Beaumont’s North End could be in for a payout
When the earth shakes, usually the causes aren’t man-made.
But with more than 6,000 “vibe points” in Cimarex Energy Company’s seismic survey in Beaumont’s North End, some residents might be in for a shaky winter.
Depending on the circumstances, the shaking could be well worth the payout. According to land and title research conducted by OGM, a land management company hired by Cimarex Energy Co., most property owners in Beaumont’s North End own their own mineral rights. If the seismic study yields results and drilling begins, residents in some of Beaumont’s poorest areas could see royalties equal to 25 percent of every dollar’s worth of oil or natural gas extracted.
Jim McColl, Cimarex Energy’s senior landman, would not comment on an exact dollar figure in possible royalties but said the more than $50 million in royalties from Beaumont’s well at the Municipal Airport could be some indication.
“It could be worth a lot,” he said. “Those wells out there at the airport and the west side — they’re really prolific wells.”
In September, Cimarex Energy Co. was successful in getting a city ordinance changed that had banned “vibing” by seismic vibration trucks on city streets.
The trucks employ a sophisticated vibration signal that penetrates deep into the Earth’s crust, giving geophysicists and geologists a picture of the greasy gold underneath — or the potential for the presence of oil and gas. In most cases, vibe trucks cannot vibe close to certain structures determined to be at risk by city engineers, who accompany crews to ensure safety and compliance.
Standing next to two of the vibe trucks, one gets a full appreciation for how the trucks got their name. Each large truck lowers a steel plate between its axles onto the ground and, as they begin “vibing,” the low to high vibration frequency can be felt in your feet and body as gravel jumps and street signs rattle.
As reported by The Examiner in 2008, many residents in unincorporated areas of Jefferson County complained that more invasive seismic mapping techniques — that of blasting dynamite charges in deep, narrow holes in more rural areas where vibe trucks can’t go — had caused damage to home foundations, water wells and other structures near the underground blasts.
To mitigate any possible damage, OGM offered a free home inspection to any and all landowners along the vibe route. With 6,000 or more points to cover, OGM project manager John Hoke said at least 250 landowners took advantage of the free home inspection to help rule out any possible foundation damage to homes on or near the vibe route.
Further north, the comprehensive seismic study incorporates thousands of “shot holes” across the Big Thicket National Preserve that — due to the sensitive ecosystem — will employ small dynamite charges deep underneath the ground instead of having the cumbersome vibe trucks used in the city tracking through the wilderness.
Every day from now until at least November, machinery for each shot hole is being flown in by helicopter to maintain the park’s sensitive ecosystem.
“There’s a lot of paperwork, a lot of restrictions,” said Hoke. “We’ve had to heli-portable drill it. That’s an extreme cost there.”
Cimarex Energy Co. officials are quick to point out the study might not yield any results at all, but the project represents a large investment for the company. Current cost projections for the study are in the $10 million range, but McColl with Cimarex Energy said the project’s cost could go higher.
“If we get delayed because of weather or some such, it could really drive the cost up,” he said.
Once the ground underneath the preserve is mapped, Big Thicket oil and gas program manager Stephanie Burgess said it could take Cimarex Energy Co. as long as a year to begin drilling.
“If they find something that they want to pursue that is underneath Big Thicket, then they would have to discuss it with us and then go through the same compliance process that they went through to get the permit for the seismic survey,” she said.
Burgess said the permitting process is much more stringent for surface drill locations inside the preserve, adding the time frame for beginning drilling is still up in the air.
“There would be a lesser amount of paperwork if they used private surface” outside the preserve, she said.
Burgess said the compliance process for the seismic survey within the preserve took about 18 months, adding a similar process for drilling might take just as long.
“We just have to measure the impact on our resources, the same way we did with our seismic survey,” she said.
To speed the process and avoid damaging Big Thicket’s ecosystem, McColl said Cimarex Energy Co. would likely find a private landowner a mile or two outside the preserve to begin drilling, adding this is only possible due to modern-day advances in directional drilling.
“It’s amazing what these engineers can do and how far they can drill out and down and hit those small targets,” he said.
Whether or not Cimarex will extract natural gas or oil, or whether they will employ the hydraulic fracturing extraction technique known as “fracking” is unclear, said McColl, who added that his company will have to analyze the data from the seismic survey first, which could take up to six months after the company’s end-of-November close to the survey.
McColl said the sheer number of individual landowners in Beaumont’s North End will lengthen the timeframe as well, saying the company could have to negotiate a lease/royalty agreement with tens of thousands of residents.
“Obviously when you’re in an urban area and you have lots, and there are a lot of owners, obviously that exponentially adds to the amount of time that it takes,” he said.
According to the Jefferson County Appraisal District, of the 11,267 residential properties in the northern-most portions of Beaumont, a little more than half – 6,518 – claim the homestead exemption, meaning the residents are homeowners and could receive royalty checks.
When asked what they would do with their royalty checks, most homeowners in Beaumont’s North End had no idea they could be in for some extra money every month.
“That’s the best news I’ve heard since I’ve been here,” said five-year Beaumont resident Mike Thomas, whose home on Delaware sits in the middle of Beaumont’s North End.
According to Hoke of OGM, Thomas’ home, along with much of the North End, lies in an older area of Beaumont where most homes were built and sold with their mineral rights still attached, a rare occurrence in any city or municipality.
Hoke said the portion of Beaumont east of 69, north of I-10 and southwest of the train tracks has the highest concentration of homeowners who will split any money made by the extraction of the oil underneath their homes.
Thomas said he’d spend the money on improving his home.
“Put me in a new driveway, move into a new house maybe,” he said. “It depends on what I get.”
Bonnie Johnson, whose home on Delaware has been in her family for 11 years, says a little extra money would go a long way.
“I lost my husband October of last year,” she said. “Everything off one income is hard.”
Victor Alfaro, a 30-year resident of the North End, said he’s skeptical about the survey.
“I’m against all that from the standpoint that it’s too much noise and too much vibration,” he said. “It’s environmental.”
But posed with the prospect of a royalty check each month, Alfaro softened his stance.
“That sounds alright, heck yea! I could use some money right now,” he said.
Alfaro said he too would make much-needed home improvements but won’t be holding his breath for any money.
“That sounds alright, but you don’t know if they’re gonna find oil,” he said.
Councilman Audwin Samuel, whose Ward 3 comprises Beaumont’s North End, said while some of his constituents might not have heard they might be eligible for royalties, those who’ve attended neighborhood meetings with OGM and Cimarex Energy Co. will be watching and waiting for a possible payout.
“It’s totally dependent on the size of their property, but any unexpected money is good money,” he said.