A citizen's group that opposes the city of Southlake's current drilling ordinance failed to get enough signatures to let residents vote in November on a new ordinance that would be less restrictive. The story is here.
Last year, XTO Energy and Chesapeake Energy abandoned efforts to drill in Southlake after City Council rejected one permit request and another drew a lawsuit. Now, Southlake Citizens for Property Rights, wants changes to the city's drilling ordinance that would make it easier for producers to get permits. Read the Star-Telegram's report on the group here.
Southlake’s first gas well was tabled by the City Council for the second time in two months at 12:45 a.m. Wednesday. The council will continue the public hearing for the third time at its Feb. 1 meeting. Last year, XTO Energy applied to drill up to 18 gas wells on the 52-acre Milner ranch at 651 E. Highland St. between White Chapel Boulevard and Texas 114. The proposed 2.75-acre pad site is 380 feet from Highland Street. On Tuesday and on into Wednesday morning, City Council members asked questions and negotiated with Walter Dueease, senior regulatory affairs coordinator for XTO, on the details of the application.
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:
Here's a look at a couple items about Chesapeake Energy that popped in the Star-Telegram over the weekend.
S-T reporter Jim Fuquay takes a look at how the Oklahoma City-based driller has grown over the years, from 75 cents about eight years ago to today's price of $55.94. Check that story here.
And on Saturday, the Star-Telegram reported that Chesapeake is threatening to focus its drilling efforts away from the Northeast Tarrant County town of Southlake because of its new drilling ordinance that creates a 1,000-foot buffer. City officials responded that Chesapeake is only taking the strictest reading of the ordinance and that the city council will consider variances. Check out the story here.
The group in Southlake known as the White Chapel Corridor has recently merged with several other groups in its area to put together a total of about 3,000 acres for negotiating purposes with drilling companies.
The groups joining White Chapel are the Southlake East Corridor and several other more or less unnamed neighborhoods, according to a release recently put out.
The groups have agreed on a "common lease" that has been sent out to competing drilling companies. The groups have a standing offer from Chespapeake Energy for a bonus of $17,000 per acre, while XTO Energy has not made an actual bonus offer but has committed to not be outbid in the market, according to White Chapel's release.
Here's a link to the group's website.
"The lease encourages gas companies to move forward quickly and (to) completely develop the area," according to the release. "It places strict parameters on noise and visual appearance while giving the company the flexibility they need to develop the minerals."
Just when you thought the competition between Chesapeake Energy and XTO Energy couldn't get any hotter, it takes a new turn.
This time it's in Southlake and involves the Carroll Independent School District.
Fort Worth-based XTO has donated $50,000 to the Carroll Education Foundation, according to our education reporter Jessamy Brown. And it's the largest donation in the history of the 12-year-old organization, Brown discovered.
To make things more interesting, XTO rival Chesapeake has the lease to drill for natural gas under all 402 acres owned by the Carroll school district.
The foundation is a non-profit set up to raise money and donate it to the Carroll school district when needed.
The donation, which was made earlier this week without any fanfair, will make XTO the "presenting sponsor" of the foundation's annual fundraiser later this year, called the Culinary Celebration.
"We have never been gifted this much," Kacy Hankins, the foundation's executive director, told Brown today. "It was not solicited."
For further background, keep in mind that Chesapeake recently announced that it would donate $1 million to the United Way to establish the Barnett Shale Endowment Fund. That same day, the YMCA rushed out a press release saying that XTO was donating $500,000 to help modernize and expand its workout space.
And for one more layer of intrigue, both companies are heavily competing for the hearts and minds of property owners in Southlake and Colleyville and elsewhere in Northeast Tarrant County. Chesapeake, through its land representative Dale Resources, offered thousands of property owners in Northeast Tarrant a bonus of $17,000. XTO, through its rep Colt Exploration, quickly topped that with an offer for $18,500 per acre.
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.
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.
Dale Resources made an unusual and far-flung pitch last night to lease mineral rights for about 5,000 acres in Northeast Tarrant County.
The offer is for a bonus of $17,000 an acre and a 25 percent royalty. The lease term is for three years and an option for a two-year renewal.
The offer was made to a packed room full of about 40 community leaders from Colleyville, Southlake, and parts of North Richland Hills and Keller. As neighborhood group leaders and HOA presidents spilled out of the small conference room at the Southlake Hilton after the meeting, at least one expressed intrigue and possible interest in the offer.
Michael Muhm, leader of the Pool Road Coalition, called the offer "very interesting." He said XTO Energy has a competing offer out to property owners in his group's area for a bonus of roughly $12,500 an acre. But he said his group is looking at not only the best dollar amount but who would also be the best drilling company for property owners to partner with, and he said Chesapeake is looking strong.
Dale has also proposed 11 signing dates throughout the month of May in Colleyville.
Dale officials said the offer is good for anyone living in a large swath of northeast Tarrant, mainly southwest of 114. But the land company also did say that if there was not enough people that started signing, the offer could go down. A deadline date was not given for how long the offer would be good for.
Stay tuned to this space for more updates, and to the S-T print edition Thursday for a full story. We're trying to get a handle on who was in the room Tuesday night, and how broad the area is that we're talking about.
Grady Walker, a spokesperson for CAMRA, said the group includes about 1,000 acres, some of which spill over into Southlake as well. Dale Resources and Petrocasa Energy have a total about six well sites that would touch the homes within CAMRA, Walker said.