Barnett Shale

Miller wary of drilling in Dallas

Former Dallas Mayor Laura Miller is not so keen on natural gas drilling coming to her city, even though she was a supporter of drilling at Dallas-Fort Worth Airport.

Miller told the Texas Tribune that she now has questions on the safety of natural gas drilling after reports of earthquakes in the Barnett Shale.

"I was gung-ho as member of the DFW Airport Board [about bringing drilling out there], because it was a great income stream, and both Dallas and Fort Worth got a piece of that. But as soon as I started reading about minor earthquakes in Tarrant County [because of Barnett Shale drilling], I thought, uh oh, this sounds like a problem. They’ve made the connection now between that and fracking. If I were back on the city council, I would be cautious and [would] want to know a lot more from the people doing the investigative work on what is happening in Tarrant County."

Researchers have argued that there may be a connection between recent small earthquakes that have been recorded in the region and natural gas drilling. Earlier this year, a team of researchers said an injection well used to get rid of wastewater from natural gas drilling was a "plausible cause" of a series of small  earthquakes at Dallas/Fort Worth Airport.

-Aman Batheja

Chesapeake sued by contractor over D/FW Airport lease

Chesapeake Energy has been sued in state district court in Dallas by a minority owned company claiming it was cut out of an earlier agreement as part of the drilling lease at Dallas/Fort Worth Airport. Click here for the full print story.

--David Wethe

Dale makes broad pitch for $17,000 in NE Tarrant

Dale Resources made an unusual and far-flung pitch last night to lease mineral rights for about 5,000 acres in Northeast Tarrant County.

The offer is for a bonus of $17,000 an acre and a 25 percent royalty. The lease term is for three years and an option for a two-year renewal.

The offer was made to a packed room full of about 40 community leaders from Colleyville, Southlake, and parts of North Richland Hills and Keller. As neighborhood group leaders and HOA presidents spilled out of the small conference room at the Southlake Hilton after the meeting, at least one expressed intrigue and possible interest in the offer.

Michael Muhm, leader of the Pool Road Coalition, called the offer "very interesting." He said XTO Energy has a competing offer out to property owners in his group's area for a bonus of roughly $12,500 an acre. But he said his group is looking at not only the best dollar amount but who would also be the best drilling company for property owners to partner with, and he said Chesapeake is looking strong.

Dale has also proposed 11 signing dates throughout the month of May in Colleyville.

Dale officials said the offer is good for anyone living in a large swath of northeast Tarrant, mainly southwest of 114. But the land company also did say that if there was not enough people that started signing, the offer could go down. A deadline date was not given for how long the offer would be good for.

Among the affected areas are the upscale, 1,100-acre Timarron community in Southlake, the Pool Road Coalition and the Colleyville Area Mineral Rights Association.

Stay tuned to this space for more updates, and to the S-T print edition Thursday for a full story. We're trying to get a handle on who was in the room Tuesday night, and how broad the area is that we're talking about.

If you were in the room and you have a perspective, we'd love to hear it. Just drop us an email at dwethe@star-telegram.com or call us!

-- David Wethe

(Photo: Southlake trolley)

Grapevine organizers move ahead

Organizers of DFW West Homeowners in Grapevine, a coalition of more than 20 neighborhoods west of Texas 121 and north of Hall Johnson, report they're moving ahead.

The group is broken down by subdivision, with one or two leaders per subdivision. DFW West says it has a group of seven "specialists" who work in the energy industry. It's up to each subdivision's leaders to organize their homeowners.

"We're just a few weeks away from negotiating," one of the group's leaders says.

He also says the group has spoken to organizers of a group of neighborhoods in Grapevine east of 121 that have organized and signed a letter of intent to be represented by two independent landmen. Chris Warton, a leader of that group, says both sides plan to meet soon.

The Grapevine neighborhoods and some in Euless, all just west of Dallas/Fort Worth Airport, have received lease offers from Cimmaron Field Services on behalf of Chesapeake Energy. Click here to read our previous posts on Grapevine and here to read our previous posts on Euless. The offers: $3,000-per-acre signing bonus, 20 percent royalty.

Other tidbits from DFW West:

• Cimmaron is telling neighborhood organizers it's sent out 5,000 lease packets to the area.
• Neighborhood organizers say they control about 2,000 lots and 400 acres.
• On its web site, DFW West lists more than 20 neighborhoods that it's working with. In addition to the neighborhoods that Blogging the Barnett Shale has already reported, DFW West's site lists the Stonewood, Creekwood West, Los Robles, Walker Farms Timberline East, High Point, and Parkwood neighborhoods west of 121 and north of Hall-Johnsonin Grapevine. DFW West's site also lists the Glade Crossing group and the Euless neighborhoods of Glade Manor, Quail Run Estates, and Quali Creek Estates east of 121 off of Glade Road.

DFW West organizers are telling property owners they want to:

• Limit the size of the pooling unit to ensure the highest possible royalty payments.
• Negotiate no warranty of title into the lease, providing protection in cases of disputes over ownership of mineral rights.
• Limit the lease term, possibly to three years. The offered term is for five years.
• Ensure they know where the drill sites are.
• Negotiate protection on mortgage subordination.
• Negotiate protection on environmental concerns.

-- Scott Nishimura

(Photos: Grapevine's Great Wolf Lodge, traffic on Texas 114 at Texas 121)

Having a meeting on the Barnett Shale? Publicize it here, on our new Community Calendar!

Grapevine neighborhoods join forces

Three Grapevine neighborhoods east of Texas 121 in the Glade Road area have signed a notice of intent to be represented by two independent landmen in any negotiations on a group gas lease, the group is reporting.

The Glade Crossing Neighborhood Association, Shadow Glen association, and Saybrooke association signed the notice last week, comprising a block of 1,500 homes, Chris Warton, president of the Glade Crossing association said today. Here's a link to their web site, which has contact information for the group. The neighborhoods are north of Glade Road, east of Baze Road, and west of Euless Main, and go north of Hughes.

The associations have also spoken to organizers of a coalition of Grapevine neighborhoods west of 121 and north of Hall Johnson Road about joining up, which would comprise a total block of 3,500 homes, Warton said. He said the group might also be interested in joining up with neighborhoods in Euless south of Glade Road. The neighborhoods west of 121 and north of Hall-Johnson have organized into a group called DFW West Homeowners; here's a link to their web site and contact information.

All of the neighborhoods began receiving offers in the fall from Cimmaron Field Services, acting on behalf of Chesapeake Energy. The offers: $3,000-per-acre signing bonus, 20 percent royalty, five-year term, no surface access rights. Here are our previous posts on Grapevine and our previous posts on Euless.

Warton said his group's goal is to try and win the financial terms of the lease deal that Dallas/Fort Worth Airport signed (about $10,000 per acre signing bonus), plus ensure environmental safeguards and try and get as short a term as possible. Chesapeake is drilling at the airport, which is just east of the Grapevine and Euless neighborhoods and could drill underneath the neighborhoods from there, the neighborhoods believe.

"We are not as concerned about the money as much as where the drill goes, what the noise is, how long the term is," said Warton, deputy head of standards for an aerospace company's Dallas training center.

Nobody besides Chesapeake appears to be in the picture for the leases, which diminishes the group's bargaining power, Warton acknowledged. But the group has "the fact that we are so large, and we can just say we're not interested. You'll shut down hundreds of homes."

Warton said his group found the two landmen through a Saybrooke homeowner, who knew one of them. One of the organizers of the neighborhoods west of 121 also is an independent landman.

-- Scott Nishimura

(Photo: Grapevine's Pleasant Glade Pool)

Having a meeting? Publicize it here, in our new Barnett Shale Community Calendar!

Talking amongst themselves: Grapevine homeowners

By day, Bob Ball sells software for Success Factors, a San Mateo, Calif., company that's just gone public. As if he didn't have his hands full with that job, Ball, who lives in Grapevine and is president of the Windsor Forest Homeowner Association, is ready to jump into the Barnett Shale scrum. "I'm just multi-tasking," he says.

Windsor Forest is one of several Grapevine neighborhoods, just west of D/FW Airport and Texas 121, and north of Hall Johnson near Parr Park, that received gas lease offers in the last week from Cimmaron Field Services on behalf of Chesapeake Energy. To read our previous posts on Grapevine leasing, click here. And for a list of Grapevine neighborhood associations and contacts, click here.

Ball says about 25 Windsor Forest homeowners met Saturday to discuss what to do next. Among their first concerns: Figure out where Chesapeake wants to drill from. Given Grapevine's restrictive drilling ordinance, the homeowners believe Chesapeake may want to drill from its its sites at D/FW, which Ball figures is a mile or so "as the crow flies" from Windsor Forest.

The Windsor Forest association has just 45 homes and is interested in "uniting" with other Grapevine area associations to collectively negotiate lease terms, Ball says. To contact Ball, send him an email at rball@successfactors.com or call him at (817) 456-1144.

Other Grapevine homeowners are interested in getting organized. Read their comments at the end of this earlier blog post.

-- Scott

(Photos: Soccer drills at Parr Park, an American Eagle jet on approach to D/FW)

Grapevine homeowners report lease offers

Property owners in two Grapevine neighborhoods are reporting lease offers. A homeowner in the Shadow Glen subdivision near Glade Road and Texas 121, behind Delaney Vineyard, reports a lease offer today from Cimmaron Field Services on behalf of Chesapeake Energy. The terms: $3,000-per-acre signing bonus, minimum $450 per lot, 5-year term, 20 percent royalty, and no surface access operations.

A homeowner in the Creekwood Estates subdivision north of Parr Park reports an offer of $3,000 per acre and a 20 percent royalty. Check back for more updates on this offer.

Grapevine has been anticipating drilling for some time. The City Council stiffened drilling regulations a year ago.  (Click here to read Grapevine's gas drilling ordinance; enter "gas drilling" in the search bar.) Earlier this year, the Grapevine-Colleyville School District agreed to a lease deal with Chesapeake. And drilling is underway at Dallas/Fort Worth Airport, also under an agreement with Chesapeake.

Blogging the Barnett Shale wants to hear whether any offers are going out to your Grapevine neighborhood. Send an email to snishimura@star-telegram.com or use the "comments" section on the bottom of this blog post. Please give us the following information: bonus offer per acre, royalty, term, land company, drilling company, whether a specific drill site has been mentioned, and whether your neighborhood is organizing. If it is, please forward us the contact info for your neighborhood.

And, to really help us verify your offer, if you can, please fax us a copy of your cover sheet and lease form to (817) 390-7773. We won't publish information about your specific property.

Thank you,

-- Scott

(Archive photo: Annual Grape Stomp, Delaney Vineyards, Grapevine)

D/FW Airport gets first royalty check

Here's today's S-T story on D/FW Airport's first royalty check.

And, click here to read our previous posts on drilling at D/FW.

And, to see Chesapeake's DFW drilling plan, click here: Download DFWLease.jpg  .

-- Scott

(Photo: Rig at D/FW)

Drilling for gas at the airport

Chesapeake Energy announced today that it is now starting to sell 30 million cubic feet of natural gas underneath Dallas/Fort Worth Airport from its first 11 wells.

The Oklahoma City-based company has started 33 wells overall, and for the next 50 years plans to produce a total of 300 to 325 wells over the airport's 18,000 acres. Chesapeake envisions reaching its peak in 2011 at D/FW Airport with 250 million cubic feet of natural gas being produced per day.

The company also said it believes that a total of 1 trillion cubic feet of natural gas can be produced from under the airport.

This is all big business for the airport, which received a $185 million check as a signing bonus from Chesapeake and will continue to receive a cut of the royalties for the gas that's sold.

-David

Few rules in lease negotiations...

This is a general response to the point about different neighborhoods receiving different lease offers. There is no such thing as a "standard" bonus payment, nor a "standard" royalty payment. Every single term in a lease is negotiable, including where the drill site is located.

Two big variables affect how rich a lease a property owner can command. One is negotiating from a position of strength, whether because the landowner controls a lot of acreage in a desirable location or is part of a group of landowners who work together. The second is the level of competition for the property. That's why Dallas/Fort Worth Airport, country clubs, municipalities and well-organized neighborhoods have won the best lease terms: They control a lot of land and they manage to drum up strong competitive bidding for their property.

In general, lease terms have become richer as the Tarrant County portion of the Barnett Shale has developed and has proved to be one of the richest portions of the field. Judging by reports we have reported in the Star-Telegram, lease terms have gone from about a 20 percent royalty and a bonus based on about $2,000 an acre or less, to about a 25 percent royalty and a bonus ranging from about $4,000 an acre or more.

Click here to read about the details of Woodhaven's community lease.

Click here to read the details of Dallas/Fort Worth Airport's gas drilling deal.

Click here to read the details of the Tarrant Regional Water District's gas drilling deal.

Click here to read about TCU's gas drilling deal.

Click here to read about Colonial Country Club's gas drilling deal.

Click here to read about the University of Texas at Arlington's gas drilling deal.

-- Jim Fuquay