The City Council is likely to toss out the bids for natural gas leases on three tracts of city property because the bonuses that the city was offered were too low.
The bids were for a water pump station on Alta Mesa Boulevard, a police station on Nashville and Rosedale Plaza park. The city only got an offer from one company -- Chesapeake Energy -- on each tract. Chesapeake offered a bonus of 2,500 an acre for the park and the pump station, which total about 35 acres, and $10,000 an acre for the 2.4-acre police station. Chesapeake offered 25 percent royalties on all three tracts.
"We will selectively lease property when it makes sense and we believe we can get a fair offer," Planning and Development Director Susan Alanis said via e-mail. "In some cases we will wait to lease when the market recovers."
This is going to be an important issue to watch. Fort Worth has about 12,000 acres of parks, airports, water plants and other city buildings. The city expects to earn a little more than $1 billion over 20 years from bonuses and royalties. But a lot of observers say the city will have to be disciplined and avoid leasing during downturns in the oil and gas business.
-- Mike Lee
HOLD OUT GET LEFT OUT, even the Great City of Fort Worth, Texas, it is what it is
Posted by: DRILL BIT | January 27, 2009 at 09:26 AM