Neighborhoods, gas companies take sides By Jim Fuquay

Credit:  Star-Telegram staff writer Wednesday,May 9, 2007

FORT WORTH - For months, neighborhood associations south and southwest of downtown Fort Worth have been talking with drilling companies interested in gaining leases to drill for natural gas. They aim to work together to create a standard lease that has favorable financial terms and addresses safety and quality-of-life issues particular to their urban setting.

Then about two weeks ago, some residents in Ryan Place received postcards inviting them to a "lease signing party" at a local restaurant. The cards were mailed by Petroleum Land Services, which is working for Four Sevens Resources of Fort Worth.

That doesn’t sit well with Dan Roberts, president of the Ryan Place Improvement Association. About five months ago, he said, his association formed a committee to handle leasing talks with the drillers, and during that time, it’s been made clear that any leasing efforts should go through the committee.

"We’ve been in a lot of discussions with these guys. They know exactly what we’re doing," he said of PLS and other leasing companies. "We’ve set up a notice on our Web site asking people not to sign up. If they are going to aggressively seek signatures outside the neighborhood effort, we’ll change our approach. We’ll be more aggressive in our demands."

Rogers Gideon, crew chief for Petroleum Land Services, said one of his leasing teams came up with the party idea. While he says he’s willing to work with the neighborhood groups, "even if the neighborhood association comes up with its ideal, and even if it’s acceptable, you can’t wait," he said. "It’ll never get done."

He said he has made good offers to area property owners, "and we’re going to continue to get as many leases as we can get."

As drilling for natural gas moves into more densely populated areas, so do the opportunities for conflict between homeowners and drillers. As a result, many neighborhood associations are taking the lead in negotiating lease terms for their members, including financial terms, limits on noise, drilling sites and cash for the associations themselves.

Typical lease offers include bonuses of about $500 per lot and a royalty rate of about 25 percent. But individual offers vary - and there is room to negotiate.

Neighborhood associations in Oakhurst and Bluebonnet Hills have gotten cash payments for coordinating the leasing process or when milestones were attained.

Fixing a problem for one neighborhood without creating problems for another is what representatives of neighborhood associations in Ryan Place, Berkeley Place and Mistletoe Heights say they are trying to do. Those neighborhoods all are between Hemphill, University, Rosedale and Berry streets.

They are trying to avoid the experience of the nearby Fairmount neighborhood, which has been leased mostly lot by lot, largely because of a relatively high percentage of rental properties.

"Fairmount was overtaken before we were ready," said Fred Harper, president of the Fairmount association, which includes about 1,600 households. "I have a feeling 70 or 80 percent have signed a lease agreement."

The joint effort to negotiate common lease terms has grown to include 10 neighborhood groups, said Bill Conley, chairman of the Ryan Place committee dealing with the issue. In three meetings, he said, residents and leaders have created a "wish list of key concerns" to be addressed.

Drillers don’t have to work with the associations, but with close to 4,800 homes and 1,000 acres in the network, he said, "it’s a stronger voice. It will help us if we ever have to go to City Hall" to resolve disputes.

That’s OK with C.W. "Dub" Stocker, head of Fort Worth Energy, a relatively new operator that has opened an office at 601 Magnolia Ave. His company has signed scores of leases - and gave $10,000 to the Worth Heights Elementary parent-teacher organization - in the Worth Heights neighborhood, between Interstate 35W and Hemphill Street south of Berry Street, and has issued an open invitation to homeowners to come to its office.

Some homeowners said they regard that as just another tactic to gain signatures on leases. But for now, Stocker says he’s happy to wait to deal with the Ryan Place, Mistletoe Heights and Berkeley neighborhood associations.

"They want to lease as a block, and we’re trying to be respectful of that," Stocker said."

Homeowners and lease companies alike seem to agree that there have been few leases signed in Ryan Place, Berkeley Place and Mistletoe Heights.

"They’re at about zero. Well, under 10 percent," Gideon said.

All of the maneuvering assumes that some sort of lease is inevitable. But Ryan Place resident and lawyer Liane Janovsky says that’s not the way to think about it. The best deal, she said, might well be no deal, and she’s organizing like-minded residents.

"Some of us feel there is no way this can take place and not be adverse to our quality of life and safety," Janovsky said.

Mike Windsor, a Fort Worth lawyer and member of the Mistletoe Heights As- sociation group handling leasing issues, said the opponents are likely a sizable group.

"There are residents in my neighborhood who flat will not sign a lease, peri- od," Windsor said. Many re- sidents of his and near- by neighborhoods, he said, "are more affluent, better educated. There’s more owner-occupied houses. They moved into those neighborhoods for quality of life."

Principal among the concerns is the location of the drill sites. All the homeowner groups said the only site they’ve been informed of is the Fort Worth & Western Railroad land west of Eighth Avenue at Elizabeth Boulevard.

While Four Sevens has obtained access to railway right of way running south to a large pipeline near Cleburne, making the Eighth Avenue site well-positioned for a pipeline, the property is less than 600 feet from existing houses. That means the site would have to be granted a special high-impact drilling permit, a process one leasing agent predicted "will go to the mat" in what will likely be a long fight.

Gideon, the leasing agent, said it would help if the neighborhoods produced something in black and white.

"No one has come back to us and given us a list of concerns to meet," he said. "It’s all generalities. Put it down. It’s been five months, and we do not have a counteroffer."

Conley said "I think we’re no more than 60 days" from doing just that, and he said he resents stepped-up efforts to get leases signed.

"They know the neighborhoods are working together, and they’re trying to make an end run," he said. "But now we’re organized."

What the neighborhoods want

The best financial terms

Inoffensive drilling sites

Noise and lighting limits

Donations to parks or neighborhood associations

Some members don’t want any leasing - or drilling

How the leasing companies are responding

After 100 households signed leases in the Bluebonnet Hills neighborhood, the association was given a check for $7,500 for its Worth Hills Park improvement fund.

Dale Resources gave the Oakhurst Neighborhood Association $25,000 after it publicized the leasing activity.

Some are going door to door or holding lease-signing parties to sign up individuals.

Source: Star-Telegram research     Jim Fuquay