I was contacted this week about leasing property in the W. White survey off FM705. The initial offer is $400 p/acre bonus w/ 20% royalty. I politely countered with something more acceptable to me (if bonus is lowball, royalty will have to dramatically increase). I am not familiar with the company offering the lease. Another company (Red Hat) inquired about my A. Spear survey properties this week & an offer is forthcoming. Who else is getting contacted & what are reasonable expectations in the current market? In 2008, there was a wave of lower offers before the better offers came though. Could this be a similar situation?

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I would move slowly and ask questions.  Much of the leasing activity targeting the Haynesville Shale in NW LA and E TX is by "investors".  2017 leasing that I tracked was predominantly speculative dollars looking to lease areas adjacent to areas that received little or no drilling after the initial land rush and the severe downturn in natural gas prices.  Most active HA operators are drilling where they can produce an mcf for the lowest cost.  That means predominantly infill pad drilling and not much in the way of step out drilling activity.  The major operators, at least those I track in LA, are likely to have limited interest in areas, no matter how prospective, that require investment in a comprehensive infrastructure build out.  At least until such time as the price of natural gas improves. 

There are some active "mineral" companies that are looking to put together enough acreage for a drilling program but they will not be doing the drilling.  They will likely participate as a working interest.  Getting a low royalty is key to being successful in that regard as long as their subsurface due diligence turns out to be accurate.  Many will insist on an extension option or a longer primary term so they are prepared to wait out stagnant gas prices.


Thanks for the insight! I'm in no hurry to lease. I can't help but notice the activity increase in A. Spear. They're drilling again within 1.5 miles from me in Blackstone interests & trucks/equipment on roads daily. I understand your message totally.



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