Replies to This Discussion

Permalink Reply by Skip Peel - Mineral Consultant on July 30, 2014 at 1:55

I don't think there is such a thing as "the going rate" for TMS minerals in general at this time.   The play area is too large and the well results to date are anything but uniform.  To calculate a reasonable market value at this time, location is very important. 

Take a look at this map of Wilkinson County to see what I mean.

http://www.ogb.state.ms.us/docs/tms/Legend.pdf

http://www.ogb.state.ms.us/docs/tms/MS%20TMS%20%28Wilkinson%20Co.%2...

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Permalink Reply by Skip Peel - Mineral Consultant on July 30, 2014 at 6:14

Maybe time to sell instead of buy.  Even without knowing the lease royalty I would consider that a fair market offer.  Yes, things have changed.  It's the Internet.

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Permalink Reply by sdmwhosane on July 30, 2014 at 6:39

I am 100% in agreement with you and yes they have and it is not crazy it is full blown insanity.  I got my feet wet in this play assembling a lease block for a TMS well drilled and completed by Petroquest in 2000 in Amite County.  Since then I have watched this play go on and off like a light switch and nobody has achieved payout on a well yet.  The money being paid for a yet to be economically successful formation makes me wonder who is footing the bills for those who make the drunken sailor look frugal.

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Permalink Reply by Skip Peel - Mineral Consultant on July 30, 2014 at 6:59

IMO the reason for the offer is a combination of improving well designs/results and the fact that two of the three main operators have depressed stock prices and limited financial resources which causes them to push the promote.  When sufficient wells have been drilled to delineate the play area I think there will be a relatively wide variation in per well production.  That is already unfolding.  For those in the right locales the TMS may be a long term success with secure economic fundamentals.  In other areas ROI will be modest and vulnerable to any negative swings in global crude prices.

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Permalink Reply by sdmwhosane on July 30, 2014 at 7:09

I wish all the operators God speed and hope you are correct in your prediction.  I arrived in Mansfield, Louisiana when the Haynesville play began.  I paid $250.00/acre when Mansfield was Louisiana's version of Woodville, Mississippi in economic terms.  Within a year I had paid $18,500.00 for the last lease I bought.  The town went from near ghost town status to boom town status.  It is my belief that since all industry has left Natchez and Woodville that the success of the TMS is the residents only chance see the quality of life improve.

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Permalink Reply by Skip Peel - Mineral Consultant on July 30, 2014 at 7:13

Yes, there are a lot of folks pulling for the TMS operators and a successful play could have a huge economic impact on both sides of the state line in that area.

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