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Cashing in on the shale boom
fowler
Residents coming to pick up checks Wednesday night for leasing their oil and gas rights expect fracking to bring big changes to Fowler.
“This is the biggest thing to hit this community in a long time,” said Richard Faber, who was presented with a check for more than $700,000.
Faber and other residents received cashier’s checks at the Fowler Community Center from Shale Investment Fund LLC, which represented Halcon Resources Corp., a Houston-based energy company.
It is good for a lot of the people in this area to get some money, Faber said. He leased 240 acres to Halcon.
Halcon needs to lease at least 640 acres to drill a horizontal well in the Fowler area. If the well is drilled, the royalty money generated will be much larger than the lease bonus payments, he said.
“A lot of people get caught up in the bonuses because that can be big money, but the royalties are the real money,” Faber said.
Frank Donjancic received a check for more than $70,000, but the 95-year-old plans to continue working. Donjancic keeps himself busy by growing a large garden.
The lease payments are going to help a lot of people. Many within the Fowler community have been struggling to get by, Donjancic said.
Hopefully these leases and the resulting drilling will bring jobs, said Anita Goodhart.
“I would like my children to be able to get jobs here and stay here,” she said.
For her family, the check will be a way to pay bills, Goodhart said.
“We’ll be able to pay off some of the things we would have had to borrow to pay,” she said.
Jim Brumbaugh, president and CEO of Shale Investment Fund, said his company wanted to have its check presentation done in public because they want to remove some of the mystery of the process. In addition the company wants to show its commitment to the community.
There’s a lot of “cloak and dagger” actions taken by the oil and gas industry. Halcon wants to keep everything out in the open. Halcon also differs in how much of the land it leases that is actually drilled, he said.
“A company like Chesapeake will only drill on about 6 to 8 percent of the land it has leased. Meanwhile Halcon intends to drill on nearly all the land it invests in,” Brumbaugh said.
Any time steel goes into the ground, the people who signed leases will receive royalties. Those checks will come annually, he said.
The checks that these people are receiving now and royalty payments have the chance to change lives, Brumbaugh said.
“We’ve had meetings like this where ladies have left crying [tears of joy] because they’re two or three years delinquent on their taxes, they might be a couple months behind on their mortgage payments and a few months behind on their credit-card bills,” he said.
The deep-well drillers are doing things companies in the 1970s and 1980s could not dream about, said Troy Mollohan, whose company, Eastern Petroleum, drilled a number of shallow gas wells in the Fowler area in the 1980s.
He is planning to sign deep-drilling leases with Halcon for at least 40 acres and possibly more, he said.
“I haven’t heard anything bad from anyone in the community about this drilling,” Mollohan said. “Everyone I’ve talked to is happy about it.”