Friday, August 9, 2013

Who is Getting Rich from Fracking Denton?

Who owns the minerals in Denton? Who is getting the royalty checks?
Mineral owners control the valve on the Barnett. If every mineral owner refused to lease, then there would be no activity. And once a mineral owner decides to lease, they have the strength of American property rights and the muscular stature of the mineral estate in Texas working for them. In other words, they have power to go along with their money.

Insofar as minerals are owned by people who do not reside in Denton, then all that power sits somewhere else. People far away get the financial benefits without having to bear the costs of actually living near the wells and pipelines. Insofar as people nearby do not own minerals, then their voice in determining the character of their community is overshadowed.
In short: It’s one thing if all those royalties are going to local families. It’s another thing if they are lining the pockets of corporations and others who live far away.

Thanks to Ginger Simonson I have learned it is not hard to answer our questions about who owns the minerals.

You just have to do a property search on the website for the Denton Central Appraisal District. Select “Denton, City of” and only tick the “Natural Resources – Minerals” box. If you put in the year 2013 you will get 3,820 unique mineral property IDs. In other words, you will see everyone who has leased minerals and therefore gets a direct financial benefit from one or more active gas wells in Denton.
The total appraised value of all minerals in Denton in 2013 is $84,635,030.

In this post, I'll look at mineral wealth (who holds what in terms of appraised values) and focus on actual mineral ownership later.

Two-thirds (67%) of the mineral wealth in Denton is concentrated in the hands of five energy companies:

#1 Devon Energy $17,884,540

#2 Enervest Operating, LLC $17,283,720

#3 EagleRidge Energy $9,618,630

#4 Legend Natural Gas $9,236,740

#5 Vantage Ft. Worth Energy LLC $2,796,070

Together they total nearly $57 million.

This is to be expected, because their mineral leases usually stipulate that  the operator takes about 75-82% of the value generated (though this can vary). So this is a correction from my earlier remarks that the companies actually owned the minerals outright.
And then there are the notable mineral wealth of the big developers. Robson Development has minerals worth $8,588,590 and the Cole Family and Trusts holds over $2 million.
And there are other energy corporations with major holdings. Burlington Resources Oil and Gas owns $1,219,290 and Hillwood Oil and Gas owns $518,440.

Add all this up (with other smaller companies not listed here) and it is at least 85% of the mineral wealth in Denton concentrated in the hands of energy and land development corporations. But again, that is about right given the way the leases work out.
One thing we should keep in mind is that this industry, which is generating about $75 million this year does not create lots of local jobs. In 2012, the Natural Resources and Mining Industry accounted for just 1,088 jobs in Denton County. That is the smallest employment sector tracked by local government (education and health services is the largest with over 47,000 jobs). Even if natural gas accounts for all of those 1,088 jobs that is still less than 0.6% of total employment in the county.


  1. Even the Razyor family does not live here. They live in New Hampshire, I believe it's NH, either way it is not here. How much mineral does the city own? Who gets the royalties from the airport drilling? Ed Robson lives in Arizona.
    I heard in the news yesterday Dick Army, retired Republican TX legislator, and Ray Tillerman, retires Exxon executive, are fighting a water tower in Bartonville. They are claiming the site of the water tower will decrease their property values and they bought the property as an inheritance for their children. The water tower would ensure their children' s inherence would become of no monetary value, so the city of Bartonville is going to make their children poor by taking away their inheritance. Can you believe these two men are whining about a eater tower? What about the lives Exxon and Republican' s like Army have ruined with their awful drilling practices,?

  2. To complete this, you really should find out the remaining percentage-not so much as to who they are, but rather, where they live.

    I recall some critics voicing their ignorance in Dish not long ago. After the air study and the lawsuits started rolling, they were making comments about the mineral right owners, implying that the mineral right owners weren't complaining about getting mailbox money. The reality is, most, if not all, the largest mineral right owners took the money and ran. You'd be hard pressed to find mineral right owners actually living in Dish, and even fewer who will tell you that it's worked out great without any issues.

  3. Numbers for Burlington Resources are wrong! They have individual wells listed that are appraised at more than 1 million dollars & there are 48 pages of individual wells they pay taxes on.