Barnett Shale

Venue fight underway as Burleson residents sue Chesapeake Energy

Chesapeake Energy, which is fighting a lawsuit filed by Burleson property owners who claim the company illegally reneged on a lease agreement that would have benefited 408 households, wants to have the case heard in a Dallas federal court. But the property owners filed the lawsuit July 20 in the 18th State District Court in Cleburne and want venue to be there. Burleson is in far northern Johnson County.

Chesapeake contends the proposed class action lawsuit should be in federal court in part because the Class Action Fairness Act authorizes such jurisdiction for class actions with more than $5 million at stake. Chesapeake, represented by the prominent Fort Worth law firm of Kelly, Hart & Hallman, notes that the lawsuit seeks nearly nearly $6.7 million just for lease bonuses.

 Another well-known Fort Worth law firm, Whitaker, Chalk, Swindle & Sawyer, represents two named plaintiffs, Leslee Dawn Ahrend and Buster Ray Williams, and wants the lawsuit to be declared a class action that would include the hundreds of Burleson properties that would have benefited from a lease agreement reached in 2008 between representatives of Chesapeake and an alliance of homeowners .

Under the agreement, property owners would have received a lucrative lease bonus of $27,200 per acre and a 25.25 percent royalty, the lawsuit states. It contends that Chesapeake was guilty of breach of contract in aborting the agreement by refusing to sign lease agreements with individual property owners based on the terms of the agreement. The plaintiffs cite a letter, dated Oct. 16, 2008, that a senior landman representing Chesapeake sent to representatives of Burleson homeowners. The landman said that, as a result of the deep economic recession and plunging natural gas prices, Chesapeake was "withdrawing previous offers to lease your minerals." The ,lawsuit contends that Chesapeake this year has offered a lease bonus of only $1,000 an acre and a 25 percent royalty.

See story in Wednesday's Star-Telegram.

--Jack  Z. Smith   

Lawyers address neighborhood regarding aborted gas leases

An attorney told a southwest Fort Worth neighborhood association Tuesday night that a litigation group formed by three Dallas law firms might seek hundreds of millions of dollars in damages against energy companies that reached lease agreements with alliances of neighborhood associations, but then declined to enter into individual lease contracts with many property owners.

"The promises they (energy companies) made to Fort Worth were maybe $150 million," attorney Kip Petroff told members of the Meadows of CandleRidge Neighborhood Association who packed a meeting at a Knights of Columbus hall. Petroff said the companies could be sued for triple damages, plus attorneys' fees, under provisions of the Texas Deceptive Trade Practices Act.

The litigation group has filed a lawsuit in Dallas on behalf of an Arlington couple, Willie and Carmen Booth, that it contends is due a lease bonus of nearly $5,000 from XTO Energy as a result of an agreement that the South East Arlington Coalition of Texas, an alliance of neighborhoods, reached for lease bonuses of $26,517 per acre. The Meadows of CandleRidge association was part of the Southwest Fort Worth Alliance, which reached an agreement with Vantage Energy for lease bonuses of $27,500 per acre. Meadows of CandleRidge Association President Eva Bonilla stressed Tuesday night that the organization was not endorsing the litigation group's legal effort, but only allowing it to hold an informational session.

The energy companies sued by the Booths are expected to contend that they were not bound to pay lease bonuses negotiated with alliances of homeowner groups unless the companies had entered into binding lease contracts with individual property owners.

Read more about this in Thursday's Star-Telegram.

--Jack Z. Smith

Meadows of Candleridge, Trail Lake Estates neighborhoods join

Homeowners from the Meadows of Candleridge and Trail Lake Estates neighborhoods in southwest Fort Worth (map at left), who have received leasing offers from Dale Resources and Potestas ranging from $2,000 to $6,000 an acre, have formed a negotiating group called Meadows of Candleridge and Neighbors. The group is outside the Southwest Fort Worth Neighbors negotiating group, which is soliciting bids from three operators. According to organizers, the Candleridge group has 400-plus unsigned households. They are asking homeowners in the area not to sign a lease individually and instead work with the organizations. For more information, contact Chad Pierce at chadpierce.meadows@sbcglobal.net or Eva Bonilla at evabonilla@yahoo.com

-- Jim Fuquay

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Candleridge-Wedgwood alliance moves ahead

The nascent Candleridge-Wedgwood alliance in south Fort Worth is moving forward. The Candleridge Homeowner Association gas committee, which met for the first time Thursday night, is amenable to negotiating gas leases on behalf of itself and the largest associations representing the neighboring Wedgwood, Dan Murphy, head of the Candleridge committee, says.

The Candleridge committee is meeting again Thursday next week, and representatives from Dale Resources, one of two companies signing leases in the Candleridge-Wedgwood area, are scheduled to speak, Murphy said. The committee has also invited representatives of the Wedgwood Neighborhood Association, the Wedgwood East Neighborhood Association, and the Wedgwood South Neighborhood Association. The meeting is not open to the public, Murphy said.

The Wedgwood and Wedgwood South associations want to align themselves with the Candleridge association, their gas committee chairs say (the Wedgwood South association is having a gas information meeting Nov. 27 to discuss the issue further, and Murphy said he doesn't consider that association as having firmly made its decision yet), and the Wedgwood East association is forming a gas committee to determine what to do next.

Murphy also said he's speaking next week to a group of homeowners in the middle of the Wedgwood area who aren't represented by any homeowner association. City Councilman Jungus Jordan's office is speaking to those homeowners Wednesday night to divine their interest in forming a recognized neighborhood association.

Murphy said his committee is comfortable with the idea of speaking on behalf of the large neighborhood block, which would represent a large part of south Fort Worth from Interstate 20 to Sycamore School Road. The question of whether Candleridge would be better off speaking just for itself came up during the committee's meeting, Murphy said.

"Most of us felt like a large group was better than a smaller one," he said.

Right now, Murphy said the Candleridge committee is studying model leases, including one negotiated by the Tanglewood Neighborhood Association in Fort Worth and one provided by Paloma Resources, the other company vying for leases in the Candleridge-Wedgwood area. It's also possible the group could hire an attorney, but Murphy said the committee likes the Tanglewood lease at this point.

Here's a new resource in this blog: Model leases negotiated by the Berkeley, Ryan Place, Mistletoe Heights, Tanglewood associations in Fort Worth.

-- Scott

Candleridge may talk on behalf of Wedgwood group

The Candleridge Homeowner Association is moving toward offering to negotiate on behalf of itself and the largest organizations representing south Fort Worth's Wedgwood neighborhoods. Such an alliance would represent a large block of the city from Interstate 20 to Sycamore School Road. At least two of the three large Wedgwood associations say they're amenable, and the third is organizing its gas committee to determine what to do next.

Meanwhile, while the associations deliberate, one of the two companies competing for Candleridge leases has improved its offer, and both companies have scheduled a string of "signing parties," said Dan Murphy, who is heading up Candleridge's gas committee.

Murphy, a retired engineer who spent years in the petroleum industry, said the Candleridge association's leadership is willing to take up the task of negotiating for the large neighborhood block. But he's deferring to the committee, which is having its first meeting Thursday night.

"I don't want to run roughshod over them," he said.

Paloma Resources, which initially sent letters to Candleridge saying it would offer a $4,000-per-acre signing bonus and 25 percent royalty, has sent a fresh round of letters saying it's offering $7,500 per acre and the same royalty, Murphy said. Dale Resources, signing leases on behalf of Chesapeake Energy, is offering a signing bonus of $5,000 per acre and 25 percent royalty.

Paloma has scheduled a series of six signing parties that start Nov. 13 and will run Tuesday nights through Dec. 18 at Trinity Cumberland Presbyterian Church, Murphy said. Dale ran an Oct. 30 signing party and another one Tuesday night at the Radisson Hotel Fort Worth South.

Murphy said his association is asking its homeowners to wait on the outcome of negotiations before signing. He said Dale has asked to speak to the 10-member gas committee. "We welcome that, but we didn't think the first meeting was appropriate, so we'll probably have another meeting next week," he said.

Murphy also said the negotiating group will likely try and conduct parallel negotiations with Paloma and Dale, and might also try to interest XTO Energy.

Chris Wilson, head of the Wedgwood South Neighborhood Association's gas committee, said his association has already decided it wants to "team up with Candleridge."

"If we align all the associations that are close to each other, we'll have a sum total of 1,000 acres," he said, referring to the Candleridge, Wedgwood South, Wedgwood East, and Wedgwood associations.

Wedgwood South has seen two lease offers. One from Dale offers $5,000 per acre signing bonus and a 25 percent royalty. A second flier from Paloma went to portions of the neighborhood that are deeded Candleridge and offered a $4,000 per-acre bonus and 25 percent royalty. But it's not clear whether Paloma has increased those terms to the same as the ones it's floated to other property owners in Candleridge.

Wedgwood South is having a "gas leasing information meeting" 7 p.m. Nov. 27 at Woodway Elementary School. An oil and gas attorney who spoke recently to the Wedgwood East association will speak.

Wilson says he hopes the neighborhood alliance might be able to negotiate a better bonus, higher royalty, and provision requiring the drilling companies to pick up the cost of transporting the gas.

He says the association's message to its members right now is simple: "Wait. Don't do anything."

Michelle Gwin, head of the Wedgwood Neighborhood Association's gas committee, also said in an email that her group wants to team up with Candleridge. The Wedgwood Association reports that its homeowners have been seeing lease offers from Dale offering a $5,000 per-acre signing bonus and 25 percent royalty.

"We are planning on working together with Candleridge, Wedgwood South, Wedgwood East and trying to help other areas (of Wedgwood) that do not have an association," Gwin said.

The Wedgwood association is having a gas information meeting 7 p.m. Nov. 19 at the Hulen Street Baptist Church. The same attorney who spoke at the Wedgwood East meeting will speak at the Wedgwood association's meeting.

The Wedgwood East Neighborhood Association is organizing its gas committee and will ask for qualified volunteers at a meeting 6:30 p.m. Thursday at Unity Church of Fort Worth.

"We're still a step behind," Beverly Myres, vice president of the Wedgwood East association, said. "We're talking to Candleridge and the others, but we're just a little behind."

Multiple prospective drill sites have been discussed, the neighborhood groups say, including ones at Trail Lake and Alta Mesa, McCart and West Cleburne, and McCart and Sycamore School Road. None of the drill sites appears controversial with the neighborhoods' leadership and committees at this point.

For all of Blogging the Barnett Shale's previous posts on Candleridge and Wedgwood, click here.

-- Scott

(Photos: Clockwise from top left, Candleridge Park, Wedgwood, Wedgwood's J.T. Stevens Elementary, Wedgwood East, Wedgwood South)

Wedgwood associations organize

Wedgwood residents in south Fort Worth are organizing to discuss what to do with lease offers that property owners have been receiving. Several hundred property owners turned out at two meetings last week that were hosted, in turn, by the Wedgwood East Neighborhood Association and then by the Wedgwood Neighborhood Association.

The Wedgwood Neighborhood Association is organizing another meeting, scheduled for 7 p.m. Nov. 19 at the Hulen Street Baptist Church, 7100 S. Hulen St. A Fort Worth oil and gas attorney who spoke at the Wedgwood East meeting will give a presentation to the Nov. 19 meeting.

Cora Mosley -- the Wedgwood Neighborhood Association president -- said her group and the Wedgwood East group are discussing banding together. In the meantime, the associations are asking property owners to "wait and see what happens," Mosley said. (The Wedgwood South Neighborhood Association also is interested in joining up.)

Beyond the best financial terms it can get, Mosley said "we're also concerned about the drilling site itself," which the association isn't clear on.  "Residents have expressed concerns about safety and noise," she said.

Jim Rohleder, president of the Wedgwood East association, said he sensed that relatively few property owners in his neighborhood have signed lease offers. The Wedgwood East meeting drew 600-800 attendees, according to the assocations' estimates, while the second meeting drew about 150, Mosley said.

The two associations are still organizing gas committees. Michele Gwin, the Wedgwood Neighborhood Association's vice president, is heading up the neighborhood's gas committee. The Wedgwood East association hasn't formed a committee yet, but will ask for interested people at its next meeting, 6:30 p.m. Nov. 8 at the Unity Church of Fort Worth, 5401 Woodway, said Beverly Myres, vice president and acting treasurer of the Wedgwood East association.

The Wedgwood associations are also discussing the possibility of trying to add the Candleridge associations, which are south of Wedgwood, to any negotiating group. The Candleridge Homeowner Association is in the process of forming a gas drilling committee. It has expressed interest in joining up with the Wedgwood group, Myres said.

Dieter Satz, immediate past president of the Candleridge Homeowner Association, said property owners in his area have received offers from Paloma Resources  ($4,000 per acre bonus, and 25 percent royalty) and Dale Resources, ($5,000 bonus and 25 percent royalty).

"Needless to say, none of this is in synch with the rest of the city," Satz said, referring to the $15,000 bonuses that well-organized associations on Fort Worth's near South Side have negotiated. "So they have some dealing to do."

Residents of other neighborhoods that are considered part of Wedgwood report receiving lease offers. For example: Bellaire Park North (click here for reader comment on this blog, and here for info on the neighborhood association.)

The city of Fort Worth's neighborhood database lists 25 recognized neighborhood associations that cover some part of Wedgwood.

-- Scott

Photos: Wedgwood's J.T. Stevens Elementary School (top right), bird on pond at Candleridge Park (bottom right)

More on Wedgwood...

Blogging the Barnett Shale reported earlier this afternoon that property owners in Fort Worth's Wedgwood East area have received lease offers.

But it wouldn't be a party without the rest of Wedgwood, which comprises numerous neighborhood groups that cover a large area of south Fort Worth.

The Wedgwood Neighborhood Association --bounded by Hulen/Granbury Road on the north, Alta Mesa Boulevard on the south, Granbury Road on the west, and Hulen Street on the east -- reports that Dale Resources this week began distributing offers of $5,000 signing bonus per acre, with a $750 minimum and a 25 percent royalty.

The Wedgwood Neighborhood Association is having a meeting at 7 p.m. Thursday at the Waterford at Fort Worth, 6799 Old Granbury Road, to discuss what to do next. The Wedgwood East association, as we reported earlier, is having a meeting 6:30 p.m. Wednesday night at Westcreek Elementary School, McCart and Walton, to discuss the issue. It has invited members of the other Wedgwood associations.

Meanwhile, the Wedgwood South Neighborhood Association reports a lease offer similiar to the one received by the Wedgwood Neighborhood Association. Dale Resources, in offers sent out last week, is offering a signing bonus of $5,000 per acre, a $750 minimum, 25 percent royalty, and five-year term, said Elizabeth Menefee, the association's president.

Wedgwood South is bounded on the north by Alta Mesa, south by Saldana and Candleridge Park, west by South Hulen Street, and east by Woodway. It is adjacent to Wedgwood East.

Menefee said it's possible the Wedgwood East, South, and West associations could pair up with the nearby Candleridge association to try and negotiate better terms. She said Paloma Resources on Oct. 1 sent out offers to homeowners in Wedgwood South, whose property is deeded as part of Candleridge. The terms: $4,000 an acre signing bonus, $750 minimum, and 25 percent royalty.

-- Scott