Barnett Shale

Exxon not sweating low natural gas prices, XTO investment

Exxon Mobil Corp. doesn't appear to be too worried about its investment in XTO Energy or the future of natural gas, even dry natural gas.

In the company's quarterly earnings conference call with financial analysts Thursday David Rosenthal, Exxon's vice president of investor relations, was asked whether the company might write down the value of the reserves it acquired when it bought Fort Worth-based XTO in June 2010 for $25 billion.

The answer was pretty much, "No." Yes, Rosenthal said, domestic gas production was down and Exxon's was shifting most of its drilling focus in the U.S. to oil and gas fields with lots of potential for producing gas liquids.

"We are managing across the entire portfolio" and continuing to evaluate dry gas fields "while focusing on liquid areas," Rosenthal said.

But Exxon-XTO continues to drill some new dry gas wells to further evaluate and define the boundaries and potential of those fields.

Over the long term, Rosenthal said, Exxon still likes its natural gas holdings because our "outlook is that natural gas prices are not going to remain at this level."

Exxon is continuing to evaluate opportunities for exporting liquefied natural gas from its domestic U.S. fields.

- Bob Cox

More on Glencrest Resources...

Here's David Wethe's story on Glencrest Resources' moves to pay lease bonuses, raise the amount of bonuses it's already signed property owners up to, and extend their lease terms.

-- Scott Nishimura

Briscoe's Glencrest Resources paying bonuses now

Fort Worth developer Leonard Briscoe is now paying out bonus money -- after many property owners have had to wait more than a year for the cash.

Many were initially told they'd have to wait about 30 to 45 days to get the bonus after signing a mineral-rights lease.

The delay was caused by Briscoe looking for enough financing to pay out the bonuses and continue on with plans for drilling.

He said his Glencrest Resources company has signed about 3,600 leases in Fort Worth's Glencrest and Everman neighborhoods, as well in the nearby towns of Forest Hill and Mansfield.

Of that, Briscoe estimates his company has paid out about 1/3 of those, or roughly 1,200 property owners.

And the money has gotten better, he said.

Bonus payments have risen to $6,500 an acre, from $3,000 when many property owners originally signed around the end of 2006 and early 2007.

Briscoe is not saying how much financing he's secured or where it's from.

But Josie Brooks, who had originally been frustrated by not getting her bonus money, said she received a check for $2,925 and she was "really satisfied" with the money.

We'll have more on this in Wednesday's Star-Telegram.

--David Wethe

Glencrest saga may be coming to a head

The lengthy Barnett Shale chapter on Glencrest Resources hasn't met its end yet. In Wednesday's Work & Money section, S-T staffer Jim Fuquay updates property owners' efforts to get out of the leases they signed more than a year ago, but still haven't received signing bonuses on.

Here's the top of Jim's story:

After waiting more than a year for her bonus check after signing mineral rights leases with Glencrest Resources, Reva Campbell was all ears when Dale Property called about leasing her properties.

But after reviewing the five parcels she owns, Dale had mixed news for the Forest Hill resident.

“Dale called back and said Glencrest had filed four leases," Campbell said. "But I had one property they didn’t file, and they signed me on that one."

Campbell is one of the thousands of homeowners who signed mineral rights leases more than a year ago with Glencrest Resources and has still not received a signing bonus. They are looking for a way out, and now it appears that a few have made some headway. The turnaround may be a further indication of the competitive nature of the field and an indication that the issue of the unpaid Glencrest leases may be coming to a head.

Rosa Yaites said that when Dale offered late last year to review her lease, she accepted, although she says she had signed with Glencrest. But she ended up signing a lease with Dale, anyway. She was told by Dale representatives that their review showed there was not an existing mineral rights lease covering her property, she said.

Like Campbell, Yaites said Dale paid her a $750 signing bonus, the same Glencrest promised but never paid.

UPDATE! Click here to read the full report.

-- Scott Nishimura

S-T Shale coverage wins FWWeekly Turkey Award

The annual Fort Worth Weekly Turkey Awards are out, and the Barnett Shale was the big thread that ran through several of the awards.

First, the basis for the awards, according to FWWeekly: "How to recognize Turkeys when they are picking your pocket, stealing your future, and generally leaving their droppings all over the civic landscape."

Some of this year's award winners:

David Williams (we guess this is the former sheriff) Memorial Big Bird: Urban gas drilling. The FWWeekly takes us through a fictional dialogue between homeowners Ethyl and Tex, in which they announce their signing bonus paid for a radio and porch swing, and their monthly royalty checks "ought to buy a new spittoon and...armadillo-shaped wind chime." Then, to their surprise, a "40-foot tall mutant mosquito carrying a giant straw descends from the sky and heads directly for Tex and Ethyl. Behind it are more swarms just like it." Tex: "My gawd! This ain't want we bargained for!" Ethyl: "Call the Texas Railroad Commission! The environmental commission! The Fort Worth City Council!" Laugh track, laugh track, laugh track.

Fort Worth Mayor Mike Moncrief, for his handling of a citizens committee formed to make recommendations to the city on what to do with the big money it's making off the Barnett Shale.

Fort Worth City Councilman Danny Scarth, for serving on the committee that wrote the city's gas drilling ordinance and also accepting campaign contributions from gas interests in his first campaign. FWWeekly also took issue with Scarth's late payment of property taxes.

Star-Telegram and gas drilling. "The city's daily newspaper has celebrated gas drilling from the outset of the Barnett Shale phenomenon," FWWeekly says, citing "nauseating" and "gushing" editorials, and Bud Kennedy's column on the Trinity Trees dispute. The FWWeekly also suggests the S-T's news coverage might be colored by "how much Barnett Shale money is making its way to the Star-T's bank account, either through advertisements or from drilling royalties from its properties." FWWeekly says the S-T has acted as an "uncritical apologist" for the gas industry. "Recently, however," FWWeekly says, "the newspaper has begun offering a little more balance in its coverage and on its blog site devoted to the Barnett. So, in the spirit of the day, we give thanks for small wonders."

Leonard Briscoe Sr. and "Questionable Deals" through his Glencrest Resources.

Mayor Moncrief II. The mayor has substantial energy investments, and his most recently reported earnings included income from Chesapeake Energy. He says he doesn't view his investments as a conflict of interest. The FWWeekly says it is a conflict.

-- Scott

(Photo: S-T of a turkey)

Class-action status sought for Glencrest lawsuit

The mineral-rights leasing boom in the Barnett Shale produced its first potential class-action lawsuit Tuesday when a Fort Worth lawyer sued Leonard Briscoe Sr. and his company, Glencrest Resources, over hundreds of promised lease bonuses that allegedly have never been paid.

Attorney John Hart said he will seek class-action status on the grounds that as many as 2,500 landowners may be involved in the dispute, which extends over nearly a year. According to the suit, Briscoe and Glencrest told plaintiff Pamela Ellis, a Fort Worth resident, and other homeowners at a Dec. 5 meeting that they would be paid a signing bonus within 30 to 45 days of agreeing to the lease. Despite numerous telephone calls to Glencrest, "to date, defendants have not paid plaintiff the promised bonus," according to the suit.

Briscoe, a Fort Worth developer, could not be reached Tuesday for comment. Calls over two days to Glencrest Resources went unanswered, and Briscoe's personal phone number would not accept additional voice messages.

In May, the Star-Telegram reported that a number of landowners in Mansfield, Forest Hill and Fort Worth complained that they had not received bonus payments from Glencrest. At the time, Briscoe said he was raising money to finance Glencrest, a startup company, and expected to have the money by June. In July, Briscoe told the newspaper that he still hoped to raise $60 million and was hiring a drilling consultant.

Suit welcomed

Samuel Solis of Forest Hill, who said he signed a lease with Glencrest in January, said he was glad to hear of the suit. "I sent letters. They were never answered," Solis said Tuesday. "I'm glad they filed the suit. I want to join that."

Grace Winston of Mansfield signed a lease with Glencrest in November and was also willing to join a lawsuit. "I've waited a long time," she said. She said she hasn't tried to lease her property to another drilling company because "I didn't know if I could."

Hart said a mineral-rights lease is a legal document that can't simply be dismissed. A property owner might be tempted to ignore the lease, "but the legitimate oil companies are concerned about it and are staying away" from Glencrest leases, he said. He said he has seen a few property owners sign a second lease, called a top lease, with another driller, who would gain the lease if the original lease were terminated. But that is an unusual situation, he said.

Glencrest Resources has filed 100 mineral-rights leases with Tarrant County, according to records. In addition, Briscoe has said he filed a memorandum of lease with hundreds of additional names. In all, he has said, Glencrest has signed about 3,000 leases.

Tougher Texas law

Hart said he is seeking to rescind, or cancel, those leases for lack of payment of the promised bonus. Although Texas has made it harder in recent years to file class-action suits, "We think this is the sort of circumstance contemplated by the rules," he said. Class-action suits can take years to conclude, but Hart said he intends to press for a hearing by early December.

Mineral-rights expert John Baen of the University of North Texas said that given the money at stake in the Barnett Shale, "I am just amazed how few lawsuits there have been. The record is really pretty good." He said a class-action lawsuit is probably an appropriate way to try to resolve the Glencrest leases.

TO JOIN THE SUIT

Homeowners who signed leases with Glencrest Resources may be eligible to join a lawsuit seeking to throw out the leases. Contact John Hart at johnhart@hartlaw.com or 817-870-2102.

Lawyer seeks Glencrest Resources lease signers

Fort Worth lawyer John Hart placed an ad in Sunday's Star-Telegram seeking landowners who signed leases with Glencrest Resources, which says it has signed thousands of mineral rights leases in Tarrant County. [Click here to read the background.]Download glencrest.doc

Hart on Monday said none of those landowners has been paid a promised signing bonus and is preparing to go to court to get the leases rescinded. He said he has been contacted by a number of homeowners unhappy with Glencrest, organized by Fort Worth developer Leonard Briscoe Sr. The Star-Telegram has previously reported Briscoe's problems raising the money he needs to make good on the bonuses, which offered a minimum bonus of $750 per residential lot and a 25 percent royalty. Those terms were among the best reported when Glencrest launched its efforts about a year ago, but have been eclipsed recently as competition for remaining leases has escalated. Phone calls to Glencrest's office went unanswered Monday. A recording at Briscoe's personal phone said the company is establishing a call center and asks property owners to be patient.

-- Jim