Barnett Shale

Judge to hear leasing lawsuits

In October 2008, as natural gas prices continued their freefall that began the previous July, natural gas producers and their leasing agents abruptly ceased signing mineral rights leases in Tarrant County. Many homeowners whose neighborhood groups had negotiated rich signing bonuses and favorable lease terms were nevertheless shut out of the bonanza. Now the energy firms' actions are the subject of about 20 Tarrant County lawsuits filed by three Dallas law firms known as the North Texas Lease Litigation Group on behalf of individual property owners in southwest Fort Worth and southeast Arlington. The suits contend that property owners were illegally denied the opportunity to sign lucrative leases negotiated by the neighborhood coalitions. Kip Petroff, an attorney for the litigation group, said it expects to eventually file hundreds of cases on behalf of such residents.

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The last shoe drops: Titan terminates BC-MRC deal

Three days after suspending leasing with the Bedford-Colleyville Mineral Rights Coalition, Titan Resources on Wednesday told the big group that "all our efforts to lease mineral interests of members of BC-MRC are now terminated." Titan said it will not accept any new leases but is honoring drafts issued through Oct. 18. "It is our hope that new opportunities will occur for leasing activities in the future, and we appreciate all of the mineral owners in the BC-MRC," Titan said in an announcement sent the homeowners group. The group posted on its Web site a statement that it is "extremely disappointed and strong disagrees with this unilateral decision by Titan. It plans to consider all options at its disposal to seek to enforce the agreement which Titan has now repudiated, as should all individual members." The group estimates that Titan signed leases with 15 percent of its members, "but needs far more acreage within BC-MRC boundaries to form effective drilling units." It urged members to remain united and "not feel pressured to accept something less than what has already been offered and accepted just because of claims that competitive conditions have subsequently changed."

-- Jim Fuquay

Bedford-Colleyville-Grapevine deal with Titan suspended

Titan Operating today informed Bedford-Colleyville Mineral Rights Coalition that it plans to re-examine its
leasing strategy given the recent turmoil in world economic markets, the homeowner group reports. "Therefore, effective immediately, all signing sessions previously scheduled by BC-MRC have been suspended," B-C MRC said in an email to members. According to the email, "Titan has indicated that it will honor all executed lease agreements for which a bank draft has already been issued, including those signed Saturday, Oct. 18 at a scheduled signing session in Euless. According to Titan, it plans to suspend leasing on a temporary basis pending an executive management meeting and possible discussions with its financial partner(s).  Titan has indicated they will communicate the results of their
discussions to BC-MRC at the conclusion of its review process." 

Titan follows similar moves by Chesapeake Energy, Vantage Energy and XTO Energy in the past week as producers struggle with both falling natural gas prices and a tight credit market. Titan is backed by Riverstone Holdings, a private equity group that also has a stake in Vantage Energy.

-- Jim Fuquay

Lease slowdown hits home

Some of the biggest producers and most active leasing companies in the Barnett Shale brought their leasing activities to a screeching halt this week, disappointing unsigned property owners and perhaps changing the market price of signing bonuses in the play for good. Among the disappointed landowners is Rorie Cowden, whose Hidden Valley miniature golf course on 5.5 acres bordering Jacksboro Highway is part of a Lake Worth negotiating group that signed the richest reported lease in the county: a $30,000-an-acre offer from Chesapeake.

"I was waiting for them to send me my lease packet," Cowden said Thursday, but he got nervous when he heard producers were cutting back. When he walked into the Vance Godbey’s restaurant, where signings were under way, he was told that the new bonus figure was $5,000. The difference: $137,500. "I did not sign," he said. "I never thought it would hit like this. The bubble has burst."

See the Star-Telegram's full report here.

-- Jim Fuquay

Bedford-Colleyville-Grapevine group endorses Titan/Caffey offer

Bedford Colleyville Mineral Rights Coalition says it is recommending a mineral rights lease from Titan Operating and its land company, Caffey Group, for close to 10,000 property owners in the group's approximately 5,000 acres in Northeast Tarrant County. The group says it represents at least 80 percent of the land in its boundaries, generally Colleyville Boulevard/Brown Trail to the west, Hall-Johnson to the north, Texas 121 to the east and Harwood Road to the south. The three-year lease pays a bonus of $25,000 an acre and a royalty of 25.5 percent cost-free, and also includes environmental provisions that call for compressor stations to be completely housed. In an e-mail to members, organizers said.

It's only the most recent win for Titan, a new group formed by executives with experience at other large Barnett Shale producers. The group, with Caffey, also has won backing from big homeowner groups in southwest Arlington. Information and signing meetings will be publicized on the group's web site at http://www.bc-mrc.org.

-- Jim Fuquay

Northern Bedford and southern Colleyville groups unite

The Bedford Mineral Rights Coalition has added a group of homeowners in southern Colleyville.

The new group is now being called the Bedford Colleyville Mineral Rights Coalition.

"The initial target of the group encompasses well over 640 acres," the group said in a recent statement. "Homeowner associations in north Bedford and south Colleyville have expressed interest in the new coalition and have designated representatives from each neighborhood to attend an organizational meeting on July 1st."

The group also launched a website. You can check it out here.

Here's what we've said about the Bedford Mineral Rights Coalition before it expanded in size.

--David Wethe