Dithering Inside an Addison Dealmaking Expo For Oilmen, Where It's a Shale of a Good Time

Categories: Development

PLS.jpg
Haven't you heard? There's gas in them thar shale formations. And if the parking lot outside of the Intercontinental Hotel in Addison was any indication this morning, a goodly number of the players are in town, looking to make fat deals. You could tell because parking was spilling out into the gravel overflow lot across the street, and every other vehicle was a $40,000 to $50,000 4x4 with a custom steel bumper and grill guard. By looking at their trucks, you might even guess what rung they occupied on the fossil fuel ladder. Some looked like they'd just come off a caliche backroad. Producers maybe? The guys developing the lease, hoping to entice "the big fish with deep pockets," like Exxon.

But other 4x4s had that showroom gleam. The money men, perhaps? The capital-raising middle men looking for the leaseholder who just needs a bump.

Yeah, they were all in attendance at PLS' Summer Dealmakers Prospect and Property Expo, where "oil and gas operators, prospect generators and property buyers" come together and get rich. Hell, I could have tossed my (figurative) reporter's hat and picked up a dealmaker's fee that probably dwarfs my yearly salary just by introducing Eagle Ford Shale lease-holding Joe Developer to Jimmy Capital, who's got some investment money burning a hole in his pocket. You could almost smell the cash.

And by the way, if Eagle Ford doesn't mean anything to you, it should. It's the next Barnett Shale, and it stretches from the Mexican border deep into East Texas. Everyone here was buzzing about the big EF.

Take Max Smith over at Slate Holdings. He wore a dapper, gray suit with black snakeskin loafers, and one of his cheeks was slightly concave. He says he's leased a million acres in the Barnett and operates 120 wells. He started out as a roughneck on a derrick. Now look at him.

The pessimists have been telling him for years that Texas is all played out. Then dendritic fracturing comes along, and all those played-out wells come back to life. Gas prices go up and, lookie, we're rich again. And then the Eagle Ford is discovered, and it's a three-tiered play with limitless possibilities. You've got oil, oil-gas condensate, and then you've got dry gas. From 6,000 feet to 20,000 feet, he said, it's fair game.

But as I strolled the crowded corridors between the industry booths and their petroleum-preaching buskers, I noticed they weren't all colorful, old-school types who got their starts as grit-eating roustabouts. There were preppy young finance bucks aplenty, their smooth skin untroubled by a past spent in the Permian sun. They hailed from all manner of LLC, invariably with the word "investment" somewhere in the company name. After all, money's what makes the world go round, and it's the money that puts holes in the ground.

And it's just lying around all over the place, waiting for someone to pick it up, from what I heard. Hanes Chatham, for example, had a cutting-horse business in Fort Worth. The lanky Texan, who wore a black felt hat, an off-white blazer and pale leather boots, saw an opportunity. The Barnett was picking up, and it just so happened that he knew all the ranchers sitting atop suddenly lucrative real estate. Connections were forged, deals were cut, and suddenly Chatham is an old-school landman, relying more on knowledge of the countryside and personal relationships than hyper-technical knowledge of the shale.

The point is, there's a boom on, folks. Get on it while the gettin's still good.


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28 comments
Marc
Marc

What is really interesting is how deperate the pro-drilling group is. They realize that they are getting their asses kicked every day. More regulations, more accountability, more limitations, more fines, more prohibitions and a more educated general public are working against fossil fuel producers. It infuriates them. They cannot make a compelling argument for drilling based upon science and fact, so they resort to ad hom attacks and manufactured "evidence" to defend the indefensible.

Guys like Edgar, GusMitchem and bigiron pretend to know what they are talking about when they actually have very limited (at best) knowledge and understanding about this issue. If they would do some research (and have the ability to comprehend it), then they would see why some people are concerned about permanently polluting water, polluting air, contaminating soil, fracturing near dams and roadways, or doing ANY drilling near residential neighborhoods.

Personally, I get a kick out of their responses because they show themselves for what they really are - people who defend positions they do not even understand just for the sake of an argument. They NEVER cite ANY scientific evidence to back their claims. They just lob ad homs, and then get pissed when somebody does it right back at them. They are incapable of presenting a valid argument based in science and fact because they do not understand or believe in science. To them, it is witchcraft - the stuff of tree-hugging, liberal environmentalists.

Here is a clue for you guys - without people defending the environment morons like you would already be dead of pollution. You ought to be thankful that some people have the comprehension and the heart to study these matters and be involved for the sake of you and your families.

And, to the bullshit notion that we are a bunch of people who do not own minerals, let me just add that several among us hold large mineral leases, some have gas drilling agreements on their property and others own stock in major oil and gas companaies like ExxonMobil, Texaco and Shell. We actually find it possible to see both sides of the issue and to speak up when one side is out of line, even if we do have a vested interest against which we are speaking. It is called "integrity", and you ought to try getting some before engaging in arguments about things you do know understand.

SteveT
SteveT

Using the word "limitless" with fossil fuel deposits is misleading, as they are, on the human time-scale, at leaste, finite; and further limited when by the costs of exploring for, extracting, transporting, refining, and using them.  As with all finite and slow-to-renew resources that are in constant demand, "development" equals "depletion."

Marc
Marc

Apparently, the point is beyond your comprehension.

Bigiron
Bigiron

Don't ya love it when class warfare combines with junk science to create a steaming pile of BS?  Somehow I'll bet that all of the folks against fracking don't have any oil interests in the shale zones.  And isn't it amazing that areas that had crude in pools on the surface (when the area was first settled) and gas bubbling through the aquifers for eons, have just discovered that there is some nat gas in their water???  Man, what do they teach in schools nowadays?  Oil and gas are as natural as rain folks.  And there has been water contaminated by both for as long as the earth has existed.  Hint, you can't destroy water.  You can change it's form, and you can get it dirty, and you can clean it up.  But you can't destroy it.  Amazing chemical that water is eh?  Drill!!!

BHargrove
BHargrove

@Steve - The intent of the article was not to demonize the industry. This was actually pretty straight-faced stuff, though I think you can tell I enjoyed myself and had a little fun with the telling. That's not snark. So where's the big burn I've supposedly lobbed? On a sidenote, my dad works in the industry. Take that for what it's worth.

Darrd2010
Darrd2010

LOL. Nobody ever gets to the heart and soul of the matter on this topic. You will get very few arguments that using shale gas as an energy source for some things is a bad thing. Never said it, never will. The big controversey is how they GET THE GAS in a safe and less harmful manner. SOME companies(very few) practice the ultimate safe methods of exploration(green completion, vapor recovery units) Many companies choose not to do that since it is not required by the feds or the state. Wonder why? The exploration of gas with direct drilling has been practiced for decades out in the boondocks away from most people and that is why you rarely heard of any consequences. But not until the 2000's when the method of horizontal drilling, combined with circumvention of federal laws did it begin to rear it's ugly head and now we have all these different issues coming up. Do shale gas power plants burn cleaner? yes. It takes about 15 years to get it built. Do service fleets burn cleaner? yes. But they have specific fueling stations. You will never see the family car fueled by shale gas. You will never see shale gas stations on the corner with a Shell or Mobil sign.  As of today, the City of Dallas has no gas pipeline ordinance. Now think about that.

DoubleOJoe
DoubleOJoe

No, oil and gas not bad.  But doing severe damage to the environment and ourselves in pursuit of oil and gas bad. 

The point is that we can't depend on the companies extracting the gas to tell us that the process and equipment are safe.  Companies in the business of making money have an unfortunate track record of saying whatever they can in order to continue making money, even if the end results are dangerous and sub-par.  For once, can we not abrogate our responsibilities to the profit-makers and just perform some due diligence?

Human Being
Human Being

What exactly is the point of this article, other than to provide a forum for people to bash an industry the vast majority of them know little to nothing about? Is the Observer suddenly going to provide useful or even thoughtful information on business, energy, engineering or finance? No.

Bigjondaniel
Bigjondaniel

Dallas is a rich man with a death wish in his eyeA steel and concrete soul with a warm hearted love disguiseA rich man who tends to believe in his own liesDallas is a rich man with a death wish in his eyes

RJ
RJ

"where "oil and gas operators, prospect generators and property buyers" come together and get rich". If it were that easy Neiman's would be cleaned out. Ever heard of dry holes, flim-flam men or the 80s?

Darrd2010
Darrd2010

Yee Haw! We're making deals done here and killing the environment at the same time. Come on down to Addison and hitch up to a 'deal with the devil" Yeeeeeee Haww!

DoubleOJoe
DoubleOJoe

"you can't destroy water."

Funny, electrolysis seems to disagree with that statement. 

Marc
Marc

You are the one in dire need of education. Everything you said is pure bullshit! I will pit my personal knowledge of this subject against yours any day and win by a mile. Your understand of geology and chemistry would fill a very small thimble.

You CANNOT clean up and reuse frac water. That is precisely why it is pumped deep into the Ellenberger formation where it is forever removed from the hydrologic cycle.

The EPA has done finger print tests on the gas that appeared in the water well of the Lipskys in Parker County and found the gas in their well to contain the exact same chemical contamination that was injected into the Range Resources frac'ed gas well nearby when no such contamination had EVER been found prior to frac'ing.

I do apologize for using scientific fact and techinical terms - I realize these may be far over your head.

GusMitchem
GusMitchem

You ever benn to South Texas not much environment down there to destroy, and even if there was there isnt anyone down there to notice! The Bay Area it aint. Eveyone down there is happy to have the $$$ and jobs and Im sure your still driving a car and using electricty.

Marc
Marc

Preach on, brother! The shale gas game is NOT about selling gas. It is about selling gas companies. As Dr. Marc Durand, a professor of geological engineering at the University of Quebec at Montreal said, the early players will build up companies by getting lease agreements on land in the shale gas play, and then sell their companies to investors looking to get rich off production. By the time it is discovered that there is not really as much recoverable gas as has been touted the first players will be living high on the hog in the Bahamas while the guys who bought their companies as investments take the hit on the chin and lose their money.

It continues to be the same shell game that flim-flam men have always played. The only thing that has changed is the name of the game.

Steve
Steve

Agreed, it's so entertaining to demonize local oil and gas operators. So, Brantley, what's your solution? Should we continue to import from the Middle East? Should we go all nuclear? I'm assuming you're running your AC in this ridiculous heat. Are you running all solar and riding your bike to work? If you can provide me with a viable alternative, I'll let you bitch all you'd like...

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Edgar
Edgar

God, you're such an insufferable prick, Marc.

GusMitchem
GusMitchem

Everything is BS? Im with bigiron that the first line of his statement is correct 100% and thre are companies that are recycling and purifing the water used in drilling and yes they are making tons of money too

DoubleOJoe
DoubleOJoe

Yes, I drive.  Yes, I use electricity.  Why is this the default response to a request for responsibility or reconsideration of our methods of resource gathering?

I also don't gun the engine off the line, or leave my AC turned down to 75 during the day when I'm not home.  The whole point of environmentalism is to learn to be responsible with what we use, and to minimize our impact on the natural world and ourselves.  That extends to how we exploit the resources that we use.

GusMitchem
GusMitchem

That happens in every business think about the internet boom, gaming companies, green companies, the stock market.  Some of the risk takers get rewarded handsomly, some get burned. Entrepenures mostly dont run companies well, and people that run companies well are very good entrepeneurs

Marc
Marc

Get a life, Steve. That lie about us "importing from the Middle East" has been laid to rest by the US Energy Information Administration. The two countries that make up the bulk of US imports are Canada and Mexico. Did you fail geography? Those are not in the Middle East. All the "Middle East" energy combined that arrives in America is a small fraction of what we get from other sources far removed from the "Middle East."

Under the Carter adminsitration we were well on our way to alternative energy development. Upon the election of that fool Reagan, who was already braindead by the time he won the election, all funding to alternative energy development was killed by campaign money from the O&G industry so that they could continue manipulating markets and prices for their own enrichment.

Sooner or later, we MUST make the transition, and that start should begin YESTERDAY! But, one has to either be a liar or a fool to claim that we are getting our energy from the Middle East when that is NOT supported by fact!

Bigjondaniel
Bigjondaniel

Oil addiction is an addiction through and through. Saying that it's better to get the opiates from poppy farms in the US is better than from ones in Afghanistan is not really the point. And do you really expect people to believe that everything is so safe and wonderful?  Because the petro-chemical business has such a great track record of being truthful? It's more offensive that you expect me to believe yuor bullshit that then bullshit itself.

Edgar
Edgar

“Apparently, the point is beyond your comprehension.”

“Get a life, Steve.”

“Your understand of geology and chemistry would fill a very smallthimble.”

“Gus, you are full of shit!”

“…the Ellenberger formation. Do you even know what that is?”

“You ought to be thankful that some people have the comprehensionand the heart to study these matters and be involved for the sake of you andyour families.”

I repeat: You are an insufferable, self-righteous prick.  We're all tired of your dismissive attitude, your contempt for those who dare question the daily distortions of fact made by people like you, and your unfettered arrogance.  You're doing your own cause a disservice.

Marc
Marc

Edgar, SUCK IT!

Marc
Marc

Gus, you are full of shit! If you knew the truth (perhaps you do, but just choose to lie about it anyway) then we would not be seeing all that water pumped down into the Ellenberger formation. Do you even know what that is? Do you actually know ANYTHING about this industry and how it operates? From your comments it would appear that your knowledge is zero and your emotion is all you have.

This has ZERO to do with class warfare. The warfare pits we who believe that clean water and clean air are absolutely essential to life on earth against idiots who believe you can use up and pollute the planet for momentary profits at the expense of everybody else.

GusMitchem
GusMitchem

Logically speaking, Yes its better because local folks get the money and they turn that money in our economy.

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