Barnett Shale

Chesapeake postpones 8th Avenue drilling permit hearing

Chesapeake Energy today asked the city of Fort Worth to postpone a scheduled hearing next week on its request for a drilling permit at the controversial Eighth Avenue site near the Berkeley and Ryan Place neighborhoods. The move came after an hours-long meeting Monday afternoon with representatives of the two affected neighborhoods as well as surrounding neighborhoods and Councilman Joel Burns, who represents the near South Side area. Also present was a representative of William Davis, who owns the proposed drill site, and of urban planning firm Gideon Toal.

Tom Edwards, a gas well inspector for the city, said Chesapeake “just asked us to postpone the hearing. They’re not pulling their request for a permit.” He said Chesapeake did not indicate when it might seek another hearing.

A Chesapeake representative was not immediately available for comment. Because Chesapeake does not have waivers from property owners within the city's 600-foot buffer zone, City Council must approve the company’s drilling permit before it can be issued. A hearing on the permit had been set for July 8.

-- Jim Fuquay

Chesapeake seeks council waiver for 8th Ave site

We did a story last month on Chesapeake Energy receiving a drilling permit from the Texas Railroad Commission for a controversial site just west of 8th Avenue near the Elizabeth Boulevard train yard.

The drilling company is now asking the Fort Worth city council for a waiver on the south Fort Worth site, which sits within the city's 600-foot minimum distance from any inhabitable structures.

Here's what Liane Janovsky is saying in a mass e-mail to fellow neigbors:

On Thursday June 5th, Chesapeake submitted its high-impact well application, seeking a waiver to permit drilling at the 8th Avenue and Elizabeth Blvd. train yard.  The site is called the “Railroad Lease.”  The hearing is preliminarily set for July 8, 2008.  Fort Worth & Western Railroad has submitted a letter of support for the waiver application.

We have to start marshalling our forces NOW to defeat the variance waiver request.  I am therefore asking that you do the following:

1) Attend the Gas Drilling Taskforce Public Hearing on Monday June 9th and make your opposition known by your attendance;

2) Send a letter ASAP to each member of the City Council, voicing your opposition to the waiver request;

3) Come to the July 8, 2008 city council meeting / hearing at 7:00PM; City Hall, 1000 Throckmorton St., and let the Council know how united we are in our                  opposition to the drill site.  Without 100 (or more) people in the Council Chamber, we won’t be able to make an impact.

We'll have more on all this in Saturday's Star-Telegram.

--David Wethe

Burns says Chesapeake going for Eighth Avenue site

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City Council member Joel Burns told Star-Telegram reporter Anthony Spangler Thursday that Chesapeake Energy is working to drill a well on the Eighth Avenue site south of Windsor Avenue, between the Ryan Place and Berkeley neighborhoods.

"The tack they have adopted is to get waivers from the affected parties," Burns said. "They have hired leasing specialists to go into the neighborhoods and contact the affected property owners in person. I don’t know if they are offering any incentives."

Burns said Chesapeake is "contractually obligated" to pursue putting a well on the site to access the minerals under the Paschal High School neighborhood and the Baylor All Saints Hospital property.

Burns said Berkeley and Ryan Place are majority leased by XTO, which plans a drill site off Main Street in an industrial area.

"I am relieved that in order for Chesapeake to move forward they have to get 100 percent participation from those affected parties," Burns said. "I feel pretty good about the property owner being able to be heard in a public forum."

Below is a letter from the president of the Berkeley neighborhood association:

-- Richard Stubbe

Moncrief touts neighborhood gas deals in address

In his fifth State of the City Address Wednesday, Fort Worth Mayor Mike Moncrief cited gas lease deals struck last summer and fall by several Fort Worth South Side neighborhoods as agreements that work for neighborhoods and gas companies.

"There are model agreements that not only focused on the financials, but also on the placement and operation of wells," Moncrief said. "Any neighborhood approached with leasing proposals should have the very same opportunities to strike such a compromise -- any neighborhood!"

Here's the full text of Moncrief's speech, and here's staffer Mike Lee's story about the speech.

Click here to view the lease forms negotiated by Fort Worth's Ryan Place, Berkeley Place, Mistletoe Heights, and Tanglewood neighborhoods.

Click here to visit the city of Fort Worth's gas drilling web page, including a copy of the city's drilling ordinance.

-- Scott Nishimura

Fairmount (FW) holdouts get their reward

The few holdouts in Fairmount (FW) Southside Historic District are about to get rewarded, if they're not holding out on principle.

The neighborhood is getting the word out to what it estimates to be the "100-plus" property owners out of 1,300 who haven't signed leases yet. The association doesn't have an iron-clad hold on who's signed; it put out signs asking the holdouts to respond, and more than 100 did.

Fairmount was able to foment competition, drawing XTO Energy (with Fort Worth Energy as its agent) into a negotiation for leases that Chesapeake Energy didn't sign up with its own offer.

The Fort Worth Energy/XTO offer, supported by the neighborhood association as "less disruptive and more financially rewarding:"  $15,000-per-acre signing bonus, with lot calculations to the middle of streets and alleys; 25 percent royalty minus taxes, but with no reduction for production, gathering, transportation, processing or marketing costs; 48-month term; and a $10,000 donation to the neighborhood association for every 100 leases signed.

The environmental considerations were even more important to the neighborhood, said Patti Randle, the association's president. They include: no surface access operations, drill site at Jennings and Page, language that matches the city of Fort Worth's 600-foot minimum distance between the drill site and the nearest homes, no compressor within 1,000 feet of the Fairmount boundary, and no truck traffic within Fairmount.

"Our No. 1 issue was to have safety in the neighborhood," Randle said. XTO and Fort Worth Energy "were just really accomodating with all of it."

Like their South Side neighbors in Ryan Place, Berkeley Place, and Mistletoe Heights, which negotiated similiar agreements with Fort Worth Energy/XTO, the Fairmount association did not want a potential drill site on 8th Avenue, which Chesapeake proposes.

Fairmount was unlike those three associations in that a large number of its property owners -- led by the high numbers of landlords in the neighborhood -- signed leases before the association was able to organize.

XTO's proposed bonus stood at $10,000 as recently as October, but the company raised that to $15,000 within the last few weeks, Randle said.

David Thrapp, head of Fairmount's gas committee, said a joint South Side committee that negotiated a template agreement with Fort Worth Energy/XTO was a huge help.

"I hope we protected Fairmount," he said. "That was the whole purpose."

-- Scott

(S-T photos: Fairmount home, playing in the rain at Fairmount Park)

New resource for neighborhoods: Lease forms

Here's a resource for neighborhoods that are considering trying to negotiate with gas drilling companies: lease forms negotiated by the Berkeley Place, Ryan Place, Mistletoe Heights and Tanglewood neighborhood associations in Fort Worth. Those neighborhoods are among the first to successfully negotiate leases with drilling companies.

The Berkeley Place/Ryan Place lease and the Mistletoe Heights lease, both with Fort Worth Energy, include minimum equipment spacing requirements as part of the lease, exclude various surface uses of leased property, and dictate what other company the lease may be assigned to.

Berkeley Place/Ryan Place: Download berkeley_ryan_place_leasefinal_2.doc

Mistletoe Heights: Download mh_lease.doc

The Tanglewood Neighborhood Association lease with XTO Energy includes favorable language regarding the exclusion of various costs from the royalty payment.

Tanglewood: Download tanglewood_lease.pdf

For contact info on these neighborhoods and others in Fort Worth, click here.

-- Jim

What to do with $75 grand?

In the tussle for leases on the Fort Worth South Side, Fort Worth Energy/XTO and Chesapeake are both offering to donate up to $75,000 to the Ryan Place, Berkeley Place and Mistletoe Heights associations, based on the number of leases signed.

This largesse, of course, hasn't escaped the notice of other neighborhood associations. The Fort Worth League of Neighborhood Associations worked it into its extended tip sheet to neighborhood associiatons at this week's gas drilling "education event." "You can negotiate for donations," James Huling, a Mistletoe Heights petroleum engineer, said in his presentation. "Use this as an opportunity to enhance the quality of life in your neighborhood."

This raises the welcome challenge of figuring out what to do with that money if it comes along. The Friends of Tillery Park, a non-profit, built a $175,000 playground on the South Side a week ago, using $50,000 donated by Fort Worth Energy and XTO and another $10,000 from Chesapeake.

Mary Dulle, the Berkeley Place Neighborhood Association president, notes that her association's annual budget is just $5,000-$8,000 annually. Presented with a huge chunk of donated change, she isn't sure what Berkeley would do with it. The "gates" at Forest Park Boulevard and Park Place, a local landmark, need refurbishing. That's one idea.

"I don't know what we're going to do with it, but if we get it, we'll figure out what to do with it," she said.

UPDATE: Click here to read the full story on the Berkeley/Ryan Place/Mistletoe Heights lease deal.

-- Scott

Chesapeake's FW S. Side lease matches XTO on lot measurements

Chesapeake Energy, in the continuing contest for Fort Worth South Side leases, is not only matching the Fort Worth Energy/XTO $15,000 bonus offer (see Thursday's blog posts), it's also matching the way Fort Worth Energy and XTO calculate lot sizes.

Fort Worth Energy and XTO are calculating lot sizes into the middle of streets and alleys, and Chesapeake will do the same, the letter, signed by Vice President Julie Wilson, says.

Chesapeake also maintained in the letter that its setback distance for compressors "is still 1,000 feet from the neighborhood." It also reminded property owners that any well within 600 feet of a house or other similiar structure would require a high impact permit from the city. Chesapeake's lease offer includes standard language maintaining a minimum 200-foot distance between the well and "any house or barn," which the South Side neighborhood associations have taken issue with. In agreements negotiated with the neighborhood associations, Fort Worth Energy/XTO agreed to include language barring wells within a 600-foot radius.

-- Scott

Chesapeake says no compressor on Mistletoe Blvd.

At an Oct. 22 meeting, Councilwomen Wendy Davis told attendees that Chesapeake Energy had purchased property on the eastern edge of Mistletoe Heights (map). At least one person interpreted that as meaning Chesapeake would put a compressor station at the site.

Here is Chesapeake spokeswoman Julie Wilson's reply to Blogging the Barnett Shale's inquiry regarding the property:

Thanks for asking us about this and allowing us to clarify the misinformation. We have no plans to put a compressor station anywhere near Mistletoe Heights.

That area will have a 24" pipeline that will only require compression on the two ends (near the Mercado [Juarez drill site, currently under construction and visible just west of I-35W just north of downtown Fort Worth - ed.] and south of I-20).

We did purchase one house on Rosedale -- some distance from Mistletoe Heights -- simply for use of the backyard as temporary workspace. When we are finished with this workspace, the house will come back on the market unscathed. We are looking for some additional temporary workspace (to store equipment, basically) near Mistletoe and Jerome, either to rent or purchase, and the same return-to-market would be true later. We have no plans to demolish any homes in the Mistletoe area. And again, we will not be building a compressor station in this area.

-- Jim

XTO/FW Energy to give $15k bonus to earlier signees

Lease offers to Fort Worth South Siders went from bonus offers of $10,000 to $15,000 in a flash. Fort Worth Energy, which is signing leases on behalf of XTO Energy, says it will give the higher bonus to people who signed up when the offer was still $10,000, Mary Dulle, president of the Berkeley Place Neighborhood Association says.

-- Scott