Locking horns over oil

LIVE OAK COUNTY — The last light of the day slips from the gray sky as Terry Retzloff spots a deer he’s been searching for all season.

The 11-point buck is about seven years old. He’s tough, having survived a nasty fight last year in which he got hooked and lost an eye. And he’s smart. The one-eyed buck rarely shows himself, but today emerges from the brush at a favorite spot of Retzoff’s, one with a bit of roll to the terrain and a view of live oaks.

In the background, accompanying Retzloff’s reverent regard for the animal, is the mechanical hum of a hydraulic fracturing crew that’s working 24 hours a day on a neighboring property, breaking open the Eagle Ford Shale to release trapped hydrocarbons. Drilling rigs and natural gas flares are visible on the horizon.

Retzloff lifts binoculars to his eyes.

“A one-eyed buck with hydraulic fracturing going on in the background,” he murmurs. “Oh, man.”

Across the Eagle Ford Shale region, oil and gas operations are taking a back seat, in some cases, to deer season. Some of the region’s largest landowners have worked provisions into their minerals leases that don’t allow drilling or hydraulic fracturing — at all — during white-tail deer season, which started Nov. 3 for a 30-county region of South Texas and ends Jan. 20.

But at smaller ranches like Retzloff’s 650 acres, both deer hunting and Eagle Ford production are in high season, existing side by side.

“We’ve lost privacy,” said Retzloff.

The downside of the oil business is the traffic, noise and occasional plastic bags or discarded soda bottles that crews leave behind. But he also has four wells producing oil and gas, improved roadways in, out and across his ranch and thinks the oil company has limited its surface impact.

David H.O. Roth, an attorney who heads the energy team at Cox Smith Matthews, said deer hunting is an issue that crops up commonly in lease negotiations. Landowners want to use their property during fall and winter, the most pleasant times of year in South Texas.

“It is generally your larger landowners who are able to negotiate those terms,” Roth said.

Deer hunting is even occasionally a topic of discussion when publicly-traded companies talk about quarterly results with industry analysts.

In 2011, when someone asked Chesapeake Energy Corp. about the Eagle Ford, executives said that the company was limited in the amount of oil it could produce. Part of that was due to trucking bottlenecks at the time and “part of it was also completion prohibitions during the deer hunting season over the winter,” CEO Steven Dixon told analysts.

In “special cases,” the company provides white-tail deer hunting provisions for landowners, Chesapeake spokeswoman Haley Curry said by email. “We appreciate the heritage and culture of the outdoors and hunting sports in South Texas,” she said.

Judon Fambrough, an attorney at the Real Estate Center at Texas A&M University, said that deer hunting is culturally important, but practical too. Offering deer leases or guided hunts has been a way that ranch owners have been able to pay the bills and keep their properties in tact over the years.

“A lot of times your deer hunting has been a source of income for landowners. They really did it because they had to,” Fambrough said. “I’ve heard a lot of them say with the income they’re getting from oil and gas, they don’t need to have hunting. They’ve probably been shutting some gates because they don’t need the money.”

In other some cases, the mineral ownership and the surface ownership have been split, which can leave someone with a hunting property with all of the hassle and none of the benefit of oil and gas production. Deer stands and feed may be set up for months before a drilling rig pops up nearby.

“An oil company is a dominant estate,” Fambrough said. “They can use as much as they need without permission. You could have a hunter who is out time and money.”

Noise complaints

In general, hunters are not happy about the oil and gas activity.

“The deer hunting guys want the quiet and the stars and coyotes howling,” said attorney James Barrow.

And not all landowners thought to include deer season restrictions in their leases. “I don’t think anybody at all could have expected the scope of activity that’s taking place now,” Barrow said.

The Eagle Ford has become one of the most productive shale fields in the U.S. And because companies typically drill as close as possible to the edge of their lease line — giving them the ability to drill horizontally across the biggest percentage of their acreage — rigs often abut neighboring properties.

Charles Covert of the Covert Ranch in Cotulla, part of the Golden Triangle area famous for its trophy deer, doesn’t have oil and gas production on his property, but must contend with gas flaring, noise and dust from his neighbor’s ranch.

“It’s devastating to your hunting business,” Covert said. “They often drill and frack on the lease line. The impact to neighboring ranches can be devastating.” Wildlife patterns change and animals move to other areas of the ranch, which Covert said causes an unequal distribution and density.

Covert Cattle Co. Inc. this month sent a letter to the Texas Railroad Commission complaining of constant noise, including loud diesel compressors, and gas flaring near the ranch’s residential compound, which has been there for 25 years. Oil company trucks kick up white caliche dust that make it hard to breathe. “The noise is a nuisance, and is interfering with our business and the enjoyment of our remote ranch headquarters,” the letter says.

Covert said that regulations should be adopted to minimize the impact on neighboring properties.

“They need to make sure there’s the least destruction in ecology and way of life,” he said. “The development preceded the plans to control it.”

Frank Matthews, wildlife biologist at the Killam Laredo Ranch in Webb County, said that unless there’s an emergency, no oilfield activity is allowed on the 45,000-acre ranch before 9 a.m. or after 4 p.m., when deer are most active.

“We try to get all of our drilling done before deer season,” Matthews said. “The hunters do not like the oilfield activity.”

But after drilling and hydraulic fracturing are completed, crews need to access wells regularly. “It’s not just a short-term thing with the rigs there,” Matthews said. “The activity goes on for decades afterward.”

Even on a ranch with restricted activity, oilfield work sometimes happens anyway at inopportune times. Recently, a Killam family member was hunting in a pasture when a tanker drove up a few hundred yards away, scaring off the deer.

“That was when it was time to make it formal,” Matthews said. The ranch now has posted signs about seasonal restrictions.

Long term

David McKown, ranch manager at A&M’s La Copita Demonstration Ranch and Research Area in Jim Wells County, which doesn’t have oil and gas production, said that hunters are not enjoying the typical, quiet South Texas winter.

“Hunters are very disappointed,” he said. “They were looking for a decent deer lease. Now there are roads and trucks everywhere.”

McKown says owners will have to figure out how they will manage their property. He tells people not to rely on any one type of business, even if that business is lucrative oil and gas royalties, and encourages ranchers to have a mix of cattle or goats, hunting and activities such as birding.

“What’s the long-term picture? I would imagine that some of these people are just crippling their deer herd with all of that activity,” McKown said. “One of the things we preach to people is longevity. How are you going to pay all of your bills?”

Retzloff, who also owns a business that monitors well tests for mineral owners, said that the oil boom could bust if prices drop too far.

“These people who say this is going to last 10 years or 20 years shouldn’t be saying that,” he said. “They can’t predict what commodity prices are going to do.”

So Retzloff will continue balancing the oilfield work with hunting on his land.

On a recent afternoon, the one-eyed buck doesn’t seem spooked by the noise of hydraulic fracturing, or the distant beeps that occasionally carry across the air as a commercial vehicle moves in reverse.

But when the wind shifts, the buck picks up the scent of people and looks up in alarm.

“He knows we’re here. He smells us,” Retzloff says, and the buck bounds into the brush. “There he goes, trotting off in his majesty.”


Twitter: @Jennifer_Hiller