March mineral lease sale brings $4.7 million
NEWS RELEASE
For Immediate Release
March 10, 2010
March mineral lease sale brings approximately $4.7 million
The state Mineral and Energy Board on Wednesday conducted its monthly lease sale in the LaBelle Room of the LaSalle Office Building in Baton Rouge.
The board collected more than $4.7 million in bonuses in the sale, bringing the total collected for the financial year that began July 1 to more than $49.9 million.
In Wednesday’s Mineral and Energy Board meeting, 15 leases covering more than 2,244 acres were awarded, out of 23 nominated tracts covering more than 18,752 acres, in the March sale.
The Board sold leases in eight parishes – Bienville, Bossier, Caddo, Cameron, DeSoto, Ouachita, Pointe Coupee and Terrebonne. Of the 15 leases sold, the majority were sold in north Louisiana, with nine leases sold in northern parishes and six in south Louisiana.
Of the nine north Louisiana leases sold, seven were in the area of the Haynesville Shale natural gas formation – in Bienville, Bossier, Caddo and DeSoto parishes. Lease sale prices remain strong in that area, with the 7 Haynesville Shale area leases averaging about $9,500 an acre. All but two of those leases went for better than $6,700 an acre.
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Editors: For more information, contact DNR Public Information Office at 225-342-0058.
Tags: $4.7, March, brings, lease, million, mineral, sale
Views: 89
Replies to This Discussion
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Permalink Reply by Skip Peel - Mineral Consultant on -
An interesting development in the monthly state lease auctions is the bidding of Matador Resources. This month's auction continues a trend of aggressive bidding by Matador. Here is an example:
A 16.64 acre Bossier tract lying in S1 - 15N -11W, S36 - 16N -11W, S6 -16N - 10W and S31 - 15N -10W received three bids with varying bonuses. Cypress Energy - $1,850 ($30,784), Classic Petroleum - $9,519 ($158,396.16) and Matador Res. - $18,214 ($303,086.96).
They certainly have a salutary influence on the average bid price.
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Permalink Reply by The_Baron on
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I guess since they have made some horrible wells in the north, they probaaly just want to participate in a few good wells..
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Permalink Reply by Skip Peel - Mineral Consultant on
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When a winning bid is almost twice that of the next highest, I imagine that management is questioning those responsible for the valuation equation. It's unusual to see this kind of spread.
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Permalink Reply by Skip Peel - Mineral Consultant on
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I wonder if the OP have noticed the premium they are paying? Probably not. LOL!
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Permalink Reply by adubu on
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Keith-Skip-Baron-ShaleGeo---what's the duration of these leases? Standard 3 years? or what? These are leases and not out right purchase of minerals? What are the general term of these leases--% royalty, etc.??
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Permalink Reply by Skip Peel - Mineral Consultant on
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abudu. All the bids discussed here were 25% royalties with the difference being the bonus offer. State leases are for a one year term.
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Permalink Reply by JHH on
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ShaleGeo, who/what is OPM? and Skip... do you have names of the other companies bidding for minerals (maybe along the Texas/La border.... caddo/desoto...?) if you have a link that lists the high bidders and location in the latest state mineral deals.... i'll be happy to do the legwork. thanks, jhh
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Permalink Reply by Skip Peel - Mineral Consultant on
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JHH. OPM is an industry term, it stands for Other People's Money! LOL! The same companies tend to bid each month as a proxy for an operator or as speculative investments. Occasionally an operator will bid in their own name but seldom are they the majors shale players. You can see the bidder and the tracts yourself. Go to SONRIS Lite, Look in the upper right search command box and Click on "Lease Sale and Tract History". Do not enter a tract number in the blank box just Click on "Submit Query". If you wish to look at prior auction results just click on the date and choose the month and year.
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Permalink Reply by Bell Family on
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I was offered 5,000 an acre for 3 years .....I received the contract and imagine my surprise when the amount wasnt what I was led to believe it was going to be. My question is is that amount per acre per year or just one price for all 3 years. This truly is a tricky business.
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Permalink Reply by om28v on
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It is almost always the bonus ( in this case 5,000 ) for the three years, not per year. If I were to sign a lease, there is no way I would do it without having a good attorney go through it to look out for my interests. There are many many more "tricky" parts to a lease than the item you mention. How many acres? Where are they? Did they include a second term to renew? What percentage royalty? Are you sure it's a lease and not mineral purchase? There are many many more things to find out about. Don't go it alone!
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Permalink Reply by Skip Peel - Mineral Consultant on
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State leases are for a one year term. If not drilled in that time, they may be extended for additional years at 1/2 the original bonus. They usually get drilled in the first year or dropped. They are too expensive to hold on to for long.
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