Replies to This Discussion

Permalink Reply by Skip Peel - Mineral Consultant on October 16, 2009 at 11:15

Bud. The offer is low. Way low for your location. Be patient. Other offers will come in time. Go to SONRIS Lite, search by "Wells By Organization", input Empresa. Note that they have NO HA completions. Vertical or horizontal. And none permitted. They are a Hosston/Cotton Valley developer. Not a Shale Player. However I would like to remind members that the terms of your lease will be honored by whatever company ultimately becomes the operator in your section. So if you got a sweet deal from a company like Empresa it might be good to sign with them and then have a Chesapeake or Petrohawk actually do the drilling. This ain't a sweet deal.

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Permalink Reply by Bud on October 16, 2009 at 11:32

Thanks Skip. That was my thought also. Based on some of the information I have seen on the site, it seems that the price range seems to be more in the $5000/acre range. Do you think that a company like in Enpresa is just trying to get leases to sell at a higher price later rather than drill? It is frustrating that production data on nearby wells has not been published yet.

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Permalink Reply by Skip Peel - Mineral Consultant on October 16, 2009 at 11:45

Bud. IMO, Empresa is not "flipping" leases. At least I haven't run across any evidence in the public records of Caddo Parish. They, like other small to medium size operators, know the business well but would rather participate as a Working Interest (WI) than drill HA horizontals on their on. They might well retain the shallower depths in a lease to develop themselves and "farm out" the deep rights to a Shale Player. And no, Bud, $5K is not the price range for 183 acres in a prospective location. Particularly depending on where those acres are located within the section. I don't wish to sound like a broken record but at this stage of the play every mineral tract has a unique value. Those who wish to state $5K as the "going rate" are correct only when the tract in question is small. It's a good offer for a residential lot. Or for a tract under 20 acres in a less prospective location.

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Permalink Reply by J. A. on October 16, 2009 at 23:50

The going rate now is 5k and that is what a birdie from one of the top 3 largest leashold for HA told me this summer, It's ok to disagree. In my opinion people benefit financially on ths website so be careful who you believe. I personally think people would not spend every waking moment unless there is a benefit. It's like it's a JOB
Have a nice day

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Permalink Reply by Skip Peel - Mineral Consultant on October 17, 2009 at 2:23

JA. When you get the time, please define "going rate" for us. If you are unsure just ask your birdie.

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Permalink Reply by Skip Peel - Mineral Consultant on October 17, 2009 at 2:50

Jay. I started noticing the upward creep in accepted lease offers about 3 months ago. It's been steady since. While I agree that the price of natural gas plays a part, my interest is less in the dollar figure than in a definition. Is the "going rate" for one acre only? Is it different for 50? Does it take into account the potential value of the surface? Or just the minerals? Should it be higher in a section where competition exists between two or more companies attempting to establish development block? Does the production of nearby wells influence value? Is the section under unit order? Is there a HA horizontal well permitted? Or drilling? The people on this website that I would like to see benefit are the land/mineral owners. And I think much of what I'm hearing called a "going rate" is too low in many instances. Pat answers can give false impressions.

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Permalink Reply by JHH on October 17, 2009 at 2:58

Skip...
I'm still perplexed as to how the city of Shreveport can get $8,700/acre on city land... rights of way... near parkland... neighborhoods... no infrastructure to get the gas out... many local and state regulations... plus $2-million penalty per year for not drilling within the term of the lease... while us landowners out in the country... with fully titled property... in big chunks of land... easily drilled... easy to build pipelines when needed. Is it politics or the producers playing a better game of cards? Your insight will be very helpful. thanks, jhh

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Permalink Reply by Skip Peel - Mineral Consultant on October 17, 2009 at 3:14

JHH. The auction process and the fact that it's the only means for companies to gain the right to develop those public minerals. I understand your confusion. And you are correct concerning the drawbacks that exist with developing urban areas. It's not politics; it's business. And the industry doesn't have a better hand; they have more experience playing their hand. I see some amazing lease term in cases where mineral owners understood the value of their minerals. Everyone would like to get one of those leases but the companies don't just give them to anyone. It is my opinion that those really outstanding leases were the work of professionals hired to negotiate or to advise the landowner. I understand that not everyone can afford or should pay for professional help. In that case they have to get their knowledge on their own. It is my desire that if they get it here, it's reasonably accurate.

Permalink Reply by Henry on October 17, 2009 at 4:09

Skip,
You are dead-on right. I'll offer other factors that might result in a high lease price of land. Maybe the landowner has the last unleased 100 acres in a section that is otherwise fully leased. Maybe (when gas gets to $6.00) the landowner realizes the huge potential from going unleased, and is willing to do so, if necessary. Maybe all the other leases in the landowner's section are about to expire. In these three cases, it looks to me like the landowner has the advantage over the o/g company.

Lease prices can only go up if landowners don't cave in to lowball offers. CHK's latest investor presentation shows them making money hand-over-fist on these Haynesville wells. Landowners deserve to make their fair share too.

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Permalink Reply by E & E on October 17, 2009 at 4:50

Amen Henry
Earlene the barefooted UMO

Permalink Reply by J. A. on October 17, 2009 at 5:15

Skip,
Your sarcasm is appreciated and noted. My Birdie knows your motives and works for a very very big major natural gas company.
Do you claim to know everything?
I am having a really good day and I am just having fun so don't take that seriously../.

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Permalink Reply by Skip Peel - Mineral Consultant on October 17, 2009 at 5:33

J.A. I won't. Skippo

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