State energy leases provide early Christmas
But offshore leases remain unattractive
Jeremy Alford
Capitol Correspondent


Published: Friday, December 11, 2009 at 11:34 a.m.
Last Modified: Friday, December 11, 2009 at 11:34 a.m.
BATON ROUGE — After opening the year with a string of record lows, members of the Louisiana Mineral Board spent Tuesday and Wednesday overseeing the most successful December energy lease sale for the state in 13 years.

It was a noteworthy event as well for Terrebonne and Lafourche parishes, which accounted for more than 19,000 acres that were up for bid during the annual holiday sale – unprecedented in recent memory. However, only 369 acres drew winning bids.

The local value per acre established by oilmen and private investors this month was $291, just shy of the $308 per-acre price Terrebonne and Lafourche notched in November.

Overall, the board awarded 38 leases covering about 5,640 acres statewide. Nearly $9 million in bonuses were collected from the winning bidders, bringing the total sum generated by the board since the new fiscal year kicked off July 1 to $34 million.

Technically, that fiscal year-to-date total is down from the $191 million the board had in its coffers in December of last year, but the inflated figure is due chiefly to the historic play in the Haynesville Shale area of north Louisiana. In December 2007, a better year for comparison, the board had collected only $16 million by now.

While this month’s sale showed that inland tracts in south Louisiana are on the uptick after months of dormant activity during the spring and summer, offshore leases remain unattractive to investors. In fact, there were no offshore leases up for bid at all this month.

Nonetheless, this week’s sale marked the fifth month in a row that leases in the Houma-Thibodaux region generated dollars locally and for state government.

Specter Exploration of Baton Rouge spent $94,700 on a 320-acre lease that runs from Bayou LeBlanc in Terrebonne to the Lafourche Parish line.

The lease awarded to JIL Exploration of San Antonio also spans both parishes, starting just south of Pointe-aux-Chenes and stretching through Bayou Jean Lacroix. JIL paid $5,200 for the 20-acre plot.

Covington Exploration Company, meanwhile, leased 29 acres in Terrebonne Parish for about $7,500, located in the eastern portion of Lake de Cade.

The board sold leases in 12 parishes, too: Acadia, Bienville, Caddo, Calcasieu, DeSoto, Jefferson, Jefferson Davis, Lafayette, Ouachita, Plaquemines, Sabine and St. Mary.

Of the 38 leases sold this month, the majority were in south Louisiana, with 23 leases sold in southern parishes and 15 in the north.

Of the 15 north Louisiana leases, 14 were sold in the area of the Haynesville Shale natural gas formation, meaning Bienville, Caddo, DeSoto and Sabine parishes. Lease sale prices remain strong in that area, with the 14 Haynesville Shale area leases averaging more than $6,100 an acre.

The lease prices the board has seen in the Haynesville Shale area in sales this financial year have remained at an average of more than $6,000 an acre since August. The figures for that area are strong compared to previous years, though not what they were during the heat of the 2008 rush.

For the parishes that have been the primary interest area for the Haynesville Shale, lease price sales averaged about $532 an acre in 2007 and about $252 an acre in 2006.

Jeremy Alford can be reached at jeremy@jeremyalford.com.

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