LandReport.com » Northeast

Northeastern Landowners Get $165M For Natural Gas Rights

Eric OKeefe — Thu, 15 Oct 2009 15:57:44 +0000

A coalition of landowners in one of the country’s emerging natural gas hot spots has reached an agreement to lease 30,000 acres to Fortuna Energy for natural gas drilling rights. The $165-million, five-year deal for Marcellus Shale drilling rights comes out to $5,500 per acre, plus royalties.

The Friendsville Group is made up of 600 property owners in Susquehanna and Bradford counties in Pennsylvania, and in Broome County, New York. Individual owners will have the option to extend the lease for another three years, making it a “one-size-fits-all” deal, according to Pat Flaherty, who helped negotiate the deal.

Other perks to landowners were included in the deal, including approval of developmental plans and retaining rights to other minerals on the property.

“It’s by far the best offer we’ve seen,” said Larry Barrack, a Pennsylvania property owner who spoke with Gannett reporter George Basler.

Fortuna , a subsidiary of Calgary-based Talisman Energy, is one of North America’s largest independent producers with more than 22,000 oil and gas leases.

Landowners in Pennsylvania can expect payment within 90 days of signing the agreement, Fortuna officials said. Given the current moratorium on oil-and-gas drilling in New York, the Broome County leases – primarily in Binghamton and Vestal – will be structured differently, giving landowners $500 per acre when the lease is signed and the remaining $5,000 per acre once the moratorium is lifted. The New York Department of Environmental Conservation (DEC) plans to release results from an environmental impact report this fall.

Western Massachusetts to Become National Forest?

Eric OKeefe — Wed, 17 Jun 2009 07:00:22 +0000

Former Governor Mitt Romney’s proposal to designate the Berkshires and all of Western Massachusetts as national forest is being considered once again. Massachusetts is one of just six states without national forest designation, a situation the Romney administration sought to counter in 2003.

A key aspect of the proposal being considered is that the federal government would not acquire any private land. Instead, it would seek easements from local property owners to restrict development and thus allow the land to remain on tax rolls.

The proposed Massachusetts model, which is being called a “family-forest based” designation, is being pitched as a partnership between private landowners, the state, and the federal government.

“”Landowners would retain the rights to own the lands, but sell their right to develop it,” said Lisa Capone of the state’s Executive Office of Energy and Environmental Affairs. “The land also remains a working forest, with some level of access to outdoor recreation and protection from commercial development. Massachusetts would be the first state to have the land-easement concept.”

Foreign Investors Own Major Stake in Maine

Eric OKeefe — Thu, 28 May 2009 13:00:09 +0000

Foreign investors own an interest in 21.2 million acres of U.S. forest and farmland, an amount that equates to just under 1 percent of all the land in the U.S. Every one of the 50 states as well as Puerto Rico has foreign ownership, but far and away the largest concentration was in Maine with 3,323,846 acres (16 percent of the national total). Forest and timberland accounted for more than 3 million of those acres with Canadian companies the leading landowners.

The figures were compiled by the Farm Service Agency from filings required by the Agricultural Foreign Investment Disclosure Act of 1978 and are available in this handy 178-page report.

Danish Pension Fund Buys 90,000+ Acres in New York

Eric OKeefe — Wed, 01 Apr 2009 19:00:12 +0000

Published reports indicate that the Adirondack Chapter of the Nature Conservancy has sold 90,593+ acres of the former Finch Paper holdings to a subsidiary of the Danish pension fund ATP. The sale to ATP was handled on a sealed bid basis by LandVest. The acreage will be managed by RMK Timberland Group, a business unit partner of Regions Morgan Keegan Trust and Morgan Asset Management, and is subject to both a fiber supply agreement with the current owners of the Finch Pruyn mill and a conservation easement.

The Land Report reported on the original sale in the August 2007 issue (see below) and the estimated sales price per acre in 2007 was $683 per acre. According to the Timberland Blog, the 2009 purchase price was 180 million Kroners, which comes to about $361 per acre or almost 50 percent less than The Nature Conservancy paid two years ago primarily because of the conservation easement.

CNL Acquires Jiminy Peak

Eric OKeefe — Tue, 10 Feb 2009 04:54:56 +0000

Two months ago, CNL Lifestyle Properties snapped up Crested Butte, Okemo, and Sunapee for $132 million. Now the Florida-based real estate investment trust has acquired another ski resort, spending $27 million for Jiminy Peak. Here’s the press release:

CNL LIFESTYLE PROPERTIES ADDS
JIMINY PEAK MOUNTAIN RESORT
TO SKI MOUNTAIN PORTFOLIO

(ORLANDO, Fla.) Jan. 28, 2009 – CNL Lifestyle Properties, Inc., a real estate investment trust (REIT) focused on lifestyle properties, announced today its acquisition of Jiminy Peak Mountain Resort, the largest ski and snowboard destination in southern New England. CNL Lifestyle Properties is purchasing the Hancock, Mass. property from Jiminy Peak Mountain Resort, Inc., for $27 million including all of the resort’s fixed assets. Jiminy Peak Mountain Resort, LLC, will continue to operate the resort under a 40- year lease including all renewals with CNL Lifestyle Properties.

Established in 1948, Jiminy Peak hosts more than 350,000 skiing, lodging, conference, wedding and mountain adventure park guests annually. In 2007, Ski Magazine ranked Jiminy Peak among the top five family resorts in North America. It is the only mountain resort in North America that generates 25 percent of its total energy needs using wind power, including about half the power used to run the snowmaking machines and chairlifts.

Jiminy Peak Mountain Resort, LLC, owned by Brian and Tyler Fairbank and Joseph O’Donnell is managed by Brian Fairbank, who has shepherded the mountain’s growth over the past four decades and will continue to be active in the day-to-day management of the property.

“As Jiminy Peak celebrates its 60th ski season this winter, we are pleased to add this family-favorite mountain resort to our portfolio,” said Byron Carlock, president and CEO of CNL Lifestyle Properties, Inc. “As this year’s record number of nearly 71,000 skier visits thus far demonstrates, Brian Fairbank has done an admirable job creating an award-winning destination. We are pleased to support Brian and Jiminy Peak Mountain Resort, LLC, in their ongoing management of the mountain resort.”

Land Report 100er No. 87 Takes the Chair at The Nature Conservancy

Eric OKeefe — Tue, 30 Dec 2008 07:00:21 +0000

Roger Milliken Jr., president and CEO of Maine’s Baskahegan Co., was named chairman of the board of The Nature Conservancy, one of the world’s largest conservation organizations. The announcement was made earlier this month. Milliken, whose family’s company owns more than 100,000 acres of Maine timberland through Baskahegan and ranks No. 87 on the 2008 Land Report 100, has been a member of The Nature Conservancy board since 2000 and a member of the Maine chapter’s board of trustees for more than 10 years. He succeeds John Morgridge, former CEO of Cisco Systems. The complete press release from organization follows:

ARLINGTON, VA — December 1, 2008 — Today, The Nature Conservancy announced that Roger Milliken, Jr., President and CEO of the Baskahegan Company, was named chairman of the global conservation organization’s Board of Directors.

Milliken has been a member of the Conservancy’s Board since 2000 and a member of the Maine chapter’s board of trustees for more than 10 years. Milliken succeeds John Morgridge, former President and CEO of Cisco Systems, Inc., who completed his term as chair in October.

“I’m thrilled to be taking the helm at such a critical time in the Conservancy’s history,” said Milliken. “With the Conservancy’s global perspective and local presence in 50 states and more than 30 countries, the organization is well positioned to tackle global threats like climate change, and help protect the natural systems around the world that sustain all life. I look forward to working in this new role with the board and staff of the Conservancy and our many partners and supporters to help build a sustainable planet.”

“Given his passion for conservation, his depth of knowledge and drive for action, Roger will be an outstanding board chairman,” said Mark Tercek, President and CEO of The Nature Conservancy. “I look forward to working with Roger in his new role.”

“Through his leadership and involvement with the Conservancy in Maine over the last ten years, he has made a significant mark on lands and waters right here at home,” said Mike Tetreault, director of The Nature Conservancy’s Maine Chapter.

In 1983, Milliken joined the Baskahegan Company, a recognized leader in Maine’s forest products industry, and became president in 1989. Known for its commitment to managing for timber while respecting the dynamics of natural systems, Baskahegan owns and manages more than 100,000 acres of forestland in eastern Maine, and has been certified as Well-Managed by the Forest Stewardship Council since 2004.

In addition to his work with the Conservancy, Milliken chairs the Advisory Board of the Manomet Forest Conservation Program and is an advisor to the Open Space Institute’s Northern Forest Protection Fund. He is a former president of the Maine Forest Products Council, and served on the board of the Land for Maine’s Future program for nine years. He is a Director of Pacolet Milliken Enterprises, a private company focusing on sustainable investment opportunities in the real estate, energy and natural resource sectors.

CNL Lifestyle Properties to Pay $132 Million for Crested Butte, Okemo, and Mount Sunapee

Eric OKeefe — Fri, 05 Dec 2008 14:36:00 +0000

CNL Lifestyle Properties, an Orlando-based real-estate investment trust (REIT) will announce today that it is acquiring Crested Butte Ski Resort in Colorado (pictured), Okemo Mountain Resort in Vermont, and Mount Sunapee Ski Resport in New Hampshire from Triple Peaks LLC of Ludlow, Vermont. According to The Wall Street Journal, CNL will pay $132 million for the three ski areas, which Triple Peaks will continue to operate.

According to its website, CNL Lifestyle Properties invests in income-producing properties with a focus on lifestyle-related industries. The company acquires properties and leases them primarily on a long-term, triple-net basis. CNL Lifestyle Properties intends to invest in properties with the potential for long-term revenue generation based on demographic trends, associated concentrations of wealth, and other proprietary underwriting models.

CNL Lifestyle Properties is one of the nation’s largest owners of golf properties with a golf portfolio comprised of 52 properties throughout the United States. In March 2008, the REIT announced the acquisition of three Virginia golf courses from Traditional Golf Properties. Two of the acquired golf courses, The Crossings located in Glen Allen, Va., and Kiskiack located in Williamsburg, Va., are semi-private courses. The third course, Broad Bay located in Virginia Beach, Va., is a private club.

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

Lowest Property Taxes in U.S.? Alabama

Eric OKeefe — Mon, 27 Oct 2008 12:15:52 +0000

Alabamans pay on average just $477 per person in property and real taxes. That’s one of the many conclusions of this 64-page background paper from the Washington-based Tax Foundation that was released earlier this month. But you already knew that because you read this post at LandReport.com on Alabama’s low tax rates several months ago. Guess which state finished at the bottom of the list?

Way to go New Jersey: $2,642 per capita. Here’s the rundown on the states with the five lowest and the five highest property tax rates:

Lowest Property Taxes:
1. Alabama ($477)
2. Arkansas ($527)
3. New Mexico ($539)
4. Oklahoma ($562)
5. Kentucky ($620)

Highest Property Taxes:
1. New Jersey ($2,642)
2. Connecticut ($2,393)
3. New Hampshire ($2,320)
4. Wyoming ($2,175)
5. New York ($2,124)

According to the report, “Property tax collections per capita are calculated by dividing property taxes collected in each state (obtained from the Census Bureau) by population.“ (page 37)

One other conclusion worth noting:

“Real and personal property taxes are a contentious subject at the state and local levels as individuals and businesses protest rising tax bills caused by revaluations of residential and business property. In fact, the Tax Foundation’s Survey of Tax Attitudes found that local property taxes are perceived as the second most unfair state or local tax.“ (page 35)

Oddly enough, the most unfair state or local tax was nowhere identified in the report.

The Great Plague Returns?

Eric OKeefe — Fri, 24 Oct 2008 07:00:05 +0000

Trees, leaves, and changing colors are one of the glorious rites of fall. Yet the more wild places I visit from coast to coast, the more it becomes apparent that it’s not crisp autumn nights that is coloring these trees and thousands more on millions of acres of land. It’s a blight with all sorts of scientific names that landowners simply refer to as ”beetle kill.”

One thing is for sure: beetle kill is devastating. Already it has cost landowners and the government millions (if not billions). Where is it? More and more places. In the Northeast, an alert Donna Massie noticed an odd looking insect on the trees in her backyard in Worcester. After doing her version of CSI Massachusetts and IDing the critter, she contacted local forestry officials. That particular version of beetle kill is being transmitted in the greater New England area by Asian longhorned beetles that arrived in Brooklyn in 1996, most likely in a packing crate from China. As you probably already have guessed, they have no known predator in the U.S. and no plans to return to China. Eradication efforts costing $250+ million have been implemented so far, and officials are doing their utmost to aid landowners in a multi state area, according to this AP report that was picked up by Fox News.

In the Rocky Mountains of Central Colorado, I’ve seen this catastrophe firsthand in Summit County’s Gore Range. According to this report in the Denver Post, almost all of the Centennial State’s mature lodgepole forest has been decmiated, a total of more than 1.5 million acres. And 33 percent of these losses – 500,000 acres of infestation – took place this very year.

Is there a way out? Yes. Unfortunately, it comes with a steep price tag. The only hope to end this scourge is that this winter, temperatures in these areas drop to about -40. That’s the sort of brutal cold required to kill these critters off.