Replies to This Discussion

Permalink Reply by Skip Peel - Mineral Consultant on August 21, 2024 at 2:30

lee, more information is required.  The state O&G database, SONRIS, is organized by section-township-range.  An informed opinion depends on knowing that and you can likely find it in a deed or donation document.  Then, how many acres are you considering selling?  Then, do you have an oil and gas lease in force?  Someone buying your minerals would be stuck with that lease, if you have one.  If you do, what is the royalty fraction?  Would you just be selling minerals?  Or some surface?

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Permalink Reply by Ryan Howrish on August 21, 2024 at 5:51

Hi Lee, 

That is a great question and like Skip mentions, the value to a potential buyer depends on a lot of factors:

• Where are your minerals located (Section-Township-Range)
• Have your minerals been produced in the past and the well or wells are now shut in or plugged and abandoned?
• Are your minerals currently leased?  If so, what is the royalty rate?
• Why are your minerals not producing?  Is there a technical reason?
• Is there current activity near your minerals?  Field order or amended field order applications?  New permit applications?
• Is there a line of sight for development by an operator?  The closer to production your minerals are, the more valuable they are to a potential buyer.

Another option is to reach out directly to buyers and ask them to provide an offer.  I probably wouldn't accept the first offer but at least it provides you with a starting point to think through the process.

Ryan

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Permalink Reply by Skip Peel - Mineral Consultant on August 22, 2024 at 4:16

Ryan, while we wait for more from lee.  I have a question that I am getting from mineral owners a lot lately.  Being that you are an O&G member with a background that may offer some clarity on the subject, here is the question.  Where is the Mid-Bossier Shale deemed to be economic with currently available data, what locations by s-t-r are in your opinion prospective for Bossier wells in the near future?  Do you use a contour map?  Or an industry database? Obviously this is a question of value for any mineral owner in the defined Haynesville fairway contemplating a sale.  The difference between six total wells or twelve.  The difference between a HA drilling unit with five producing wells that may be 85% developed and one that with the same number of wells that may be only 42% developed.  I'm not looking for an opinion that includes re-frac potential, just future wells that would be drilled in say the 2025 to 2026 time frame.

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Permalink Reply by Skip Peel - Mineral Consultant on August 23, 2024 at 4:29

Ryan, it looks like we may have lost lee.  He may still be stuck in Angelina County and can't find the section-township-range for his DeSoto question.  I would very much appreciate your opinion on the Bossier here on the Louisiana side of the fairway as I am sure many members would.

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Permalink Reply by Ryan Howrish on Thursday

Hi Skip - I guess I forgot to click the follow button after I commented on this.  Sorry for the long delay in my response. From my experience both developing wells at an operator and evaluating wells for others, a reasonable assumption is that I expect the MB will be developed across most of the LA Haynesville play through most of TWP 13N.  There remains significant uncertainty in how many wells per section/unit will be drilled and how the MB will interact with the legacy HV wells, especially as the distance between the target zones narrows. There are a few MB wells in 14N that do not look great from a productivity perspective.

I don't have a specific contour map or industry database.  We do work with data providers that provide interpreted formations.  That coupled with my experience working the basin gives me a pretty good picture of the progression of MB development.

From a mineral buyer perspective, they are hesitant to value the MB as a viable target unless there are producing MB wells close to the specific s-t-r.  We have been successful in getting the mineral buyers to include the MB in their evaluation in several deals where they initially were not going to.

If people have questions about specific locations they can message me on here.

Again, sorry for the long delay.

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Permalink Reply by Quattro on August 24, 2024 at 13:15

I am interest to hear where mid-Bossier is relevant.

My family has several smaller tracts in Desoto.

One tract is relatively undeveloped for Haynesville.

Another near where I believe mid-Bossier was recently permitted.

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Permalink Reply by Skip Peel - Mineral Consultant on August 25, 2024 at 13:14

Quattro, it looks like we have lost Ryan and lee.  I understand why Ryan might not care to provide an opinion on the portion of the Haynesville fairway that includes economic Bossier shale.  The industry generally avoids discussing the Bossier for several reasons.  The definition of "economic" is highly dependent on the price of natural gas so it is an ever changing metric.  Additionally geography doesn't lend itself to the section-township-range land system.  Contour maps demonstrate this quite well.  There are no straight lines.  On the Petrohawk "porosity feet" map, the "10" contour line is generally considered economic if the price is right.  There are two contour lines inside the "10" line, "15" and "20" with 20 being the best rock.  For members like lee who are wondering about the value of the Bossier, it is difficult to find any mineral buyer who will factor the Bossier in their offers.  They would like to acquire mineral rights based solely on their opinion of the Haynesville in a given section and get the Bossier potential at no cost.  There will most definitely be some upside for the Bossier within the "10" line but it is hard to calculate and the timing of development is less than certain.

The "10" line goes as far north as portions of the 14N townships and as far south as portions of the 9N & 8N townships.  I am aware of at least one modern version Bossier horizontal well as far north as 15N-13W.  There remains little data on Bossier wells in the public record.  For many mineral owners, there is long term value in their Bossier reserves it is just difficult to have it recognized by mineral companies.  There are numerous alternate well field orders that include laterals labeled as Bossier (BSSR) on the Louisiana side of the fairway.  The operators have their eye on it and definitely plan to develop it in the future.  More Bossier wells are drilled each year but they are not obvious to the average mineral owner owing to the fact that the depth definition for all Haynesville (HA) units include the Bossier shale.  Only on the alternate well applications and field orders are Bossier wells occasionally labeled because those are basically spacing applications and well laterals must conform to minimum spacing regulations.

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Permalink Reply by Quattro on September 2, 2024 at 5:00

If I am reading correctly, (and there is a better than average chance I am not) it looks like Chesapeake has a permit for a couple of mid- Bossier wells in section 30 & 31 11N 12W. JUR RA SUG and JUR RA SUF.  In May (they slightly amended the permit)….again if I am reading correctly.  Is that area in play for Mid-Bossier?  Does it extend somewhat further south into 10N 12W?

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Permalink Reply by Skip Peel - Mineral Consultant on September 2, 2024 at 6:42

Yes, most all townships south of the 13 North township excepting possibly 13N-16, 15 and the western 2/3 of 14W are within the "15" contour line.  30&31 11N-12W is just outside of the "20" contour line.  What leads you to think that those wells in 30&31 maybe Bossier?

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Permalink Reply by Quattro on September 2, 2024 at 14:13

The section map says “Mid-Bossier Proposed Laterals”.

Not sure if this link will work:

https://ucmwww.dnr.state.la.us/ucmsearch/UCMRedir.aspx?url=http%3a%...

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Permalink Reply by Skip Peel - Mineral Consultant on September 2, 2024 at 14:57

Yes, it works.  Those are Mid-Bossier wells for sure but that is not a well permit.  That is a Field Order for spacing approval of the well laterals.  This is from an alternate unit well application.  When approved it allows the applicant or a successor operator to apply for a "permit to drill" for one or more wells that match those approved lateral locations.  A Field Order is effective indefinitely unless replaced by a future Field Order.  There is no imposed time frame for those wells to be permitted and/or drilled.  I've got a list of a number of Field Orders for Mid-Bossier or BSSR laterals but until they are drilled it is only a paper approval which doesn't help when trying to get a mineral company to make an offer that includes the value of Bossier wells.  I'm currently researching which Bossier wells have been drilled and their production volumes.  Only a drilled and producing Bossier well may be recognized by mineral buyers.  It's like pulling teeth but I'm trying.

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Permalink Reply by Quattro on September 3, 2024 at 15:36

Thanks for clarification.  There is a wealth of info on SONRIS but hard to understand and navigate for an amateur. 

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