Barnett Shale

Wise County tops Tarrant in active rigs

For the first time in years, Tarrant County does not lead the Barnett Shale in active drilling rigs. Wise County jumped in front this week with nine, compared to seven each in Tarrant and Montague counties. The changing of the guard illustrates drillers' continued migration in search of crude oil and liquids-rich natural gas, which are more plentiful in the northwestern reaches of the Barnett. In all there were 46 active rigs in the field, down two from a week earlier.

-- Jim Fuquay

Dallas could allow drilling near levees

The city of Dallas continues to work on its drilling ordinance, although there is relatively little activity in that city given the Barnett Shale's less-favorable quality east of Tarrant County. One issue involves how close to flood-control levees to allow drilling. The U.S. Army Corps of Engineers bans drilling closer than 3,000 feet to levees on land it controls, the Dallas Morning News says, but proposed rules for the city set no such limits. The story is here.

-- Jim Fuquay

U.S. active rigs flat, Barnett up to 52

Active U.S. drilling rigs were unchanged this week, holding at 1,979, according to oilfield services company Baker Hughes Inc. There were 1,329 rigs exploring for oil and 647 for natural gas, with three listed as miscellaneous. A year ago this week Baker Hughes reported 1,782 active rigs. In North Texas’ Barnett Shale there were 52 active rigs, up two from March 24. Tarrant County led with 10 rigs, followed by seven in Wise County; six in Denton, Jack and Johnson counties; and five in Parker County.

— Jim Fuquay

 

FW Council votes down changes to gas drilling ordinance

After talking for months about revising its gas drilling ordinance, the Fort Worth City Council today voted against revisions to it.

While council members said they want more pubic input and need to continue exploring the issue, it is not clear where the city will go from here.

Councilwoman Kathleen Hicks said she would have preferred to see the revisions delayed rather than voted down.

The council did vote for a six-month extension on the city's moratorium on saltwater injection wells, which was scheduled to expire at the end of the month.

--Bill Hanna

Barnett Shale drilling rigs drop below 200

The number of active drilling rigs working in the Barnett Shale dipped to 192 as of Friday, down more than 10 rigs from a week earlier. It was the first large week-to-week change in the count since the months-long slide in natural gas prices that began in July. The rig count in the 16-county area included in RigData's weekly census has routinely remained above 200 for more than a year. Among other large drillers, Chesapeake Energy had 37 rigs, down from the roughly 40 it had been running, while Devon remained at a more typical level of 42 rigs. (EDITOR'S NOTE: We've removed an erroneous reference to XTO reducing its rig count. The Fort Worth company reported 19 rigs, about its level for the year. Thanks for the comment pointing out the correct number.)

-- Jim Fuquay

Railroad Commission ruling forces unleased land owners into drilling unit

The Texas Railroad Commission has issued a ruling allowing more than two dozen east Fort Worth landowners who didn’t sign a mineral rights lease to be forcibly included in a drilling plan, a move that gives producers added leverage against leasing holdouts. It is the first time the commission, which regulates the oil and gas industry in the state, has used a 1965 law to take such action, called a force pooling, against small land owners. Experts said the ruling is particularly applicable in urban areas, where hundreds of small tracts often must be assembled, or pooled, into a drilling unit. Jacqueline Weaver, a University of Houston law professor who has written extensively on Texas oil and gas law, said the issues involved are important enough that they likely will have to be resolved by state courts. Historically, she said, the Mineral Interest Pooling Act has been used to protect small land owners from getting squeezed out of drilling units, rather than forced into one.

“It sets a precedent,” Weaver said of the August ruling. “Horizontal drilling is going gangbusters in the Barnett Shale, and other producers will have the same difficulties.” To see the Railroad Commission examiner's original ruling, the revised ruling and the final order, click here and then click on the third item from the bottom, titled "Application of Finley Resources, Inc. ..."

See the full report from the Friday Star-Telegram here.

-- Jim Fuquay

Chesapeake takes a breather in Southlake

If Chesapeake Energy wasn't already reining in its leasing efforts in Southlake following passage of a tough new drilling ordinance in the Northeast Tarrant city in May, it certainly appears to be doing it now. At a public meeting Monday night, Chesapeake public affairs representative Lisa Powers told an audience of about 185 residents and city officials that the producer "is not aggressively seeking additional leases" in the city, where it has secured two potential drill sites. Some attendees said they thought Powers was saying Chesapeake was suspending leasing efforts in the city.

Tuesday, Powers told us it's more of a slowdown. "We're focusing on other areas," she said. Besides the company's problems with the ordinance, she said, "the pipeline costs in Southlake are twice what they are in other areas. With the drop in the price of natural gas," Chesapeake isn't interested in adding to its leases in the city right now. Powers said the city's fees of $15,000 for a special use permit for each drill site, plus $8,500 per well, are high compared to an average of $3,000 to $4,000 for drilling permits throughout the Barnett Shale.  When Southlake City Council was debating the ordinance, passed May 20, Chesapeake submitted written comments noting that restrictions on holding ponds for water and water storage tanks could prevent production. Chesapeake and XTO Energy at the time had been busy signing mineral rights leases in the city and surrounding area. XTO was scheduled to speak at Monday's meeting but a representative did not show.

John Terrell, a Southlake Councilman and mayor pro tem who attended the meeting, said Tuesday that "my perception is, this was at least a partial statement to indicate Chesapeake was not thrilled with our ordinance. At the same time, Chesapeake did not indicate they were going to stop doing business in Southlake, but they're slowing down." He said the company could be getting ahead of itself by complaining about the ordinance before it even applies for a permit. "It's difficult for the gas companies to know how difficult it's going to be" to get a permit, Terrell said. He said that while some at the meeting seemed to back the company, "a lot of people expressed support for the ordinance."

For our previous coverage of Southlake's drilling ordinance, click here:

Download southlake_ordinance_report.doc

-- Jim Fuquay

Driller sues Flower Mound over drilling ordinance

Red Oak Gas sued the city after the Oil and Gas Board of Appeals denied variances the driller sought for a well site , the Town of Flower Mound reported. Red Oak Gas asked for 15 variances from the city's 1,000-foot minimum setback provision. A copy of the Flower Mound Leader's story is here. And read an earlier account of an Oil and Gas Board of Appeals meeting here.

Flower Mound said it has until July 21 to file a response to Red Oaks' June 27 filing in state district court. Town Council will meet July 17 in executive session to consider responses, the city said in a news release. "The Town Council has consistently been supportive of Flower Mound's current oil and gas well drilling ordinance, which attempts to balance the rights of mineral owners and the health, safety and welfare of the community," Mayor Jody A. Smith said in the release.

-- Jim Fuquay

Chesapeake postpones 8th Avenue drilling permit hearing

Chesapeake Energy today asked the city of Fort Worth to postpone a scheduled hearing next week on its request for a drilling permit at the controversial Eighth Avenue site near the Berkeley and Ryan Place neighborhoods. The move came after an hours-long meeting Monday afternoon with representatives of the two affected neighborhoods as well as surrounding neighborhoods and Councilman Joel Burns, who represents the near South Side area. Also present was a representative of William Davis, who owns the proposed drill site, and of urban planning firm Gideon Toal.

Tom Edwards, a gas well inspector for the city, said Chesapeake “just asked us to postpone the hearing. They’re not pulling their request for a permit.” He said Chesapeake did not indicate when it might seek another hearing.

A Chesapeake representative was not immediately available for comment. Because Chesapeake does not have waivers from property owners within the city's 600-foot buffer zone, City Council must approve the company’s drilling permit before it can be issued. A hearing on the permit had been set for July 8.

-- Jim Fuquay

Dale goes after leases in NE Tarrant County

  Here's the full story from S-T staffer David Wethe on Dale Resources' pitch to neighborhood groups in Colleyville, Southlake, North Richland Hills, and Keller for leases. The offer could apply broadly to people in Colleyville and Southlake. Don't have a lease offer from Dale? Read this story to find out more on what you can do to find out if you're eligible.

Here's S-T staffer Adrienne Nettles' story from earlier this week on the Southlake City Council's consideration of changes that would allow drilling closer to homes.

Pictured is a map of drill sites that Dale Resources says Chesapeake has secured in the affected Northeast Tarrant County area. Dale reps handed the map out to neighborhood leaders at a meeting Tuesday night.

-- Scott Nishimura