Southwest Fort Worth Alliance deal with Vantage Energy near record

One of the smaller operators in the Barnett Shale has inked one of the biggest neighborhood leasing deals, as Vantage Energy LLC’s offer of $27,500 an acre won the endorsement of a big southwest Fort Worth group representing more than 20,000 homeowners. That is the second-highest publicly reported signing bonus in the Barnett Shale, topped only by a $30,000-an-acre bonus Chesapeake Energy agreed in the past month to pay a group of Lake Worth area property owners. The Southwest Fort Worth Alliance, representing more than 20 neighborhoods, represents about 10 times more land, however.

Vantage agreed to pay a royalty of 23 percent, just under the 25 percent than has become common. But Tolli Thomas, lead organizer of the Alliance group, said the payment is not subject to production expenses sometimes subtracted from royalties and should prove to be favorable for landowners. “We think people will be happy when they see it’s truly a no-cost lease,” Thomas said. She said the Alliance group encompasses a total of about 8,000 acres both north and south of Interstate 20. The area has been heavily canvassed by other drilling companies, but Thomas estimated that neighborhoods like her own, Wedgwood Square, are less than 25 percent leased. “I’d say we stuck together,” she said.

John Wehrle, vice president of business development for Vantage, said Alliance presents the company “a big position, and that’s attractive in and of itself.” He said the company has conducted technical studies of the area and is currently evaluating drill sites, whose locations will ultimately depend on the configuration of leases. According to Texas Railroad Commission records, Vantage Fort Worth Energy LLC, the company’s local subsidiary, averaged daily production of about 6.4 million cubic feet of natural gas and liquids in the year’s first six months. Wehrle said the company has made acquisitions not yet reflected in commission records that boost that to about 10 million cubic feet a day. Vantage also was the biggest bidder last month in an auction of Colorado leases by the federal Bureau of Land Management. The company submitted $57.6 million in winning bids on 19 parcels. The company was formed in late 2006, when it announced $470 million in backing from three private equity investment firms.

The Southwest Fort Worth Alliance lists these neighborhoods among its members: Candleridge West, Foster Park, Hallmark Camelot, Meadow Creek, Meadow Creek South, Meadow Creek Southgate, Meadows of Candleridge, Overton South, Overton Woods, Ridgeview Estates, South Hills Gas Group, Summer Creek Meadows, Summer Creek Ranch, Summer Creek South, Tanglewood Park, Trail Lake Estates, Villages of Sunset Pointe, Wedgwood, Wedgwood Central, Wedgwood East, Wedgwood Middle, Wedgwood Square NEZ, Wedgwood West, Westcliff, Westcliff West. Information meetings at are set for each Tuesday, Thursday and Saturday through September. Vantage's land agent, Caffey Group, will contact property owners with each neighborhood's meeting schedule.

For a complete report, see Tuesday's Star-Telegram.

--Jim Fuquay

Comments

[BC]

Should have signed when you had the chance! There will be many more incidents like we had tonight where the police had to be called to prevent a riot.