Landowners, Others Seeing the Impact of Energy Investment

by Garry Hoffmann  on Monday, Aug. 27, 2007 12:00 am  

Lyndell Wyatt raises hay, sod, row crops and cattle on his farm north of Searcy. He also takes phone calls about a new line of business. 

"Once a week, someone from the gas company is asking to do something with our land," Wyatt, 43, explained by telephone on a steamy August afternoon while atop a tractor in his hay meadow.

He's used to multitasking - more so since he, his father and a neighbor negotiated a lease with a subsidiary of Southwestern Energy Co. in early 2005 for access to 2,000 acres along Arkansas 16, about halfway to Pangburn. The five-year contract authorized SEECO Inc. to explore and drill for gas.

"We've got a business going with the farm. We sell sod and we sell hay, and this is like an added job," Wyatt said of the steady stream of inquiries.

"You have no choice but to keep up with it," he said.

Dwight Brown keeps up, too. The Wynne real estate appraiser is keenly interested in the potential mining of parts of Cross and neighboring Woodruff County - specifically several hundred acres south of Fair Oaks. Brown's family sold this land in 1991 but retained 50 percent mineral rights on most and 100 percent ownership on 160 acres.

"My father-in-law knew the gas and oil business," Brown, 54, said. "He instilled in us a need to hold onto such."

A partial payoff came in late 2005 when the Brown family signed onto separate leases: one with Maverick Oil & Gas Inc. for 450 acres in Cross County and a second with Chesapeake Energy Corp. for 200 acres in Woodruff County. The latter plot was combined for leasing purposes with about 50,000 acres that John Conner Jr. of Newport put together.

Each five-year contract included a $275-per-acre signing bonus with a 15 percent royalty stake in gas produced and an option to renew for another five years at the same terms.

"I was comfortable with it," Brown said.

No wells have been drilled, though. Brown thinks that could be four or five years away, citing a lack of transmission lines.

Brown and Wyatt both own land above the Fayetteville Shale Play, but the hydraulic fracturing of this underground gas reservoir hasn't extended to its eastern portions. A 2005 University of Arkansas study estimated that drilling in the basin that extends from north-central Arkansas to the Mississippi River will inject $5.5 billion into the state economy, creating 10,000 jobs by 2008 and generating untold wealth for property owners who lease land and mineral rights. More recent research, however, indicates an even greater economic impact.

 

 

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