Caddo Commision Needs to read up on Depth restrictions
From The Times
Caddo knocks mineral lease off agenda
By Adam Kealoha Causey • acausey@gannett.com • December 16, 2008 2:00 am
Buzz up! Caddo commissioners won't consider a mineral lease Thursday because at least one member believes they should wait for a bigger offer.
The commission voted the contract off its agenda Monday.
Red River Oil and Gas is seeking the rights to about four acres of parish rights of way on Gilliam Scotts Slough Road, northeast of Mira.
Commissioner John Escude led in the dissent with the parish administration, which brought the proposal to the commission. "We don't go around pimping our property, so to speak. I don't see the point to leasing this."
The commission garnered $17.6 million for Haynesville Shale mineral leases during the summer, with a payout of more than $30,000 per 585 acres up front.
The Gilliam Scotts Slough Road agreement would draw at least $600 an acre in lease bonuses and 25 percent of royalties from producing oil or natural gas wells. That would be a "paltry" sum, Escude said.
But the lease Public Works Director Robert Glass helped write does not include the depths of the Haynesville Shale, the rock formation that led to a now nearly dormant leasing frenzy during the first half of this year. A new lease would have to be written to drill down two miles — where many geologists say northwest Louisiana's natural gas-filled rocks are.
Last week's state Mineral Board lease sale saw per acre bids in DeSoto, Red River and Natchitoches parishes range between $225 and $611. The board approves mineral leases on government lands.
Commissioner Doug Dominick said, if necessary, he would abstain from voting on the lease to avoid ethical issues since he has relatives who live near Mira.
Glass, who said Red River Oil and Gas has signed leases with some nearby private property owners, pointed out Dominick Road No. 1 intersects Gilliam Scotts Slough Road.
In my not so humble opinion, Obviously the commision has no clue what it is doing. $600/acre is fantastic for the depths above the Haynseville. All they are doing is restricting yet another company from exploring shallower plays.
Caddo knocks mineral lease off agenda
By Adam Kealoha Causey • acausey@gannett.com • December 16, 2008 2:00 am
Buzz up! Caddo commissioners won't consider a mineral lease Thursday because at least one member believes they should wait for a bigger offer.
The commission voted the contract off its agenda Monday.
Red River Oil and Gas is seeking the rights to about four acres of parish rights of way on Gilliam Scotts Slough Road, northeast of Mira.
Commissioner John Escude led in the dissent with the parish administration, which brought the proposal to the commission. "We don't go around pimping our property, so to speak. I don't see the point to leasing this."
The commission garnered $17.6 million for Haynesville Shale mineral leases during the summer, with a payout of more than $30,000 per 585 acres up front.
The Gilliam Scotts Slough Road agreement would draw at least $600 an acre in lease bonuses and 25 percent of royalties from producing oil or natural gas wells. That would be a "paltry" sum, Escude said.
But the lease Public Works Director Robert Glass helped write does not include the depths of the Haynesville Shale, the rock formation that led to a now nearly dormant leasing frenzy during the first half of this year. A new lease would have to be written to drill down two miles — where many geologists say northwest Louisiana's natural gas-filled rocks are.
Last week's state Mineral Board lease sale saw per acre bids in DeSoto, Red River and Natchitoches parishes range between $225 and $611. The board approves mineral leases on government lands.
Commissioner Doug Dominick said, if necessary, he would abstain from voting on the lease to avoid ethical issues since he has relatives who live near Mira.
Glass, who said Red River Oil and Gas has signed leases with some nearby private property owners, pointed out Dominick Road No. 1 intersects Gilliam Scotts Slough Road.
In my not so humble opinion, Obviously the commision has no clue what it is doing. $600/acre is fantastic for the depths above the Haynseville. All they are doing is restricting yet another company from exploring shallower plays.
Views: 49
Replies to This Discussion
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Permalink Reply by The_Baron on
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I know..They have lost their minds. I too would turn down $600/acre for all depths, but this was excluding the HA.
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Permalink Reply by Skip Peel - Mineral Consultant on
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It would appear that Mr. Glass pointed this out to the Commission. Duh! Our elected representatives at work! Makes you wonder what they would do with all those federal dollars for local infrastructure proposed in the stimulus plan.
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Permalink Reply by The_Baron on
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In march before the HA was made public, $600/acre was almost unheard of. People outside of the HA area are still getting $140-200 acre and rarely get 1/4 royalty.
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Permalink Reply by The_Baron on
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For a hosston or Cotton valley well, that just may be a dry hole waiting to happen it may be so.
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Permalink Reply by BirdDawg, plain ole' idiot on
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Hey rsp'd,
And you may very well be right. And that is definitely your right. Not arguing, I just think thats a decent offer and maybe get a check rolling in. Just my opinion. Please don't take me wrong.
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Permalink Reply by The_Baron on
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KB probally wouldn't lease for a 100k an acre, she would still be wondering what the angle is...
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Permalink Reply by The_Baron on
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My apologys KB, worst part is that I should know better, correction has been made.
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Permalink Reply by The_Baron on
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The cap does not apply to Bonus Payments or Royalties. They would be paid directly to the parish (with a fee to the state if the lease goes through the mineral board )
The cap you speak of is the parishes share or severance taxes which is paid on all production in the state.
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Permalink Reply by Spring Branch,mineral owner on -
Just curious, KB. How much of your money have you ever put at risk in the drilling of an oil or gas well? Not trying to fight.....just wondering if you have ever had a working interest in a well where your money was at risk.
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I am sorry, and not trying to be argumentative to many of my friends, but I think $600 and 25% is a good offer for non-Haynesville rights. And it may stimulate shallower drilling. I would take it, but then again, I am a self professd "stark raving idiot".
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