Friday, Mar. 14, 2008
CISD Signs Gas Deal for $11,400 per Acre
Agreement Will Add $4.58 Million to School District Fund Balance
By Nicholas Sakelaris
Staff Writer
Carroll school board officials finalized a natural gas lease with Chesapeake Exploration last week that pads the district’s wallet with an extra $4.58 million.
The school district leased all 16 properties, including the former Carroll Middle School campus, a total of 402 acres.
The well sites will not be on district property, possibly up to a mile away, and will use horizontal drilling technology.
“Parents will see no visible changes at school sites,” Superintendent David Faltys said in a news release.
“The good news is that the off-site drilling has the potential for providing an ongoing revenue stream well into the future,” he said.
The $4.58 million signing bonus translates to about $11,400 an acre, significantly more than the amount that the Grapevine-Colleyville school district negotiated from the same company last year.
GCISD leased 437 acres for drilling, also from off-site wells, for $4,294.95 per acre.
The CISD check was deposited into the district’s fund balance where it will stay until trustees decide how to spend it.
When production starts, the school district will begin receiving 25 percent of the royalties based on the gross drilling production or market value, whichever is higher.
Lower-than-expected enrollment raised budget concerns at last week’s school board meeting.
The windfall from gas wells is timely.
“While there are certainly no guarantees, these monies could be utilized to help fund daily operations expenditures, new staffing/programs, and/or capital improvement and facility needs,” Faltys said.
The lease is for three years and could be extended an additional two years. If the lease is extended, the district would receive an additional signing bonus.
School board trustees have been negotiating with Chesapeake for several months.
On Feb. 18, they voted to give board President Erin Shoupp authority to sign the contract, which she did on March 3.
Oklahoma City-based Chesapeake has had a strong presence in the area since reaching an agreement to drill on 18,000 acres at Dallas/Fort Worth Airport in August 2006.
“We are looking forward to beginning our drilling operations, which will deliver fantastic economic benefits to the Southlake area and enhance the quality educational efforts of CISD,” Chesapeake spokesman James Geiser said in a news release.
See Chesapeake Energy’s Web site at www.chk.com.
See www.southlakecarroll.edu for information about the school district.
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