Today's Louisiana Department of Natural Resources, Office of Mineral Resources, State Mineral & Energy Board July auction of publicly owned mineral tracts includes 29 bid tracts totaling over 1500 acres in 3 parishes: Union, Claiborne and Lincoln, with the bulk of the tract acreage concentrated in Union. IMO, these tracts are associated with the Lower Smackover/Brown Dense prospective area which includes a similarly sized and adjacent area in S. AR. The bid tracts span a wide area that roughly is described in extent on the Northwest by Township 23 North, Range 5 West, the Southwest by Township 20 North, Range 3 West, the Northeast by Township 23N, Range 1 West and the Southeast by Township 20N, Range 2 East. These bid tracts represent the beds and bottoms of state owned water bodies and are more informally defined as being located in the proximity of Little Corney Bayou, Corney Creek, Bayou D'Arbonne, Middle Fork Bayou and Bayou De Loutre.
The import of these bid tracts, other than their specific locations, is that they are bids for state leases. By law state leases are for a primary term of one year. They may be extended for two additional years by the timely payment of a lease bonus equal to one half the original bonus amount for each additional year. For that reason, there is no need for companies interested in developing a prospect to acquire them far in advance. The time to acquire the rights to the state lands is after building a lease block(s) composed of private mineral interests. It is also in the interest of energy companies to acquire the state leases late in the process of building a lease block owing to the fact that the bids for those tracts, including bonus bids, are of public record and therefore are of value to mineral owners in the negotiation of future leases.
A state bid tract is included in the monthly auction at the request of the owner which may be a local municipality, school district, levee board or other public body, or the tracts may be nominated by a party interested in bidding for the lease rights. All 29 tracts in the July auction are nominated by Leslie M. Cooper. It is common for the nominee of state bid tracts and the bidding entity, whether one and the same, to be a third party representative of the company actually assembling the lease block with the intent to develop. That is to say that those hoping to know the name of the energy company or companies will not likely find their answer with these auction results. What will be established by these bids is a baseline value for leases in this prospective area at this early point in the play where there are few drilling and production units and even fewer well permits not to mention one completed well which is likely not economic. Lease values and offers are influenced by competition. It will be instructive to see if the auction of these tracts draws multiple bidders.
For those with a stake in this emerging Brown Dense prospect, I suggest the following:
I will post the results of the auction bids later today when they become available. Good Luck to all the members in the Brown Dense prospective area.
Tags:
Tony,
As you well know I shall remaing optimistic until I see a sufficient number of holes drilled to evaluate the potential. Further, there is a good possibility that "they" may find other prospective formations above the BD. I think that will happen if "they" look closely. Unfortunately all too often they do not take the time to look at shallower zones. I would go broke drilling a well as I want to see CORES and DRILL STEM TESTS and MUD LOGGER on site from the get go.
I can show you many wells which are highly productive which were drilled based upon info derived from drilling a target zone. I think that info derived from drilling BD may lead to horizontal wells in other zones such as Cotton valley, Pettet and upper Smackover.
But, I am going to wait to buy my Porsche! Good Luck to all of us!
"But, I am going to wait to buy my Porsche!"
Shoot Aubrey, everytime you mentioned CHK I went and bought a new car so now I have a porche, ferrari, and a H1.
Seriously though, anyone who bases important financial decisions off of a message board needs lessons on judgement. This is a lot of fun for me because I'm a dreamer but I keep my dreams in perspective. Financially I'm probably one of the most conservative members on this forum. I still only have basic cable and my wife never buys any name brand food. Only Sam's choice, hytop, archer farms for us. I mean who else but an old miser like me would spend so many hours trying to learn about a potential play when I only have approx 10 acres unleased.
I think the people who should remain grounded are the O&G companies. They are the ones who went crazy with the HA and started leasing at 20k/acre. All I have to do wait it out and I don't lose much if I do that.
A good lesson for those who get too enthusiatic would be the Austin Chalk play of the early 90s. The history of that play is interesting.
Skip,
I certainly concur in your advise. What I meant to say was "POSSIBLY PROSPECTIVE". The CHK man could very well have been using ATV and company truck to go deer hunting. It caught my attention because he was going in direction of the last producing Pettet well in Horsehead Field and thought perhaps CHK might have some kind of deal going with Jeems Bayou in order to hbp the 2000 acres they were holding. Fortunately we got unit dissolved after 50+ years
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