter. Keep in mind that 300 quarters = 75 years in a row. Here is the announcement from the corporate website.

PEORIA, IL – The Board of Directors of Caterpillar Inc. (NYSE: CAT) today declared a quarterly cash dividend of forty-two ($0.42) cents per share of common stock, payable November 20, 2008, to stockholders of record at the close of business October 20, 2008. With this announcement, Caterpillar has completed its 75th year—300 consecutive quarters—of paying dividends to stockholders.

“Since paying that first dividend three-quarters of a century ago in the midst of the great depression, Caterpillar has faced many challenging economic circumstances including those facing the global economy today,” said Caterpillar Chairman and Chief Executive Officer Jim Owens. “Based on Caterpillar’s long-standing and conservative management philosophy, the company weathered those turbulent economic and financial conditions making dividend payments to our stockholders every quarter starting in 1933. Moving forward, Caterpillar is better positioned than ever before to build on this track record as we continue deploying our global business model to create value for our customers while rewarding our stockholders,” Owens added.

The $0.42 dividend maintains the dividend rate from the previous quarter and is 17 percent higher than the dividend paid one year ago. Including the announcement today, Caterpillar’s cash dividend has nearly tripled since 1998.

About Caterpillar:
For more than 80 years, Caterpillar Inc. has been making progress possible and driving positive and sustainable change on every continent. With 2007 sales and revenues of $44.958 billion, Caterpillar is the world’s leading manufacturer of construction and mining equipment, diesel and natural gas engines and industrial gas turbines. The company also is a leading services provider through Caterpillar Financial Services, Caterpillar Remanufacturing Services, Caterpillar Logistics Services and Progress Rail Services. More information is available at: http://www.cat.com/.