Texas Forest Country

The Lone Star State has long been synonymous with crude oil and natural gas production. There’s a reason, after all, that the Beverly Hillbillies called it “Texas Tea.”

In East Texas, production reached nearly 4.6 million barrels in 2008.

Natural gas, a rising star in the Texas Forest Country energy portfolio, cleared 601 million cubic feet that same year.

“This is a tremendous boon to the economy of any county, and particularly a part of the state that is not a depressed economy, but one that is changing rapidly,” says Rep. Jim McReynolds, a member of the Texas Legislature and a petroleum land man who owns Chapparel Land Services. “We’re moving from an agricultural economy. We’re not a heavy industrial economy in this part of the world. We still have people owning land, and we’re in the oldest part of Texas.”

Wells in the 13 counties of the Texas Forest Country produced about 4.6 million barrels of oil in 2008, about two-thirds of it in Newton and Houston counties.

The impact of oil and gas production is tremendous because one incident can have a ripple effect: royalty owners receive bonus payments, oil companies create jobs, everyone affected suddenly has more money, which in turn buoys the regional economy.

“The truth of the matter is, when oil and gas comes in, it changes everything in a county’s economic outlook,” McReynolds says. “First of all, you get deep bonus considerations for your leasing. Then when hydrocarbons are produced, you get a monthly check based on the sales of those hydrocarbons, and those dollars really improve the lives of the people who live in that part of the state.”

While oil production in the Texas Forest Country has slowed, natural gas is catching fire.

A portion of the region sits atop the Haynesville Shale, a vast natural gas deposit some 10,000 feet below the ground.

The deposit area, which includes Panola and Shelby counties, has the potential to do for the region’s natural gas output what the East Texas Oil Field – a 140,000-acre patch that yielded some 30,000 wells – did for oil production.

The country’s largest known collection of natural gas is also in Texas, but the Haynesville Shale could give that old standard a run for its money, says Commissioner Elizabeth Ames Jones of the Texas Railroad Commission, which regulates oil and gas.

“The potential for the Haynesville Shale to be a tremendous economic driver for East Texas, that potential is huge,” she says. “It’s just one more piece of the energy pie of the state of Texas, and the contributions of the East Texas region for decades have been tremendous.”