Good Morning Everyone, Well I have confirmed through several sources that the leasing in the Felicanas and Northern East Baton Rouge parishes is ConocoPhilips. The lease prices have gone from $250 an acre to $800 to $1100 per acre. So they have spent $80,000,000 to $100,000,000 in these three parishes in the past month. This is just the beginning. There is a lot of acreage still unleased out there..
Thank you Joe for this information. Any insight as to the term, cost and royalties in these leases?
Joe, do you think they are interested just in the Austin Chalk, or does this leasing also involve other formations such as the TMS? Any idea as to how far north in WF and EF they want to sign folks? Would they go all the way up to Clinton or stay south, down close to EBR Parish?
Good Morning Charles and Jessie, My understanding is the royalty is 1/5. Their primary focus is the AC. If anything else appears to be productive then I'm sure they'll go after it. Some of the property in the lease package is just South of Jackson all the way down to the 61 overpass at Jetson.
My instinct is that the first leasing was an attempt by EOG wanting to extend their lease acreage to the East. ConocoPhilips upped the lease amount and cut EOG off at the pass.My fear at this point is this is all of the acreage that will be leased in the near future in this area until the area is proven. C/P is.going to have to start drilling immediately to protect their leases. Even with 2,000 acre units that is a lot of drilling in the next 5 years.
Joe, on what do you base your fear that leasing east of the Mississippi is about to cease? With two majors in the field, I hope the leasing continues.
Its just instinct. I think most prudent operators will want to see more results form operations before spending big bucks on leasing. I hope Jay and Skip will give their opinions. I had been talking to a in Houston about getting involved in the area at the 250/acre rate. This jump in lease prices has blown them out of the area. They are sitting on the sidelines waiting to see what the drilling shows.
Joe, the AC is not on my radar currently, I've got all I can do to keep up with Haynesville activity. Unless I get a client that wants to pay me for AC research, I'll just follow along with this and other threads on AC activity and help out where I can with data from SONRIS.
Thanks Skip. I understand. Got to go with what pays the bills. Thanks for the response.
Thanks Joe, your instinct is informed by experience!