By Sylvia Moreno
Washington Post Staff Writer
Sunday, July 30, 2006; A03

FORT WORTH -- Gary Hogan bought his Spanish-tile-roofed stucco house on the western edge of the city in 1992 because it offered the perfect combination of city and country living -- only 10 miles from downtown, yet surrounded by pasture land roamed by gentle cows.

But now the pasture is gone. So are the cows. Today Hogan's backyard gate opens onto a huge natural gas well site that, not long ago, kept him up nights as roughnecks drilled 50-foot-long pipes more than a mile underground, aided by industrial spotlights that lighted up the neighborhood. A second well is being drilled 1,500 feet away; 10 more wells are planned in and around his neighborhood.

"I used to open this gate and sit on my patio and look out, and I felt like J.R. Ewing. I had cattle out there and I didn't even have to take care of the critters," Hogan said. "I was used to very quiet countryside. Then it was bing! Bam! Boom!"

Welcome to the newest, largest, most productive and most urban natural gas drilling site in the nation. As a huge billboard ad for drilling services just south of downtown Fort Worth says: "If you want a gas well . . . get one!"

Thousands of residents in this metropolitan area of 1.3 million have done just that. They have signed over the mineral rights in the land under their homes for lease bonus payments and the promise of monthly royalty checks for decades from companies erecting well pad sites and derricks all around town.

And it's not just homeowners who can reap benefits. Any entity that owns mineral rights -- whether or not it owns the land above the minerals -- can.

In less than a year, the City of Fort Worth has earned $9 million from signing bonuses and gas royalties after leasing 2,400 mineral acres to companies drilling near three city parks and the municipal airport. The money will fund park and airport improvements.

Dallas-Fort Worth International Airport, just east of Fort Worth, is about to choose the drilling company that will give it the highest royalties for the mineral rights under 17,000 acres of land, as well as the best deal for the right to drill about 30 natural gas wells adjacent to runways.

The American Cancer Society, which retained the mineral rights to land it sold in 1961, recently sold those rights to Chesapeake Energy of Oklahoma City for $5.3 million.

Even the Girl Scouts hope to make money on the drilling frenzy. Fort Worth's Circle T Council has leased more than 400 mineral acres under its two summer camps to an energy company for a substantial bonus and monthly royalty payments. Officials would not disclose the sum, but one Girl Scout employee described it this way: "It's like money falling from heaven."

This gateway to the West, as Texas lore describes Fort Worth, sits atop one of the largest, deepest and richest gas-infused formations of black rock in the United States. Discovered in 1981, the formation, known as the Barnett Shale, was little more than a geological footnote until this past decade, when technological advances made drilling possible through the hard, dense rock.

Companies could finally extract natural gas from the shale, and drilling started in the late 1990s in rural counties north and west of Fort Worth. Newer technology also made horizontal drilling feasible so that the breadth of the rock could be mined efficiently.

Horizontal drilling made working in urban areas such as Fort Worth viable because the shale -- 6,000 to 8,000 feet below densely packed neighborhoods -- could be drilled by one rig built on the periphery of or even outside a subdivision.

Then the price of natural gas began to rise, hitting a record level of $14 per cubic foot last fall after Hurricanes Katrina and Rita. It has since settled in the still-profitable $6 range.

It's the "new hot area," said Ramona Nye, spokeswoman for the Texas Railroad Commission, which regulates oil and gas production.

"In this case, everybody knows that with the Barnett Shale, it's not a question of whether you're going to get a well, but how many million cubic feet are you going to get a day" of natural gas, said Fort Worth Mayor Mike Moncrief, who, coming from a three-generation Texas oil family, knows something about mineral exploration.

In the past two years, drilling companies have flocked to the city and the surrounding 14 counties that sit over the Barnett Shale, and there's little to stop them. In Texas, state law gives owners of mineral rights the prerogative over owners of surface land. The companies have to negotiate only with the mineral rights owners to get to the natural gas.

"We cannot prohibit gas drilling within our city, and if we did, we would have to pay compensation to every mineral estate owner within the city limits who would no longer be allowed to access his mineral rights," said Sarah Fullenwider, Fort Worth's assistant city attorney.

About 1.4 billion cubic feet of gas is produced daily out of the Barnett Shale, enough to heat more than 1 million homes for an entire winter. And that current production, industry experts said, is only 10 to 12 percent of the gas believed to be inside the Barnett.

"It's one of the best and most exciting plays in North America," said John Richels, president of Oklahoma City-based Devon Energy. The company, which has leased 720,000 acres in the Barnett Shale, has drilled more than 2,500 wells and produced more than 800 billion cubic feet of natural gas.

All this drilling activity, Moncrief said, is "a blessing and a challenge." Fort Worth has issued 532 permits for gas wells within the city limits. Residents such as Hogan, who are unhappy with the noise and safety issues these industrial work sites bring to their neighborhoods, successfully lobbied the city to tighten drilling ordinances.

The City Council approved changes to prescribe minimum distances between new wells and existing homes and between existing wells and proposed subdivisions. It also approved rules for noise abatement, site cleanup and hours of operation.

Hogan is not happy with the new distance requirements, and he describes himself as one of Fort Worth's newest "have-nots." The mineral rights under his home were retained by the Asian investors who funded the developer that built his subdivision 16 years ago.

"Some people just think this is the greatest thing in the world because they're going to get something out of it," Hogan said. "I'm not."

In April, a gas-well blowout killed an employee of a drilling company in the Fort Worth suburb of Forest Hill, generating concern among some city residents. Many of the homeowners in the inner-city neighborhood of Morningside Park are refusing to sign over their mineral rights to a local company intent on drilling underneath the small, tightly packed homes. It has offered a $250 signing bonus and 20 percent royalties, which have been described as a monthly payment of about $100.

"I am from West Texas, and I'm used to the gas and oil business," said Ida Piper, president of the neighborhood association. "I'm very familiar with the drilling and the procedures of it. I don't want it in our neighborhood, because it's too dangerous."

But Laverne Stanley and the residents of the Riverbend Estates subdivision, on the eastern edge of Fort Worth, don't mind the wells at all. Stanley, the past president of the neighborhood association, last year negotiated with a local drilling company to sign over the mineral rights under the common property owned by Riverbend Estates and the rights of each of the 210 homeowners.

The association received a $30,000-plus signing bonus, which it used to repave one of the neighborhood streets, and each homeowner received a $238 bonus. The first royalty checks to the homeowners and the association should arrive next month.

The well extracting natural gas from under Riverbend Estates is outside the gated community, so Stanley can't see it from her luxury Mediterranean-style house. But she recalls hearing the drilling when the well was established. At the time, one homeowner complained, and the drilling company offered to put her up in a hotel for the three weeks the drilling would continue. The rest of the neighbors were fine.

The whack, whack, whack of the drilling rig, Stanley said, "was the sound of money, as far as we're concerned."