What do you think is going to happen when we have the next incident in Fort Worth like that in Forest Hill, a Fort worth suburb, in 2006? Well, let me give you some idea. First, there will be hand wringing at the Fort Worth City Council and dancing about to try to manage the public reaction. "Whoops! Oops! We didn't know! Everyone followed all the rules. This is just an act of God, an unfortunate rare occurrence that nobody could have foreseen!"
Next, the fire marshal will be questioned as to why he did not come before Council and state his concerns about these pipelines being placed so close to houses with pier and beam foundations. The New London School explosion of 1937 will be mentioned.
Next will come the insurance industry with eyes bugged out. "This was forecast. Now it has happened, and the math says it is likely to happen here with a regularity that we cannot afford. Therefore, homeowners in Fort Worth will have to buy an extra rider on their mortgage insurance, and we have calculated the cost of that to be"" (You don't want to know.)
This will result in increased PITI (payment, interest, taxes, and insurance), and many will no longer be able to afford to live in their homes.
Next, the value of homes in Fort Worth will fall, since national publicity of our woes will make homes difficult to sell.
Next, the property taxing authority will see a need to raise taxes because of falling property values and a shrinking population.
Next, Wall Street will get bug eyes and degrade bonds in Tarrant County.
This is what will happen here almost assuredly if the gas drillers have their way.But wait! What about my bonus and royalties?
Did you receive an offer
on your quarter acre lot that included a bonus of $25,000 per acre? 25% royalties? If so and if gas prices average $6/Mcf and
if the Barnett Shale contains 37 trillion cubic feet of gas, then if your lessee
avoids having to pay a secondary bonus you will get a one time bonus of $6,240
and an estimated $208 per year (gross).
At this rate you will get a total of about $12,450 over a 30 year payout
Oh, and remember, that's gross. It doesn't consider income tax and an ad valorem property tax increase due to all that gas you own.
At the present, the gas sales price is about $3.21/Mcf, and the industry cannot sell the amount per month that the previous estimate assumes, so you wouldn't be getting royalties in any significant amount today.
Do you really think the Barnett Shale is the personal bonanza you've been led to believe? Do you think your mineral lease omits material facts that would have convinced you that it was fraudulent and wasn't worth signing? If you think material facts were omitted by the lessee, then your lease is probably fraudulent and unenforceable.
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