Barnett Shale

Chesapeake installing pipeline under Lancaster Avenue

If you've noticed some activity along Lancaster Avenue just south of downtown Fort Worth, know that it's work on an 8-inch-diameter pipeline Chesapeake Energy is laying to serve its well drilled in 2008 just south and west of the T&P Warehouse building. The well, on what the company calls its Westgate padsite, was completed in May 2009, says Chesapeake's Kevin Strawser, and is only now being tied into an existing pipeline already serving the firm's Mercado Juarez and Arc Park sites. The new pipeline will be installed by boring beneath Lancaster, Strawser says, popping above ground just west of the wellsite in a grassy area between Lancaster and Interstate 30, and to the east  along the railroad tracks near Interstate 35W. The city's public light installations along Lancaster will be protected with barricades, he said. The work started about 10 days ago and is expected to take 10 to 12 weeks.

-- Jim Fuquay

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   

Downtown property owners weighing Chesapeake offer

Andy Taft has written a letter to downtown Fort Worth property owners asking them to essentially stick together for a stronger negotiated lease.

Property owners are mulling over the first written offer made to the whole group, which is more than 150 acres and more than 120 members, said Taft, who is heading up the Downtown Fort Worth Gas Committee.

The offer is from Chesapeake Energy, and it includes a per-acre bonus of $25,000, a royalty of 25.25 percent, and a three-year initial term.

Our story in today's paper talks about a brochure being sent out by Chesapeake. The brochure is inviting downtown property owners to come by the company's headquarters at 301 Commerce St. in Fort Worth. The location in our story referred to the company's new headquarters in the Pier 1 building, but Chesapeake won't be in there until later this year, said Jerri Robbins, a spokeswoman for the company.

--David Wethe

Chesapeake snags Sundance Square (downtown FW)

Chesapeake Energy announced this morning it has signed a lease with Sundance Square to drill for natural gas under the 35-block downtown entertainment district.

The district stretches from 2nd to 5th streets and from Lamar to Elm streets. Terms of the deal were not announced.

Chesapeake also did not disclose in its press release specific locations for the drill site other than to say they will be "three strategically located padsites that are located immediately east, south and west of the central business district. These sites will allow natural gas production from under not only Sundance Square, but all of downtown and other nearby areas."

So far, we know one of its drill sites is just south of the Texas and Pacific warehouse on the south side of downtown.

This is an interesting acquisition for Chesapeake because it's right next to the headquarters of XTO Energy, which owns more than a handful of downtown buildings right next to the Sundanace Square area, and has been competing with Chesapeake for leasing mineral rights in downtown.

Here's what we said about this just last month.

And of course, when Chesapeake announced it was buying the Pier 1 Imports building just northwest of Sundance Square, the company said it would be using the mineral rights under that patch of land as well.

"The opportunities for commercial real estate development are tremendous in Fort Worth, and we are pleased to be able to continue the tradition of reviving an important corridor into downtown, while remaining sensitive to the future growth of this area,” said Aubrey McClendon, Chief Executive Office of Chesapeake.

So far, Chesapeake's drilling site in downtown is just 40 acres, the company said in its release, but the meeting with downtown property owners about a month ago included about 120 acres pooled together.

More on this to come.

--David Wethe

Drilling one-step closer to downtown

Drilling and leasing for natural gas has been hot and heavy all around Fort Worth, but leasing in the actual downtown core has been slow going.

But that could soon change. Property owners in downtown held a meeting last week and agreed to work together to lease their mineral rights.

Well, some of the owners agreed, anyway.

Andy Taft, president of Downtown Fort Worth, Inc., says his non-profit group that represents downtown owners and encourages new development sent out letters to land owners holding about 800 acres in and around downtown. His group received feedback from property owners who own about 120 acres who say they want to organize a gas-lease committee to strike a deal.

The property owners who met last week listened to a presentation from XTO Energy, Finley Resources, and Chesapeake Energy. The gas companies speculated that about 10 percent of downtown had been leased already.

Among those interested in pooling their downtown land: Downtown Fort Worth Inc., which has 11 acres itself; the City of Fort Worth, which owns more than 300 acres; and Chesapeake, which just acquired the Pier 1 building.

Chesapeake also has a drill site just south of the Texas and Pacific warehouse on the south side of downtown. It's been approved by the Railroad Commission, but not by the city.

--David Wethe