DeSoto schools officials already are working behind the scenes on the 2012-13 budget, and because it's early in the process, they don't know fully what effect the slowdown in the Haynesville Shale will have on the bottom line.

But with anticipation of less revenue, the school system is working in a "downward trend mode in relation to expenditures," schools Superintendent Walter Lee said.

The result may be lower supplemental payments to employees and the elimination of a half-dozen teaching positions.

The school district is far from broke, however. The DeSoto School Board has been able to sock away more than $44 million into an employee benefits trust account and earmark $14 million in the general fund reserve account.

An additional $22 million is in the bank to cover proposed construction of a new central office and a career academy, although plans for the latter are on hold until school leaders learn the extent of any effect from proposed statewide school reform measures.

However, since the Haynesville Shale's presence was made public, there's always been a warning: the explosion of leasing and drilling would slow down one day. And that time appears to have arrived.

This month marks the fourth anniversary of the shale's announcement, and it is expected to mark a significant turn in activity.

Record low natural gas prices because of an abundant supply from shale plays and an unusually mild winter have oil and gas companies scurrying to oil and natural gas liquids plays that will produce greater profit margins.

That doesn't mean the Haynesville will be ignored. Companies such as Chesapeake, EnCana and Shell are slicing their rig counts in northwest Louisiana, but they continue to service the thousands of wells already drilled here.

Industry officials predict once gas prices rise and stabilize, the dry gas fields like the Haynesville will be hot again, especially as markets are developed overseas for liquefied natural gas.

"Over the past four years, the Haynesville Shale has brought thousands of direct jobs and created billions of dollars in new business sales for the state of Louisiana," said Don Briggs, Louisiana Oil and Gas Association president. "The Haynesville Shale is responsible for stabilizing the state economy during a trying financial climate in the United States. While the rig count has split in half from its peak of 139 in 2010 to now around 60 rigs in north Louisiana, we will see certain companies remain in the Haynesville for years to come."

He added: "The rig decline and low natural gas prices are due to a simple national supply and demand issue. However, we are encouraged that as the price of natural gas stabilizes, a massive amount of shale gas remains for exploration and production. With the recent talk of exporting LNG, the Haynesville Shale will play a critical role in this process."

Dry gas retreat

Announced cutbacks from oil and gas companies started earlier this year.

Chesapeake Energy, the largest leaseholder in the play, started the trend and in its quarterly report said the rig count in dry gas plays would be cut from 75 nationwide to 24, which includes 12 rigs in the northeastern part of the Marcellus Shale and six each in the Haynesville and Barnett shales.

"The challenge we face is to find the right balance given the current price of natural gas and like our fellow operators in the Haynesville, Shell has scaled back its drilling program," said James Blanton, operations manager at Shell's DeSoto Parish office. "Interestingly enough, our 2012 plans are consistent with the level of activity we were at when we first entered the play or a bit better based on the number of wells drilled."

To elaborate on what Paul Goodfellow, vice president of development, said in early October, the reduction in rig count may cause some to be concerned, but the number of wells being drilled is a better gauge, Blanton said. Shell has about 200 wells.

"Again, Shell enters these plays with a long-term view, which enables us to adeptly modify when necessary, so we can continue to manage a reasonable drilling program," he added. "Our employees are focused on production and the Haynesville play still remains an active asset in Shell's North American onshore portfolio."

EnCana Oil & Gas boasted of one of its "best operational years ever," said Randy Eresman, president and chief executive officer. But those accomplishments are overshadowed by the oversupply of natural gas.

"Although a litany of factors has caused the oversupply, it is abundantly clear that a continued reduction of drilling activity will be required to restore market balance," Eresman said in a prepared statement. "For the industry as a whole, near-term natural gas prices are at levels below what it costs to add most new production, and in some places, may even be below what it costs to produce from existing wells.

"Although we continue to believe that the long-term future for natural gas remains promising, until we see signs of a sustainable recovery in natural gas prices, we will be reducing our pace of natural gas development and slowing down production from some of our natural gas wells to preserve value."

EnCana's plan calls for slowing down or shutting in production from existing well bores. How long that will last is unknown.

EXCO Resources will drop from 22 to nine rigs in the Haynesville Shale this year, said Douglas H. Miller, chief executive officer.

Matador Resources, a small player in the shale, plans to allocate 6 percent, or about $18 million, of its 2012 budget to natural gas-related activities, primarily in the Haynesville Shale. The company does not plan to drill any operated Haynesville wells this year, according to a company report.

Comstock Resources said last month that it was exiting the Haynesville this month to focus on the oil-rich Eagle Ford Shale in south Texas. Half of its revenue is expected to come from oil this year instead of dry gas, which was the opposite a year ago.

Leveling off

DeSoto Parish tax collection agencies anticipate a leveling off of sales taxes at some point, but no one knows what the level will be.

With new restaurants, businesses and hotels dotting the parish, revenue is projected to be greater than the pre-shale days. Factored into that, of course, will be the fact that less money will be spent locally because of the exodus of oil and gas workers.

For now, parking lots at the three new hotels in Mansfield remain full, and lunch and supper hotspots still are popular. Noticeable is a slight decrease in truck traffic, and more slots are open at the various RV parks that popped up to meet the demand of the itinerant work force.

Parishwide sales tax collections during fiscal year 2010-11 zoomed past $120 million, blasting the previous year's collections of $84 million. To date this year, more than $68 million has been collected, which is about $9 million less than this time a year ago.

For the School Board, which collects 2.5 cents on every $1 spent, that equates to $41 million so far this year, a $6 million drop over a year's time.

"It's been going down for the last two or three months. But for the last month "» it's down but very little compared to last year at this time," Lee said. "So it's too early for us to tell if it is going to level off and where it's going to level off. We don't know if it's leveling off now or if this is an unusual month or if we will drop off at a higher rate next month."

School Board Finance Director Steven Stanfield said the amount shifted into the state-mandated employee post employment trust varies annually because it is dependent upon sales tax collections. Once collections meet operations, then 20 percent of the additional funds go into the trust.

Pay supplements, which are not guaranteed income, are only handed out when excess funds accumulate. DeSoto's employees were fortunate to receive $8,500 in supplemental payments last year, which cost the system just more than $4 million.

Lee anticipates the May check may be trimmed to $2,500, compared to $5,000 in December. "But we'll see how it looks in another month or two. That will help us determine if need to make other plans."

As for overall expenditures in the wake of declining sales tax revenue, "We're watching it, and we're just making sure as we need to cut back we will."