Frequently Asked Questions

This list of Frequently Asked Questions is provided by The University of Texas at Arlington. For individual inquiries, please contact Jerry Lewis, Vice President for Communications, at jerrylewis@uta.edu or 817-272-2761. Any questions regarding leases or royalties should be directed to Carrizo Oil & Gas, Inc. at 817-419-7352.

These FAQs were last updated September 1, 2009.

General Information

Q: Why is UT Arlington involved in the exploration and production of natural gas?
A: The University is developing a significant, long-range revenue stream that is expected to provide vital financial resources and security for decades to come. UT Arlington will use any potential revenue to improve the educational opportunities for its students and to improve the overall quality of life for the greater University community.

Q: Who is doing the exploration and production?
A: UT Arlington is working with Carrizo Oil and Gas, Inc., a company based in Houston, Texas.

Q: What is the process for exploring for and producing natural gas in the Barnett Shale?
A: There are four phases in the process of exploring for and producing natural gas in the Barnett Shale. The Seismic Phase is the process of acquiring 3-D seismic information to evaluate the subsurface; the Drilling Phase is the process of constructing the drill site area and drilling through the subsurface; the Completion Phase is the process of fracture stimulating or "fracing" the well to allow the natural gas to flow; and the Production Phase, the quiet, long-term phase, is the process of producing the natural gas from the well and transporting it to market.

Safety

Q: Is natural gas exploration and production safe for the environment?
A: UT Arlington and Carrizo are committed to an environmentally safe and responsible gas exploration and production program. Carrizo utilizes the very latest advances in technology on the UT Arlington campus.

Q: What are the University and Carrizo doing to ensure safety?
A: Safety is the top priority for both UT Arlington and Carrizo. There are many ways Carrizo is working to provide a safe, clean, courteous and successful operation. First and foremost, they use state-of-the-science technology to ensure the safest possible operations. Security cameras and personnel are utilized at the pad site. Air quality at the site is constantly measured, and the air quality is well within established standards. Ongoing street cleaning and meticulous site maintenance also provides for a safe environment. Carrizo's emergency preparedness plan includes environmental and archaeological assessments, site plans, water plans, truck routes, insurance documentation, and equipment and material use descriptions. This extensive and comprehensive information has given the University the assurance to authorize Carrizo to continue to develop the campus site safely and reliably.

Q: What is being done to control noise at the site?
A: Requirements established by the University require that sound from the site not exceed the levels of ambient sound measured in the area prior to the facility's installation. This requirement is more restrictive than City of Arlington noise ordinance standards.

Current Activity

Q: Where is natural gas production taking place on UT Arlington's campus?
A:  There is one pad site. It is located on the southeast corner of the Arlington campus.

Q: What phases of drilling and/or production are currently underway at the site?
A: Carrizo is currently involved in two simultaneous phases of production within the pad site. Six wells were completed in November 2008 and are in the Production Phase. In January 2009, a new Drilling Phase began on additional wells at the same site. The drilling is expected to continue through the end of 2009, and it is anticipated that a total of thirteen new wells will be drilled for a total of 19 wells at the site. The drilling schedule, however, is subject to many variables and could change. Further operations will be evaluated after the completion of this phase.

Q: What happens during the Production Phase?
A:  During the Production Phase, gas is extracted from the wells and delivered via pipelines to market. Carrizo has developed an innovative plan — believed to be unique to Tarrant County and in accordance with existing local city laws — in cooperation with a local pipeline company to utilize existing utility routes that already contain similar equipment and infrastructure. This has reduced the need to construct pipelines on private property and is making the process of getting gas from the wells to market much more efficient.

Q: Who is receiving royalties from the six wells now in the Production Phase?
A: UT Arlington, as well as some of our neighbors in the College Hills neighborhood and other areas, are now receiving royalty checks from resources produced by the first six wells. The wells have generated more than $3 million in royalties for the University, despite a recent downturn in natural gas markets. UT Arlington is using these funds to support undergraduate scholarships and graduate fellowships, faculty recruitment and retention, and the campus master plan. These royalties are being invested and leveraged with private gifts to achieve their maximum potential.

Q: How much revenue does the University expect to generate from natural gas production?
A: As most anyone in Texas knows, there are no financial guarantees when it comes to oil and gas exploration. The University initially received $391,000 (or $1,000 per acre) from Carrizo for the right to explore for natural gas and to commence drilling operations by April 2008. The University also received a one-time donation of $400,000 from Carrizo. Beyond that, the University is receiving a 27 percent royalty on any natural gas extracted from University property.

Q: What happens during the Drilling Phase?
A: Drilling began in January 2009 on several new wells within the existing pad site. Drilling is the process of constructing the drill site area and drilling through the subsurface. Carrizo erected sound barriers around the site and is utilizing the same type of state-of-the-art drilling equipment that was used during the first drilling operation.

Q: How long will the Drilling Phase last?
A: Each of the horizontal wells will take approximately 25 days to drill. Since time lapses between activity on each well are likely, drilling is expected to continue through the end of 2009.

Compressor Station

Q: Has it been necessary to bring in additional equipment during either the Production or Drilling Phases?
A: Typically, a compressor station is required to stabilize the pressure of the natural gas flowing to market after the initial one-to-two months that a well operates during the Production Phase. At UT Arlington, a small compressor facility was constructed within the well pad site to serve Carrizo and other companies. The compressor facility consists of a single compressor unit that provides the necessary energy. To help control levels of sound at the source, the compressor unit is powered by an electric motor. Use of an electric motor also ensures that there will be no airborne or surface discharges of any kind.

Q: I've never heard of using an electric motor in a compressor station. Is this unusual?
A: This is believed to be the first electrical compression station in the Barnett Shale.

Q: Is the compressor station loud?
A: No. UT Arlington remains stridently committed to maintaining safe and minimally intrusive operations. And because the compressor station was built within the natural gas pad site, it is enclosed behind a sound and safety barrier.

Upcoming Activity

Q: Once the Drilling Phase is completed on the new wells, what happens next?
A: Once the drilling is complete on these wells, Carrizo will begin the Completion Phase, scheduled to begin in early 2010. If everything goes according to schedule, the Completion phase will wrap up and the Production Phase will begin during spring 2010.

Q: Once the new wells are complete, how long will the Production Phase last?
A: It's impossible to know for sure, but the extraction and production process for natural gas on campus could last up to 30 years, providing immeasurable benefits for the nearby community and generations of UT Arlington students.

Q: Who will receive royalties from the new wells once they are in the Production Phase?
A: These 13 additional wells are expected to benefit UT Arlington, but the primary benefit will be to the property owners to the south and east of campus who have signed leases with Carrizo–including the Arlington Independent School District, the City of Arlington, and numerous individual and commercial property owners. (Questions regarding leases and royalties should be directed to Carrizo Oil & Gas, Inc., at 817-419-7352.)

These FAQs were last updated September 1, 2009.