Vantage Energy, which just weeks ago agreed to one of the largest single leasing deals of the urban leasing boom, says it is not signing new leases with the big Southwest Fort Worth Alliance group because of the drop in natural gas prices and turmoil in financial markets. The Denver-based firm, privately funded by three investment firms, said it will honor any drafts it previously issued, which some observers estimate at about half the landowners in the Alliance, which covers more than 20 neighborhoods north and south of Interstate 20. Vantage issued an apology and explanation of its actions this morning, which is available at the Alliance web site or which can be downloaded here: Download vantagealliance_letter.pdf
"We are trying to make the best of a bad situation," said Vantage executive John Wehrle. He said the company has "tens of millions of dollars" invested so far in the Alliance area. He said the company intends to remain active in the Barnett Shale, but probably at lesser financial terms. "We still have our original commitments lined up" from private equity firm Riverstone and two other investors, Wehrle said. "But we're being told, 'Hey guys, it's a new market and new environment. We can't spend that anymore.' " Wehrle declined to discuss other Vantage deals in the Barnett Shale, such as its recent agreement with Titan Operating and two big Grand Prairie negotiating groups. Vantage and Titan share Riverstone as a common investor but otherwise are separate companies, both firms have said.