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 Spring Branch,mineral owner on -
My heirs think so! HA!
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Permalink Reply by Spring Branch,mineral owner on
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I agree completely with your "all of the above" , KB. The point is that the commission certainly has access to legal counsel who can insure that the lease has teeth, but to turn down the lease request because one of the commissioners comments, "we don't pimp out our acreage" is incredible to me. I know the Dominick family up in the Mira area and I can assure you they had adequate legal counsel.
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Permalink Reply by Spring Branch,mineral owner on
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I wouldn't disagree, but it was a small oil company which I had never heard of trying to get a well drilled who would have prob agreed to any reasonable terms to get the lease agreed to by the commission. IMHO, the lease request was turned down based on the bonus amount, judging from the commissioner's comment, though I wasn't there.
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Permalink Reply by The_Baron on
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The lease would more than likely be a state lease KB. In any case the mineral board would have to approve the lease.
The mineral board just might have an idea of what they are doing.
Have you ever seen a state lease KB? They are quite a document.
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Permalink Reply by The_Baron on
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The $1 acre lease that was put up for public bid, not once but twice.
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Permalink Reply by The_Baron on
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Never mind the Thousands of dollars in royalties generated by that $1/acre lease. There is more to the picture than just a bonus payment.
I'm sure the city has had no problem cashing their checks. -
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Permalink Reply by The_Baron on
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Anything higher will kill the deal in a typical cotton valley prospect.
Potential for roylaties with current offer, or nothing. Sounds pretty clear cut to me.
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Permalink Reply by The_Baron on
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I don't need your money. Its not my prospect.
I am simply stating that the potential revenue at the lease terms published was a fair deal. -
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Permalink Reply by BirdDawg, plain ole' idiot on
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Hey KB,
I can't wait for when "you know who" comes to you again to try to lease you so "you know what company" can begin Haynesville Shale 101 class. Who knows, it may even be 099 (remedial).
Anyway, I wish you would tape these conversations, its gonna have to be interesting. -
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RSP'd,
I'm still trying to figure out how that would work. You know "that company" actually has no leases in the area (not in the Haynesville). The good ole boys are just giving us working interest owners interests away under the disguise of "farm outs". Talking to lawyers now. Trying to figure out how this works. Personally, I hope that I have taken the last screwing I am going to take. If not, woe be to God, the next person that gives away more of my interest, well, I don't want to talk about it. I think all the bit Texas ranch owners need to buy us little piss ants out.
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KB, my rsp'd friend,
Believe me, I never again want to be a working interest owner. Unless me and some of my other buddies (not who you know) buy some depleted wells and do our thing. Then we are calling the shots. It works well, but the price doesn't support that now. Those guys we have been talking about would screw their mother (literally) and go home and sleep well with a smile on their face. I don't think you and others realize what kind of people we are talking about. Low life scum. But always the first to show up at the Baptist Church in Minden, and Ruston (Methodist in Ruston).
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