Smackover exclude Haynesville Leasing

Recently contacted by landman wanting to lease surface to 10,000' in Miller County--the old Kelly Bayou Field which is very close to the AR/LA line in southern Miller Co. He said they were only wanting the Smackover and would exclude the Haynesville Shale.  The chart I looked up appears to show the Haynesville Shale sitting on top of the Smackover.  Can someone help me understand how this would work?  Also, his terms did not seem to be so good:  3 year & 2 year option; 3/16ths and $100 per acre. We have not countered his offer (first contact was at Christmas) and now he tells me that he is preparing to go the the state to lease any unleased mineral through the state mineral board. He went on to say that if the first wells prove successful they plan to drill around 50 total wells!  Does anyone have knowledge in this regard that they could share?  I've just joined and the insight offered here is an enormous benefit. Thanks to all who contribute.

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Permalink Reply by Spring Branch,mineral owner on March 25, 2011 at 22:12
Joe, I don't believe your answer about force pooling is accurate in Arkansas.  I would rather have an Arkansas expert discuss the specifics rather than attempt it myself.
Permalink Reply by Joe Aldridge on March 26, 2011 at 1:43

Yes, you are correct. My only knowledge is here in LA. Thanks

 

Permalink Reply by Joe Aldridge on March 26, 2011 at 2:49

I think you are correct about the Smackover being below HA but others will have to advise you on that. I'm in South central Louisiana and not that familiar with the stratification in that area. If you are correct then he would also have the Haynesville in that lease. You could specifically eliminate the Haynesville by description from the lease but an attorney would have to do that. I don't think that these people that are leasing would want to put that in the lease if that is the case.

Permalink Reply by Checkmateking on March 26, 2011 at 2:57
Why would you exclude the Haynesville Shale in Miller County? It doesn't exist there. It is a sand in Arkansas
Permalink Reply by Les Bamburg on March 26, 2011 at 6:02
Rebecca, see the attached for a stratigraphic reference to formations in your area.
Attachments:
Permalink Reply by Rebecca Lane on March 26, 2011 at 16:11
Les, many thanks for the reply and the information. The chart clearly shows the Haynesville above the Smackover. So how would a mineral owner lease the Smackover and be assured that the operator was not producing from the Haynesville too...? I think I understand about depth restrictions etc. but when an operator is drilling THROUGH a formation to get to another formation...and they are NOT going to produce from it...legally or illegally? it seems it is very advantageous for the...OPERATOR. Again, very grateful for the information.
Permalink Reply by The_Baron on April 1, 2011 at 5:39

It is not uncommon for one operator to control shallow rights, while another would control the deep rights.

 

Having a lease on the deep rights implicitly  allows an operator to drill throgh shallower formations. However, they would not be able to legally perferate in the shallower formations. You could easily lease depths for just the smackover, and could even reference a nearby well log and the depths on that log to make sure there is no confusion as to what was being leased.

 

You could even look at the nearest unit that has been formned for the particular formation you are trying to lease and use that definition in the unit order, if there is one.

Permalink Reply by Pat Patrick on March 31, 2011 at 13:21
Sounds
Permalink Reply by Pat Patrick on March 31, 2011 at 13:21
one
Permalink Reply by Pat Patrick on March 31, 2011 at 13:21
ose
Permalink Reply by Pat Patrick on March 31, 2011 at 13:36

Sounds like one of those pushey type land men!

The exclusion of the Haynesville  appears to have become a standard lease offer. Too many people looking for high lease prices.

The interest in the Ark/La border leasing is for the Smackover. some calling it brown dense.

My wife leased her Ark land near Three Creeks  for $300 per acre, 20 % , 3 yr and 4 yr some time last year,Pine Belt.

If it was Pine Belt that you talked to be aware they have a couple of apparent jerks working for them but can be easy to work with if you have the right person.

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