State leases are generally the last leases taken after operating companies have largely assembled their private leases.  At least one reason for this is that state leases are only effective for one year.  If not drilled in that time, the lessee must make an additional bonus payment to extend the lease and the extension is limited to one year.  After the second year passes an additional bonus payment is required and no state lease may have an effective period longer than three years.  Also of interest to mineral owners in the prospective area, state leases require a minimum quarter royalty.  We can revisit that in the future if the first wave of wells are economic.

The auction of June 10 will include 23 tracts in Rapides, Avoyelles and Evangeline parishes covering 1326 acres.  The number of tracts is actually more important than the total acreage because these state leases will fill in the missing pieces of the leasehold previously taken from private owners.  Traditionally the taking of state leases, particularly this many, signals the start of drilling programs.

So for all those member waiting to see well permits and rigs running on their lands, your wait is almost over.  Good luck to all.  Here we go.

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Replies to This Discussion

Skip, thanks for posting and logic behind what this all means. Will be interesting to watch.

 

You're welcome, RM.  That's what Keith pays me the big bucks for - not!  LOL!  I would like to see some of the other summer months' auctions include tracts further east in Point Coupee (one already on the docket), St. Landry and East and West Feliciana.  Then it will be a very interesting second half of 2018.

Hey Skip,  how will i locate the results of the June 10 state mineral lease sale?  i was looking around the DNR website and can't seem to find the acreage listings.   Just interested in who picks up the acreage.... particularly in evangeline... thx, HC

PS, then again I'm sure you will post it for us here on GHS.... 

The June auction is the 13th.  Winning bids are most often by companies that specialize in the auctions on behalf of a client so we may not see the operating companies names.  Use this link, leave the tract box blank.  You can use the drop down box to choose results by month.  Check out the May auction results.  ConocoPhillips did bid for themselves in that auction.  Unsuccessfully.

http://sonlite.dnr.state.la.us/sundown/cart_prod/cart_min_leas_tract1

thx Skip, that was easy!  Eagerly awaiting the second half of 2018,  hopefully things will start firing up!   

Skip, if the big bucks come my way I'll be the first to let you know and share :-D

Screen shot.  :-)

Skip:

Yes, state leases are still in fact a form of lease that seems to be going the way of the auk and the dodo - the rental lease.  Rentals on state leases are typically paid at 1/2 of the rate of the initial bonus payment.

If it's good for the State of Louisiana, it's good for me, too. First year bonus with subsequent two years at 1/2 of the initial bonus per year. If an operator doesn't like it, he can go drill somewhere else.  

In that case, Bob, you won't be accepting any royalty short of 25% either.  All state leases require a minimum of 25% in the bid.

Agreed, Skip. A 25% royalty leaves the operator with plenty of wiggle room. Best case scenario is everybody in the  unit is hopefully buried under royalty payments. Worst case scenario, there are no royalty payments. In that case, it's bummer for all involved, including the operator. 

ADV TRACT NUM

PARISH, TOWNSHIP& RANGE, AREA& BLOCK

TRACT ACREAGE

BIDDER NAME

BONUS

BONUS PER ACRE

BONUS LEASED

PRICE PER ACRE

RENTAL

ROYALTY

 

 

 

 

 

 

 

 

 

 

 

 

44899

RAPIDES 1, 12, 19, 2, 20, 21, 24, 25, 28, 29, 30, 31, 32, 33, 35, 36, 4, 5, 6, 7, 8, 9 T01N, T02N R01W, R02W

5.000

NO BID

.000

$0.00

$0.00

$0.00

0.000000

44900

RAPIDES 1, 10, 2, 21, 24, 28, 3, 31, 33, 34, 35, 36, 4, 6, 61, 68, 69, 70, 71, 72, 79, 80, 82, 9 T01N, T02N R01E, R01W

94.000

NO BID

.000

$0.00

$0.00

$0.00

0.000000

44901

AVOYELLES 1, 10, 11, 12, 14, 15, 2, 25, 26, 27, 3, 30, 34, 35, 36, 37, 38, 39, 40, 41, 42, 43 T01N, T02N R03E, R04E

27.000

NO BID

.000

$0.00

$0.00

$0.00

0.000000

44902

RAPIDES 31, 32, 4, 6 T01N, T02N R01E

51.000

NO BID

.000

$0.00

$0.00

$0.00

0.000000

44903

AVOYELLES 10, 15, 16, 17, 18, 19, 20, 21, 22, 28, 29, 3, 30, 4, 48, 49, 5, 50, 56, 6, 7, 8, 9 T01N R03E

72.000

 

TORRENT GULF COAST LLC

72.000

 

$37,224.00

$517.00

$18,612.00

0.250000

44904

RAPIDES 29, 30, 31, 32, 33, 4, 6 T01N R01E

70.000

 

BANFF ENERGY, L.L.C.

70.000

 

$36,750.00

$525.00

$18,375.00

0.250000

44905

RAPIDES 10, 12, 13, 18, 19, 27, 29, 31, 33, 34, 36, 37, 4, 6, 7 T01N R01E, R02E

79.000

 

BANFF ENERGY, L.L.C.

79.000

 

$41,475.00

$525.00

$20,737.50

0.250000

44906

RAPIDES 10, 11, 12, 19, 20, 21, 22, 29, 30, 31, 32, 33, 34, 37, 38, 43, 44, 46, 47, 48, 49, 50, 51, 7, 8, 9 T01N, T01S R01E, R02E

92.000

 

NO BID

.000

 

$0.00

$0.00

$0.00

0.000000

44907

AVOYELLES 10, 11, 2, 26, 28, 29, 3, 32, 33, 34, 35, 4, 42, 49, 5, 50, 51, 57, 6, 7, 8, 9 T01N, T01S R03E

70.000

 

BANFF ENERGY, L.L.C.

70.000

 

$36,750.00

$525.00

$18,375.00

0.250000

44908

AVOYELLES 10, 11, 2, 21, 26, 27, 28, 3, 30, 32, 33, 34, 35, 4, 5, 59, 62, 63, 64, 65, 8, 9 T01N, T01S R04E

117.000

 

BANFF ENERGY, L.L.C.

117.000

 

$61,425.00

$525.00

$30,712.50

0.250000

44909

AVOYELLES, RAPIDES 1, 15, 16, 2, 3, 31, 32, 36, 39, 4, 40, 41, 42, 43, 44, 47, 49, 5, 53, 54, 55, 56, 6, 7 T01N, T01S R02E, R03E

80.000

 

BANFF ENERGY, L.L.C.

80.000

 

$42,000.00

$525.00

$21,000.00

0.250000

44910

EVANGELINE, RAPIDES 1, 12, 13, 16, 17, 18, 29, 31, 32, 33, 36, 4, 5, 6, 7, 8, 9 T01N, T01S R01E, R01W

55.000

 

BANFF ENERGY, L.L.C.

55.000

 

$28,875.00

$525.00

$14,437.50

0.250000

44911

AVOYELLES 1, 11, 12, 13, 14, 17, 18, 2, 20, 22, 23, 24, 30, 31, 32, 35, 37, 38, 5, 6, 7, 8 T01N, T01S R03E, R04E

97.000

 

BANFF ENERGY, L.L.C.

97.000

 

$50,925.00

$525.00

$25,462.50

0.250000

44912

EVANGELINE, RAPIDES 1, 10, 11, 12, 13, 14, 15, 16, 17, 2, 20, 21, 22, 23, 24, 3, 4, 5, 8, 9 T01S R01W

74.000

 

BANFF ENERGY, L.L.C.

74.000

 

$38,850.00

$525.00

$19,425.00

0.250000

44913

AVOYELLES, RAPIDES 15, 16, 19, 25, 26, 27, 28, 29, 30, 31, 32, 38, 39, 40, 41, 42, 43, 44, 45, 46, 49, 51, 55, 56, 59, 60, 61, 62, 63, 67 T01S R02E, R03E

65.000

 

BANFF ENERGY, L.L.C.

65.000

 

$34,125.00

$525.00

$17,062.50

0.250000

44914

AVOYELLES 15, 16, 17, 20, 21, 22, 27, 28, 29, 30, 31, 32, 33, 34, 43, 46, 47, 49, 51 T01S R03E

47.000

 

NO BID

.000

 

$0.00

$0.00

$0.00

0.000000

44915

EVANGELINE, RAPIDES 10, 19, 20, 21, 22, 27, 28, 29, 3, 30, 31, 32, 33, 34, 4, 5, 6, 7, 8, 9 T01S, T02S R01W

31.000

 

BANFF ENERGY, L.L.C.

31.000

 

$16,275.00

$525.00

$8,137.50

0.250000

44916

AVOYELLES, EVANGELINE 1, 12, 2, 25, 31, 32, 33, 34, 35, 36, 37, 43, 44, 5, 6, 7 T01S, T02S R01E, R02E

31.000

 

NO BID

.000

 

$0.00

$0.00

$0.00

0.000000

44917

AVOYELLES, EVANGELINE 1, 10, 11, 12, 13, 17, 18, 2, 3, 4, 42, 45, 46, 61, 7, 8, 9 T01S, T02S R02E, R03E

28.000

 

BANFF ENERGY, L.L.C.

28.000

 

$14,700.00

$525.00

$7,350.00

0.250000

44918

AVOYELLES 10, 15, 16, 17, 3, 32, 33, 34, 4, 5, 8, 9 T01S, T02S R03E

12.000

 

NO BID

.000

 

$0.00

$0.00

$0.00

0.000000

44919

EVANGELINE 1, 12, 13, 14, 15, 16, 17, 18, 19, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 36, 37, 38, 39, 6, 7 T02S R01E, R02E

33.000

 

NO BID

.000

 

$0.00

$0.00

$0.00

0.000000

44920

AVOYELLES, EVANGELINE 1, 11, 12, 13, 14, 19, 2, 20, 21, 22, 23, 24, 25, 26, 27, 28, 3, 34, 35, 36, 37, 38, 4 T02S, T03S R02E

79.000

 

BANFF ENERGY, L.L.C.

79.000

 

$41,475.00

$525.00

$20,737.50

0.250000

44921

EVANGELINE 1, 10, 11, 12, 13, 14, 15, 16, 2, 21, 22, 23, 24, 3, 37, 38, 4, 43, 9 T03S R02E

17.000

 

NO BID

.000

 

$0.00

$0.00

$0.00

0.000000

 

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