Barnett Shale

Near-record territory for Arlington group

One of the richest natural-gas deals on record in the Barnett Shale was agreed to over the weekend by the North Central Group in Arlington.

Here are the basic details that Axia Land Services, a representative of Chesapeake Energy, agreed to:

• $27,000-per-acre bonus
• 26 percent royalty
• 3-year initial term
• 2-year renewal option at the same bonus rate
• Fee-free lease agreement

The details can be seen on the Web site for Mount Olive Baptist Church, which helped to form the neighborhood group.

The group's boundaries are Road to Six Flags on the north, Division Street on the south, Davis Street on the west and Mesquite Street on the east.

The bonus amount came $200 short of tieing the latest record set by a couple of groups in Burleson, as reported last month. But the royalty rate was more than the Burleson groups' rate of 25.25 percent.

North Central Group's royalty fell just short of the record 26.5 percent set by the Greater Meadowbrook Mineral Leasing Task Force in March. You can read about that story here.

For neighborhood bragging rights, the North Central Group did manage to eclipse the bonus and royalty amounts offered to the nearby SEAPO group.

--David Wethe

Crosstex, Axia, join Barnett Shale council

Crosstex Energy LP, one of the biggest operators of pipelines in the Barnett Shale, and Axia Land Services, a mineral rights leasing company, have joined the Barnett Shale Energy Education Council, an industry group that provides public information about natural gas production in the field. Crosstex is the group's first midstream gas company, meaning it transports natural gas from the well head and on to the big transmission lines that carry gas to major markets. It said it handles about 1 billion cubic feet of gas per day in the field. Axia, a partnership between Western Production Co. and Chesapeake Energy, is the council's first lease acquisition company. The council now has 11 members, including Chesapeake, Dale Resources, Devon Energy, EnCana, EOG Resources, Forest Oil, Four Sevens Resources, Quicksilver Resources and XTO Energy.

-- Jim Fuquay

Catching up to Arlington's Extended Oaks: $17k

Thanks to the readers who alerted us to the gas lease deal that Northwest Arlington's Extended Oaks neighborhoods have struck with Axia Land Services, which is offering leases in the area on behalf of Chesapeake Energy. The terms: $17,000-per-acre, 25 percent net royalty, and three-year term. The neighborhood gas committee has been fielding questions from homeowners who wonder whether this is the best deal they can get. (Click here to view the Extended Oaks map and see a copy of the lease).

"Could better offers appear in the future? Yes," the committee says on its web site. But the committee feels it's negotiated its best deal, and "no further negotiations are planned."

Extended Oaks' target area is Randol Mill/Westwood on the north, Fielder Road on the east, Division on the south, and Crowley Road on the west. Click here to read our previous posts on the Extended Oaks.

-- Scott Nishimura

Woodland West (West Arl.) offer gets better

Things are looking up for a small group of Woodland West (West Arlington) homeowners that's still trying to negotiate a neighborhood lease agreement.

Mel Goodson, chairman of the group, says Axia Land Services, which is signing leases in the neighborhood on behalf of Chesapeake Energy, is now verbally offering the group two choices: a $12,500-per-acre signing bonus with a 25 percent net royalty, or a $15,000 per-acre bonus with a 22 percent net royalty.

Goodson, who lives in another part of Woodland West that signed up at better terms, says the group "resoundingly declined" Axia's offer at a neighborhood meeting.

"We are concerned that the net costs of production and transportation would negate any royalty payments," he said.

The group, which is in the southeast portion of Woodland West, is the last part of the neighborhood that hasn't negotiated a community agreement. Click here to visit the group's web site.

-- Scott Nishimura

(Photo: Woodland West park)

Extended Oaks (NW Arl) group duels itself, Chesapeake

Northwest Arlington's Extended Oaks group has been fighting divisions within itself and, it says, a landman and Chesapeake Energy.

Now it has a new and improved lease offer to deal with: $15,000 per-acre signing bonus, 25 percent royalty, three-year term, and two-year option at $15,000 per acre.

"I'm still holding off in the sense that the group has to decide from a leadership point of view," says Jerry Pikulinski, one of the group's organizers.

That may be a challenge. Pikulinski acknowledges difficulty in keeping his group together and says one member has been trying to negotiate with Chesapeake's land agent, Axia Land Services, on the sly. "I'm going to have to deal with defectors in my group who are working against the negotiating process," Pikulinski said.

Extended Oaks, which says it represents about 700 property owners in the area west of Randol Mill Road/Westwood, west of Fielder Road, north of Division Street, and east of Crowley Road, has been trying to encourage competition for leases but hasn't found any.

It's been dueling Axia, which Pikulinski says has been trying to "bust" the neighborhood alliance. He points out that Axia's landman, Mark Gordon, bumped up the company's offer to the $15,000 from $12,500 at a recent neighborhood meeting, but that Axia hasn't put anything in writing. Axia also is telling the neighborhood that the offer would include what's in the Extended Oaks boundaries, Pikulinski says, but he says that also is not in writing. Initially, Axia wanted to exclude the area between Oakwood and Fielder, Pikulinski said.

"We don't have anything in the way of an agreement or an understanding," Pikulinski said. "They're not negotiating with us."

Axia and Chesapeake say the neighborhood group has been so intent on encouraging a competitor to come in that it hasn't invited Axia and Chesapeake in to talk. Jerri Robbins, Chesapeake's public affairs manager for the Barnett Shale, says the company would be receptive.

"That's what we're there for," she said.

In the meantime, Robbins issued a defense of Gordon, the landman who has been under attack by leaders of the alliance. Click here to visit the Extended Oaks web site.

"I'm aware of Mark Gordon. Mark Gordon is a good guy. Every interaction I've had with him has been positive," said Robbins, pointing out that Gordon has been receiving good feedback from Extended Oaks homeowners. Gordon referred questions to Chesapeake.

Of Axia's offer, Robbins said, "that's a good offer. Nothing wrong with $15,000 an acre."

She also pointed out that property owners are under no obligation to sign any lease offer. "Property owners have the right to sign when and where they want, or they don't have to sign at all," she said.

Robbins said she'd have to research who is covered under the Axia lease offer. More on that later.

The Extended Oaks association is having a meeting 7 p.m. March 4 at the Arlington Chinese Church, 805 Oakwood Lane, to discuss its next moves.

-- Scott Nishimura

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

(Photo: Randol Mill Park)

Millbrook (NW Arl) residents get new lease offers

Northwest Arlington's Millbrook neighborhood is getting a fresh round of lease offers, which puzzles the neighborhood, because Chesapeake Energy put on a major push six months ago to sign leases in Millbrook, Interlochen, Lochen Green, and Waterway Park neighborhoods.

"It was my understanding that well over half the (800) houses they tried to reach signed leases with them," said Don Gwynne, president of the Millbrook Home Owners Association.

That offer, from Continental Resources on behalf of Chesapeake, called for a signing bonus of $5,500 per acre, 24 percent royalty, and three-year term.

The new offer, which homeowners have been receiving for the last few weeks is from Axia Land Services, an affiliate of Western Production Co. The drilling company isn't identified, but Axia has been signing leases in the area on behalf of Chesapeake.

The financial terms: $5,000-per-acre signing bonus, 25 percent royalty, 3-year term, with no surface access allowed.

The potential drill site also is not identified in the lease packet, and Gwynne isn't clear on where the drill site is. The idea of drilling in the northwest Arlington neighborhoods has been controversial.

One proposed Chesapeake site was next to an electric substation outside Waterway Park, but the Waterway Park association resisted that. Gwynne said another potential Chesapeake site the neighborhood learned of through landmen was west of Eastchase Parkway about a mile south of I-30.

-- Scott