Eagle Ford Shale and How it Affects You, the Landowner:
Finding Your Silver Lining
A couple of weeks ago, Mark and I had the pleasure of attending the DUG Eagle Ford (developing unconventional gas) conference in San Antonio. Not fully knowing what to expect, we went in with open minds as both landowners and representatives of landowners, in hopes of educating and keeping ourselves current with all of the oil and gas activity in South Texas. We spend a great deal of our time fielding and trying to answer questions about the current activity levels, its impact on the land, and how it relates to landowners, and thought this would be a great forum to continue our education. As two of among over 4,000 conference attendees, any doubt as to the size and scope of what is happening in our area quickly began to vanish. While it would be impossible to cover everything we learned in one blog post, I wanted to pass along a few of the major themes we drew from our experience.
 
A large portion of our time was spent listening to speakers on various panels and operator spotlights. One very encouraging overtone from our perspective was the oil companies desire to work with the landowner and continue to develop methods which minimize their impact on the land and environment.
Water Usage: It's hard to find a hotter topic than Texans, their water, and how it is used, and perhaps the biggest concern with hydraulic fracturing is the amount of water it  requires (click on the graphic to the left for a more detailed explanation of fracturing). One company who was spotlighted talked about how they were working on tapping aquifers which contained non-potable water and would be otherwise useless as drinking water. Others are researching desalination and recycling of used water, while other companies are focusing on moving away from using water all together. One booth we visited, GASFRAC Energy Services, has developed a process by which they use LPG (Liquefied Petroleum Gas) instead of water to fracture wells. They now have 2 fleets operating in Texas with plans to expand. Bottom line, we saw a concerted effort by everyone to continue finding ways to reduce water usage and protect one vital resource while developing another.
While I'm on the subject of water, there is also a lot of misinformation out there regarding fracking and its potential to pollute our drinking aquifers. I've included a graphic provided by Pinnacle showing the distance between the shallowest fracture and the deepest aquifers by county. Based on the information being provided, in most cases that distance is over 8,000 feet and is over 3,000 in the shallowest of counties. You may have heard horror stories of people in other states lighting their water from their faucets and so on, but the major difference there is that the fracs take place extremely close to the aquifers. The experts tell us that at our depths in South Texas there is virtually no chance that a frac ever even comes close to an aquifer. Texas has also been an oil state for much longer than most, and as a result has some of the best and toughest regulations regarding vertical casing through those aquifer zones, so much so that an operator would almost have to deliberately break the law to create any issue.
Superpads: One byproduct of horizontal drilling is the ability to drill multiple laterals from one surface pad. With laterals getting longer and longer, putting as many as 6 to 12 off one pad means truck traffic is concentrated to one area and less surface gets disturbed as a result of drilling. This is still a new and developing concept but benefits both the oil company and landowner.
 
Another theme which rang throughout was the fact that this entire boom in the EFS is still early in its infancy. Every day thousands of feet of pipeline are going in, which eventually will reduce and in some areas eliminate the need for tanker trucks hauling oil, and wells that are being flared will be connected to gas networks and taken to market. This chart shows production projections for Marathon Oil in the Eagle Ford through 2016, and I could post similar projections for just about every operator who was in attendance. Every day these companies gain more and more information on the play, and as a result are going to do better and more efficient work, which in the end benefits us all in one way or another.
 The biggest concern we see lies within the minds of the surface owners who own no minerals within the reaches of the EFS, and/or prospective buyers who are interested in buying in this area, neither of which will ever get a shot at any mineral interests whatsoever. I think it goes without saying that most of the greatest deer country in the state of Texas sits atop the EFS's hottest areas, so where do we as landowners go from here?
Here it is in a nutshell. We will have to learn to adapt and live with the EFS or move away to other areas. Both are workable scenarios, but after attending the DUG, we are encouraged that surface owners and Operating companies can and will coexist, and we believe that when the dust settles, they will coexist peacefully. The predominant overtone at the DUG revolved around the many ways that oil companies are working hard to respect the surface owners, the environment, the land, and it's inhabitants. The EFS is here to stay, and so are you and I. We've been watching close, and while the tendrils of dust rise above the horizon, billowing up behind the multiple tractor trailers barreling through South Texas, we are also seeing more money spent and improvements being made to the landscape than any other time in history. Big deep water reservoirs, all weather roads, new fences, and many other improvements are exploding across the landscape as a result of exploration, and the exploration companies' efforts to work with landowners. Is it inconvenient? Hell yes. Can it work, and can it benefit us as landowners, and lessees, and is there a silver lining to this cloud? Absolutely!
In conclusion, we at MHRP have several listings spread throughout South Texas and the EFS area, which because of the negative perception of the Eagle Ford, are available at prices you would not have seen two or three years ago. This just may be the opportunity you've been waiting for to get a property below market value, so we would encourage you to take a look and if you feel so inclined, give one of us a call to learn more.
Jared Capt, Agent at Mark Hubbard Ranch Properties
A special thanks goes out to the companies referenced in all the graphics used throughout, as well as Mark for his ideas and input in putting this together.
 Iron Antler: 724 High Fenced Acres in Frio County. MLDP 3, straddles the popular San Miguel Creek, three water wells, three earthen tanks. Includes a 4/2 mobile home, two storage containers and two blinds and feeders.
Rio Venado: 1,000 Acres in McMullen County. MLDP 3, High fenced on 3 sides and bordered by one mile on Nueces River on the 4th, multiple food plots, fantastic deer herd in place, three very nice mobile homes, barn walk-in cooler, and the list goes on.
 Tandala: 1500 Acres in La Salle County. 9.2 miles south of Fowlerton this is a top quality turn-key operation with excellent habitat, quality deer herd, an extensive network of wide roads, and seven lakes and ponds. The headquarters has a 3,000 sq. ft. main house, 1,400 sq. ft. guest house, bunk house and barn.
 Cissy's RV Ranch: Karnes County. For the investor looking for a steady cash stream, or operator out there needing a base to call home, look no further. This Mobile Home Park is fully occupied and sits in the heart of the EFS. The best thing is that it comes with additional acreage leaving ample room to expand or build a yard.
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