Tracts 42603 - 42605 nominated by the Avoyelles Parish School Board required a minimum bonus bid of $350 and a royalty of 25%.
I am not sure what "nominated" means other than that is what they want but that may not be what they are offered. It appears to me that a nomonee has to be elected (e.g. accepted by those in the capacity to complete the deal). Could be wishful thinking or could be an opening round for bidding. I am sure they are doing the "nominating" under advice of cousel. If they are not, then it is all wishful thinking.
Bid tracts may be nominated in two ways. The public entity with executive rights for the minerals may nominate a tract or an interested bidder that has met the state requirements for auction participation may nominate a tract. It is usual for a public entity to place a minimum bid on their nominated tracts. In this case it was the Avoyelles Parish School Board fishing for a bidder willing to offer their minimum. There were no companies interested in the tracts at the minimum. State leases are for a one year term and may be extended for additional years by paying one half the original bonus paid for each year extension. The school board may have just jumped the gun and no energy company is ready to lease at this time. Operators generally use third party bidders to acquire state leases after they have assembled the private lands they need for a prospect. In other words state leases are not usually taken unless an energy company expects to start drilling on the leased lands in less than a year.
Thanks, good reply. Just as I figured, a fishing trip or is that a phishing trip? Well good luck to them, I am sure they could use the money. But like you said, it probably will not happen at those quoted conditions of the lease.
Interesting to say the least.