Barnett Shale Drilling Boosts Local Economy

CBS11TV news ^ | 05.02.05 | Tracy Rowlett

[q_an_a]

everyone has to remember that these jobs are terrible service jobs and are not as good as those jobs at Boeing. They pau OK and the taxes that will fund colleges and the US gov will get spent but these are service jobs in a world that is running out of oil. /posting sarcasm off

[RichardW]

If you own the mineral rights. Just remember that.

[dirtboy]

A shale gas play?

[MeanWestTexan]

Yes. This has not hurt my feelings. The Barnet Shale is also found in Pecos and Reeves Counties. That play is even bigger. Nary an acre to be leased, nor a rig to be found.

Lots and lots of jets in Midland these days.

[Left Coast Refugee]

Is the area around Denton considered over the Barnett Shale? My family owns the mineral rights to about 280 acres were NRG wells are going in as we speak. Am I going to be rich?

[texas_mrs]

My family has a 5,000 acre ranch in Comanche County. They just leased it for drilling to a man that says he has leased over 30,000 acres in this county alone. I know several wells have already come in in Erath County. Looks like the boom is on.

[q_an_a]

5,000 acre ranch - that sounds Texas sized to me. Good luck hope you win big.

[Deaf Smith]

"If you own the mineral rights"

As I understand (heard) about new mineral rights relative to the new technology of horizontal drilling, the mineral rights belong where the well is completed, not where the hydrocarbon was sourced from.

Many people have refused to allow drilling on their property and thus their neighbors reaped the harvest under their lands.

The amazing part is that reports are that about 3000 wells have been completed in three counties since 2003. More are in the plans.

[Dog Gone]

Yeah, it's a fractured shale, sort of like the Austin Chalk play, only it's a shale. Sometimes it's a little silty, so you will get some porosity.

This is a big big play in Texas right now. Oil boom times.

[dirtboy]

How'd they figure out that all that shale had a bunch of recoverable gas?

[muleskinner]

Why hello there cusin!

[richardtavor]

Call Devon in Oklahoma City--they are the largest Barnett players...

[Dog Gone]

Kinda stumbled into it. You'd always get a gas kick when you penetrated the shale on the way to a deeper formation.

But it wasn't until somebody took some cores that they noticed it was fractured pretty consistently. It appeared to be a candidate for a horizontal test to encounter as many of these fractures as possible.

They're not monster wells, but they're pretty consistently 2-3 BCF of reserves apiece, and at today's gas prices, there's no shortage of people who are drilling them as fast as they can.

[rstrahan]

I lucked into some mineral interests there, not getting rich, but it's nice to have a little extra every month. If your land is in west Denton Co, it's likely to have gas. Pretty much stops at I35.

[Left Coast Refugee]

Actually, it is my relatives from Oklahoma City that our handling the leasing out the mineral rights (I think that is the correct terminology) to a third party who is putting in the wells. It might be Devon, but not sure.

We just get a monthly income from the gas produced, and I know the first well that went in, came in and is producing gas, but I haven't heard about the others. I don't even know what kind of income stream such an arrangement of 8 to 10 producing wells could generate, and it goes to my parents first. But that is sort of what I was speculating about; i.e, is the area around Denton over the Barnett Shale, and could those wells produce enough to actually generate some income or is it going to be a pittance?

[Left Coast Refugee]

If you are Cherokee/Choctaw, then you might be a distant cousin, but there are lots of relatives/elders in line above me, so I probably will never see a dime.

[Dog Gone]

They're not going to put 8-10 horizontal wells on a 280 acre tract.

They might put 6 vertical wells, but they would produce in smaller quantities.

The amount you'll ultimately be paid depends on a bit of luck and the terms of the lease. But given the typical amount of reserves recoverable from a 280 acre tract, you're looking at somewhere between $650,000 and a couple million bucks.

[Left Coast Refugee]

Thanks Dog Gone!

I was told that you could only have one well per 40 acres or so, so for 280 it is probably about 7 wells tops. But I do know that the first well hit and is producing gas, and that other wells were going in. I don't get many updates here on the left coast from my OK relatives, I will have to look into that. :)

$650k to $2m isn't chump change though it will be shared across a few decendants (Great Grandfather held mineral rights). Maybe I will see a dime someday. :)

[Dog Gone]

Well, I hope they drill the horizontal well instead of the multiple vertical wells. The recovery rate of the gas is much faster with the horizontal wells, and a million dollars today is worth far more than a million dollars paid out over the next 20 years.

I hope whomever is doing the negotiating over the lease language has some prior experience. If not, get an oil and gas attorney to assist the family. Trust me, I've been involved in this aspect of the oil business for over 25 years and amateurs get hosed.

[rstrahan]

They're doing horizontal drilling, 1 per 40, generates about $2K per month per 40 acre site. They're offering 1/6 interests, not bad. So, 280 acres should generate approximately $14K per month, $160K +/- per year. Not bad.