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Permalink Reply by Skip Peel - Mineral Consultant 5 hours ago

Ed, your offers are not unusual.  In fact they are quite usual for those of us who track offers to buy mineral rights.  DeSoto has always been a focus of mineral companies as it is the only NW Louisiana parish that has Haynesville Shale over its entire extent.  All the other parishes only have a portion of their lands proven for economic Haynesville Shale production.  Also the southern half of DeSoto has both economic Haynesville and Bossier shale so think twice the number of wells per section.  Of course DeSoto also has the Logansport low porosity area that has seen little development since the early years of the Haynesville play.

One of the other drivers of mineral offers is competition.  For the first twelve or thirteen years of the Haynesville play there were a limited number of mineral companies that focused on acquiring those mineral rights.  Mineral companies are funded and directed by investors and for that earlier period investors preferred oil to natural gas and therefore focused on the Permian Basin and other oil basins.  Now investors believe that the economic life of natural gas is longer than that of oil.  Investor interest in LNG exports is one of the main drivers of that along with the more recent interest in AI and data centers that are huge users of electricity. The other side of the competition dynamic is the decreasing volume of Haynesville mineral rights that are available to be purchased.  We are now seventeen years into the play and a lot of mineral rights have been sold.

These are the general dynamics driving the increase in offer amounts but details remain important to mineral companies.  There are two main priorities for those companies.  The first is the prospect of new wells in the foreseeable future.  Mineral companies research the publicly available data to see where the major Haynesville operators are signaling they will  drill their next wells.  Since Haynesville and Bossier wells produce 70 to 80% of their lifetime volume in the first 24 to 30 months of production, buyers want to get in on first production of new wells.  The fact that many new wells are drilled in groups make this even more important for early return on investment.  The other dynamic is the opinion of where Bossier shale wells are or will be economic.  Generally speaking the southern half of the defined Haynesville fairway has economic Bossier reserves.  The northern half only gets Haynesville while the southern half gets both Haynesville and Bossier so twice the number of wells per section.

The first step in being aware of new wells for your section or sections is a notice letter from a law firm representing a Haynesville operator.  That first step in the process of drilling new wells is the only one that requires that you be "noticed" and that "Field Order" once approved is effective indefinitely.  An operator could turn around and drill in the next few months or they could wait several years.  The second regulatory step is a "permit to drill".  I call that first step the "spacing order" because it must show that horizontal well  laterals meet the state set back requirement.  Once an operator has that approval they can get one or more well permits that match those spacing requirement.  Mineral owners miss that step unless they learn to perform simple database searches.

I have heard of both Chicot and Pelican and I suggest that your read through the entirety of my discussion thread, Seller Beware!!! The Pitfalls To Be Aware of in Mineral Sales.  I'll post a link to it below.  Good Luck.

https://gohaynesvilleshale.com/forum/topics/seller-beware-1

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