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

View Larger Map

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

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)

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

Four Sevens: We'll be "competitive" on South Side

Check out the S-T Saturday for this report from our energy reporter, Jim Fuquay, who's also an author to this blog:

Four Sevens Energy, which has been signing up leases on the Fort Worth South Side for Chesapeake Energy, says it will continue pushing for leases on the South Side even though XTO Energy and its leasing partner Fort Worth Energy recently reached a deal with a coalition led by the Ryan Place neighborhood association.

The Ryan Place agreement calls for a $10,000-per-acre lot bonus, significantly greater than the $4,000 that Four Sevens and Chesapeake have been offering neighborhoods.

The Berkeley Place neighborhood association, part of the coalition with Ryan Place, also tells the S-T that it expects soon to receive lease offers from XTO. Thus far, Berkeley homeowners have only received offers from Four Sevens and Chesapeake.

Both the Ryan Place and Berkeley associations are endorsing the XTO offers.

Four Sevens isn't saying whether it plans to increase its offer. It tells the S-T only that it expects to be "competitive."

-- Scott

Click here for the full report on the Ryan Place/South Side coalition lease agreement.

(Photos: Bill Conley and Dan Roberts from the Ryan Place association, Berkeley Place July 4th parade)