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In summer 2008, Jesus Alvarado Jr. of Arlington had a chance to sign a natural gas drilling lease with a bonus of $5,000 per acre.
"Everybody back then was saying, 'Let's hold off; it will get better.' ... I just held off," he said.In ensuing months, natural gas prices plunged. Some energy companies rescinded big-bucks offers to neighborhood groups that called for bonuses of $25,000 to $30,000 per acre and a royalty of 25 percent or more. Drilling and leasing activity plummeted.This year, Alvarado has been offered a lease bonus of $3,000 per acre and a royalty of 20 percent for his residence in Arlington and $2,000 per acre and a 25 percent royalty for a rental property he owns in Haltom City. He's had difficulty determining what constitutes a good offer in today's subdued leasing market."I'm looking for information, but everybody seems to have gone to bed on this since the frenzy died down," said Alvarado, a quality assurance consultant to manufacturers.He isn't alone in his uncertainty. Many residents in Tarrant County and surrounding areas that overlay North Texas' natural gas-rich Barnett Shale are pondering whether to sign or renew a gas lease.Leasing roller coasterExceptionally high natural gas prices led to a Barnett leasing boom in 2008, when 152,285 leases were filed at the Tarrant County clerk's office. That number plummeted to 35,167 in 2009, less than one-quarter the 2008 total.There's considerable speculation, however, that leasing activity will rebound at least moderately this year, especially if gas prices rise. Prices soared above $13.50 per 1,000 cubic feet in July 2008, sank below $2.50 at one point in 2009 and closed Friday at $5.52 in futures trading on the New York Mercantile Exchange.Energy companies say they need stable prices of $6 to $8 to increase drilling significantly. Higher prices often generate an uptick in leasing. Seventy-eight rigs were drilling in the Barnett on Friday , according to RigData. That's far below the peak of 214 active rigs in October 2008.Mark Caffey, CEO of Caffey Group Llc., a Fort Worth-based leasing firm, forecasts a marked increase this year in leasing in the "Barnett core," the areas -- including much of Tarrant County -- that generally have the biggest-producing gas wells. He said his firm has 86 leasing agents in the Barnett, "and we just hired another 10."Will Brackett, managing editor of the Powell Barnett Shale Newsletter, also said "leasing activity is picking up again" after the deep downturn in 2009.Chesapeake ramping upOklahoma City-based Chesapeake Energy, a prolific Barnett driller and gas producer with a large regional office in Fort Worth, plans to ramp up leasing and drilling this year after closing a $2.25 billion deal with French oil giant Total S.A. that will provide Chesapeake a potent cash infusion for its Barnett operations.In the company's online Barnett Bulletin, Chesapeake said it "has already begun hiring contract leasing agents, with as many as 300 new positions to be filled in the coming months."
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