Twelve D/FW Drilling Finalists Announced

D/FW AIRPORT -- Some of the world's largest energy companies and some of the most prolific in the booming Barnett Shale natural gas field have thrown their hats in the ring to drill for gas at Dallas/Fort Worth Airport.

In a conference room in the basement of the Grand Hyatt DFW, airport executives announced the 12 finalists Wednesday at a networking conference for energy drillers and subcontractors.

The list includes Irving-based Exxon Mobil Corp., Houston-based Shell and Fort Worth-based XTO Energy. Five of the top seven producers in the Barnett Shale are on D/FW's final list.

The group was culled from a pool of more than 60 applicants, said Don O'Bannon, vice president of D/FW's small and emerging business department.

O'Bannon told a packed room of about 160 that the airport is serious about signing a lease with a drilling partnership that is 20 percent owned by a business that is classified as historically disadvantaged or is owned by a minority or a woman.

The attendees included investors, drillers and staffing firms.

The finalists must submit their bids to D/FW by May 8.

Airport officials will try to award the lease by late August or early September, said John Terrell, D/FW's vice president of real estate.

The airport will open all of its 18,076 acres for drilling. Airport executives are expecting to see 120 to 150 wells on the land, but not all at one time.

Just getting access to the expensive wells will be a challenge, experts said. There are about 140 wells operating in the growing Barnett Shale. A rig can cost about $18,000 a day.

About 2 percent of the nation's natural gas comes from the Barnett Shale, which has spread into 14 North Texas counties.

Production has grown almost five-fold in the past six years.

The airport sits on the eastern edge of the gas field.

Based on other deals that have been signed with Tarrant County cities, airport executives are eying as much as $34 million a year in royalties and a perhaps as much as $72 million in a one-time cash bonus at the start of the lease.

That's welcome news to an airport staring at a $35 million budget hole this year. The annual royalty payment could represent about 5 percent of the airport's $600 million budget.

But there's definitely a gamble with all that land up for bid at once, especially for the drilling companies, said Keith Milberger, president of Frisco-based Proven Concepts, which helps landowners sign gas drilling leases.

"In fairness to the oil company, if someone gets one lease for 18,000 acres at D/FW, it's a gamble," Milberger said.

The finalists: Chesapeake Exploration, Oklahoma City; Chief Oil & Gas, Dallas; Dale/Constellation/Parallel, Dallas; Devon Energy Production Co., Oklahoma City; EnCana Oil & Gas, Calgary, Alberta; Encore Acquisition Co., Fort Worth; Harding/Exxon Mobil, Irving; Pioneer Natural Resources USA, Irving; Range Resources Corp., Fort Worth; Shell Exploration & Production, Houston; Williams Production -- Gulf Coast Co., Tulsa; and XTO Energy, Fort Worth.

Staff writer Dan Piller contributed to this report.

Fort Worth Star Telegram


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