Barnett Shale

Railroad Commission ruling forces unleased land owners into drilling unit

The Texas Railroad Commission has issued a ruling allowing more than two dozen east Fort Worth landowners who didn’t sign a mineral rights lease to be forcibly included in a drilling plan, a move that gives producers added leverage against leasing holdouts. It is the first time the commission, which regulates the oil and gas industry in the state, has used a 1965 law to take such action, called a force pooling, against small land owners. Experts said the ruling is particularly applicable in urban areas, where hundreds of small tracts often must be assembled, or pooled, into a drilling unit. Jacqueline Weaver, a University of Houston law professor who has written extensively on Texas oil and gas law, said the issues involved are important enough that they likely will have to be resolved by state courts. Historically, she said, the Mineral Interest Pooling Act has been used to protect small land owners from getting squeezed out of drilling units, rather than forced into one.

“It sets a precedent,” Weaver said of the August ruling. “Horizontal drilling is going gangbusters in the Barnett Shale, and other producers will have the same difficulties.” To see the Railroad Commission examiner's original ruling, the revised ruling and the final order, click here and then click on the third item from the bottom, titled "Application of Finley Resources, Inc. ..."

See the full report from the Friday Star-Telegram here.

-- Jim Fuquay

Lease slowdown hits home

Some of the biggest producers and most active leasing companies in the Barnett Shale brought their leasing activities to a screeching halt this week, disappointing unsigned property owners and perhaps changing the market price of signing bonuses in the play for good. Among the disappointed landowners is Rorie Cowden, whose Hidden Valley miniature golf course on 5.5 acres bordering Jacksboro Highway is part of a Lake Worth negotiating group that signed the richest reported lease in the county: a $30,000-an-acre offer from Chesapeake.

"I was waiting for them to send me my lease packet," Cowden said Thursday, but he got nervous when he heard producers were cutting back. When he walked into the Vance Godbey’s restaurant, where signings were under way, he was told that the new bonus figure was $5,000. The difference: $137,500. "I did not sign," he said. "I never thought it would hit like this. The bubble has burst."

See the Star-Telegram's full report here.

-- Jim Fuquay

Dale offers $25,000/acre to River Oaks group

River Oaks Area Gas Leasing Group, which says it represents about 160 properties covering 70 acres, reports an offer from Dale Resources, on behalf of Chesapeake Energy, of $25,000 a year, 25 percent royalty and three-year term. Organizer Steve Holland reports that the organization is considering the offer and is "working on a lease agreement that would reflect these terms." The group has members in River Oaks, Westworth Village, Samson Park and  the 76114 zip code area of Fort Worth. The area has previously been heavily leased, Holland says, but the group has steadily grown its membership. For more information, contact Holland at steve.holland@charter.net. For our previous coverage of this group, click here.

-- Jim Fuquay

North Hills group sets meeting

North Hills Mineral Owners Coalition plans a July 17 meeting at 7 p.m. at Richland Hills United Methodist Church, 7301 Glenview Drive. The group has been working since May, and over 300 people attended a June meeting. Yard signs with the group's logo will be sold for $5. Organizers report meeting with another neighborhood  group from around the Iron Horse golf course, which separately conferred with landmen with Dale Resources on behalf of Chesapeake Energy and Holland Acquisitions on behalf of XTO Energy. The group notes that the city of North Richland Hills in June  leased two parks to Harding Co. for $20,000 an acre (up from $2,500 three years earlier.)

-- Jim Fuquay

Haltom City group inks for more than $20,000

A group of about 900 property owners in Haltom City agreed to a natural-gas deal with Dale Resources that will pay them a signing bonus of $20,050 per acre.

The Haltom City Joint Neighborhood Committee, which represents about 350 to 400 acres, agreed to the lease with Dale, representing Chesapeake Energy, on Friday. The three-year lease will pay a royalty of 25 percent and has the option for an additional two years with another signing bonus of $15,000.

Checks will be cut at the time of leasing signing, which will be held Wednesday through Friday at the Haltom City Recreation Center.

The group had been working on a deal with Dale since January, but the offers didn’t start going up noticeably until XTO Energy started competing in the area about four weeks ago, said Sandra Tork, one of the group’s organizers. The group could have pushed for more money, but found it difficult keeping everyone together, she said.

“Our chickens and our cats started scattering, so we thought we better get this closed,” Tork said. “It gets to be a little nerve frazzling after a while.”

Here's our print story on the deal.

--David Wethe

$25,500 deal reached with Turf Green United (SW Arl)

The group in Southwest Arlington known as Turf Green United says on its website that it has reached a deal with a relatively new drilling company Titan Resources and its land affiliate The Caffey Group.

The terms of the deal are:

• $25,500 per-acre bonus
• 25 percent royalty
• Initial three-year term with an option for another two years and another $25,500 bonus

Competition helped drive up the price. We last told you in late February about a $17,000-per acre signing bonus and a 25 percent royalty offered by Carrizo Oil & Gas. The group also reports on its website that it received an offer of $25,000 per acre from Dale Resources, representing Chesapeake Energy.

The group, which posted the deal agreement last night, also announced signing dates at The Church on Rush Creek, at 2350 SW Green Oaks Blvd., in Arlington.

They are:

• Tuesday, June 10, 4 p.m. - 9 p.m.
• Thursday, June 12, 4 p.m. - 9 p.m.
• Saturday, June 14, 10 a.m. - 4 p.m.
• Tuesday, June 17, 4 p.m. - 9 p.m.
• Thursday, June 19, 4 p.m. - 9 p.m.
• Saturday, June 21, 10 a.m. - 4 p.m.

When you go to sign, you'll need to bring a picture ID, and all parties that own the property must sign the lease, the group's Website said.

The group is also expressing frustration that officials for Dale Resources is going around the neighborhood, posting flyers on people's doors.

"The lease they are offering is not a Turf Green United approved lease. This a common tactic used by this company to cause signing date confusion within a united neighborhood. These types of dishonorable tactics are unwelcome and speak loudly on the way Dale conducts business."

Click here for the Website for Turf Green United, formerly known as Sterling Green Addition.

Click here to see what we've said about this group before.

--David Wethe

River Oaks group forms west of Fort Worth

A group of residents have formed in the town of River Oaks, which is inside Loop 820 northwest of Fort Worth.

The group is calling itself the River Oaks Leasing Association.

It's fairly small now, consisting of 15 properties that make up between 8 and 9 acres. But more is being added each day, said Steve Holland, a spokesman for the group.

The group began about a week ago and plans to hold a meeting in the next two weeks, Holland said.

If you have questions, you can contact Holland at: (817) 874-7461, or e-mail him at steve.holland@charter.net.

The group as a whole has not received anything from drilling companies, but individual property owners have received offers. The latest is from Dale Resources, representing Chesapeake Energy, for a per-acre bonus of $7,500 and a 25 percent royalty. Holland said he expect the offers to be "much better" as the group grows.

--David Wethe

More Southlake rivalry between Chesapeake and XTO

Just when you thought the competition between Chesapeake Energy and XTO Energy couldn't get any hotter, it takes a new turn.

This time it's in Southlake and involves the Carroll Independent School District.

Fort Worth-based XTO has donated $50,000 to the Carroll Education Foundation, according to our education reporter Jessamy Brown. And it's the largest donation in the history of the 12-year-old organization, Brown discovered.

To make things more interesting, XTO rival Chesapeake has the lease to drill for natural gas under all 402 acres owned by the Carroll school district.

The foundation is a non-profit set up to raise money and donate it to the Carroll school district when needed.

The donation, which was made earlier this week without any fanfair, will make XTO the "presenting sponsor" of the foundation's annual fundraiser later this year, called the Culinary Celebration.

"We have never been gifted this much," Kacy Hankins, the foundation's executive director, told Brown today. "It was not solicited."

For further background, keep in mind that Chesapeake recently announced that it would donate $1 million to the United Way to establish the Barnett Shale Endowment Fund. That same day, the YMCA rushed out a press release saying that XTO was donating $500,000 to help modernize and expand its workout space.

And for one more layer of intrigue, both companies are heavily competing for the hearts and minds of property owners in Southlake and Colleyville and elsewhere in Northeast Tarrant County. Chesapeake, through its land representative Dale Resources, offered thousands of property owners in Northeast Tarrant a bonus of $17,000. XTO, through its rep Colt Exploration, quickly topped that with an offer for $18,500 per acre.

--David Wethe

Catching up with East Trinity Mineral Leasing Committee (Euless)

The East Trinity Mineral Leasing Committee is well on its way to getting its members signed up for the lease it agreed to last month.

The Euless group, which consists of the Stone Hollow Addition and the Park Hollow Addition subdivisions, is recommending that its members sign the offer from Cheaha Land Services, which is representing Carrizo Oil & Gas.

The lease includes a $19,000 per-acre signing bonus, a 25.5 percent royalty and an initial three year term with an option to re-sign for another two years at $12,667 per acre.

Dale Property Services later sent competing offers of $17,000 an acre, a 25 percent royalty, a two-year primary term and a two-year option.

The Euless group has already held four signing meetings and two more are planned. They are:

• Sat., May 10
• Sat., May 17

Both meetings are from 9 a.m. to 4 p.m., at the Airport Freeway Church of Christ. That's at 210 Airport Freeway in Euless.

--David Wethe

Another Southlake group emerges

The Dove Area Gas Group, in Southlake, has popped up on our radar, and it plans to hold a meeting tomorrow with presentations by XTO Energy and Chesapeake Energy.

The meeting will be held from 7 p.m. to 9 p.m. at the Johnson Elementary auditorium.

According to the DAGG website, "everyone is welcome to attend." The group says new members can turn in their non-binding letters of intent at the meeting.

Here are the neighborhoods and subdivisions that make up DAGG, according to its site:

• Carmel Bay
• Carroll Meadows
• Dove Estates
• Emerald Estates
• Harbor Oaks
• Huntwick
• Lakes on Dove
• Lakeside Estates
• Loch Meadow
• Lonesome Dove Estates
• The Madison
• Oak Pointe
• Quail Creek
• South Lake Park
• Trail Lake

The group's site also reports that property owners in Lonesome Dove Estates have been offered a bonus of $17,000-per-acre. It's unclear who made the offer, but Dale Resources, on behalf of Chesapeake Energy, made that kind of an offer to a large group of property owners representing about 5,000 acres southwest of 114 in primarily Southlake and Colleyville.

DAGG, which says its mission is to represent more than 800 homeowners, lists its boundaries as:

• White Chapel Boulevard on the west
• Dove Road on the south
• Kimball on the east
• Grapevine Lake on the north

More to come as we hear about it.

--David Wethe