A News 8 investigation into non-payment of royalties in the Barnett Shale Thursday night is spawning new complaints.
More property owners are coming forward telling News 8 they also have yet to see their first royalty check. Some say it's no accident, that exploration companies have over-drilled to the point that the Barnett Shale boom has gone bust.
With the advent of fracking and fifty years of potential reserves, natural gas was going to be gift that would keep giving for a lifetime. Yet some royalty owners, like Versie Brown of Fort Worth, have yet to see a dime.
"I haven’t received any money, and I haven't heard from anybody,” Brown said.
Chesapeake Energy said it is working to get Brown and others the money they are owed. Chesapeake officials say not all of the mineral owners have been verified or located.
But Chesapeake Energy, one of the biggest drilling companies in the Barnett Shale, is in a financial hole.
Forced last month to sell $7 billion in holdings, Chesapeake has lost about $9 billion in market value. Four years ago, Chesapeake ha 40 rigs operating in the Barnett Shale. Today, it has two.
Deborah Rogers of Fort Worth is a former investments banker and advisor to the Federal Reserve in Dallas. She said she has been studying energy company financials since 2009, and discovered a troubling trend.
"A lot of them are not making money at all, really," Rogers said.
She said too much borrowed money and expensive over-drilling has driven prices to cripplingly low levels.
"If you look at their balance sheets, they are highly, highly leveraged,” Rogers said. “That's what you are seeing with Chesapeake Energy right now. They've gotten themselves into deep trouble because of the high leverage.”
But Chesapeake Energy is not the Barnett's only barometer.
Petroleum geologist Arthur Berman of Houston follows and charts oil-and-gas plays for a living. He said rig counts have dropped all over the Barnett, from a high of 185, now down to 45. Most of the rigs have left the Barnett for more profitable plays.
"The Barnett Shale was the greatest thing that ever happened, until it wasn't the greatest thing that ever happened," Berman said. "But don't pay attention to the Barnett, because now we've got the Haynesville Shale."
Berman said many of the rigs have moved to shale formations laden with oil and liquid gas in South Texas, Ohio and North Dakota. Berman said the $3.50 wellhead price of gas right is giving energy companies financial fits.
"I see wells whose costs and whose land costs are such that it would be very difficult to make money on rates and reserves we see in the Barnett,” Berman said.
What's more, an estimate of existing Barnett reserves just released by the US-Geological Survey, sharply contrasts with rosy industry estimates.
The government estimates indicate about two decades of reserves are left, about one billion cubic feet per well. That's far less than the three billion cubic feet per well that energy industry officials claim.
“These wells are proving to be long-producing wells and very productive," said Ed Ireland, Executive Director of the Barnett Shale Energy Education Council.
Ireland, who represents several energy companies, agrees prices are low and rigs have moved to more profitable shale formations across the U.S.
But, he points out, production in the Barnett remains high. More than 12,000 wells are producing five-and-a-half billion cubic feet of natural gas per day. He said the first well drilled in the Barnett 30 years ago is still producing, and he expects that to continue.
Ireland said the Barnett will be back.
"There's a lot of drilling that will be done here,” Ireland said. “But the price is going to have to change for it to happen, but not a lot."
Exactly what those still awaiting their first royalty check would love to see.
“I sure could use that extra money,” Brown said. “I sure could.”