NEW ORLEANS--(BUSINESS WIRE)--Aug 13, 2018--Amelia Resources LLC announces the sale of 40,000 net acres in the Louisiana Austin Chalk and LAMS Stack plays.
Amelia Resources announced today that it has sold 40,000 net acres of newly acquired leases to an undisclosed U.S.-based buyer. The acreage block is located in the core of the Louisiana-Mississippi (LAMS) Stack Play on the eastern side of the Louisiana Austin Chalk trend.
Amelia's President, Kirk Barrell, said, “With consistent higher oil prices, the stacking of the Austin Chalk and Tuscaloosa Marine Shale (TMS) make for a very attractive target. Continued success in the Texas Austin Chalk and comparable matrix porosity across Louisiana and Mississippi present an excellent opportunity for expansion into a new play. We are excited to bring another new player to the region.”
Amelia’s buyer focused where both the Austin Chalk and TMS have robust reservoir characteristics. Barrell stated, “We already have some of the best U.S. operators committed to the play in EOG, ConocoPhillips, and Marathon. With their significant experience in the same geologically-aged reservoirs in Texas, we have high hopes for the future of this stack play.”
With 28 years of experience across Central Louisiana and Mississippi, Amelia Resources has evaluated over 1,800 wells in the Austin Chalk from Mexico to Mississippi. Utilizing a diverse dataset of well logs, petrophysics, geochemistry, seismic, and gravity, the company has pursued the most geologically and economically attractive areas of the play.
The company plans to debut 394,000 additional acres this week at the Summer NAPE in Houston, August 14-17, 2018.
Amelia Resources LLC is a privately held exploration and production company. The company generates drilling prospects and is actively engaged in several projects across the onshore Gulf Coast. The company has closed $261 million of transactions in the TMS, Eagle Ford, Permian, Austin Chalk, and Terryville Plays over the past six years. Amelia was founded in 2003 by Kirk Barrell and has offices in New Orleans and St. Francisville, Louisiana. The company leverages its 33 years of geological and geophysical experience to obtain strategic positions in drilling projects. Updates on the Austin Chalk and TMS projects are provided by the company at: www.tuscaloosatrend.blogspot.com
So what did Kirk get out of the deal? Would it be something like $200/acre bonus and an ORRI? Or does he negotiate a flat fee from the buyer?
They give nothing up-front to landowner and get nothing up-front. Under our deal (which expired after 6-months and we elected not to extend) with Amelia, they were to get 8% of bonus and 3% of royalty if they flipped deal, as he was shooting to secure a 20% no cost royalty for landowner/us (which means he was to lock in a 23% no cost lease with operator). The optional bonus payment after 6-mths (or perhaps a year for some agreements) seems to just be a 'bone' they dangle as don't see where Amelia could pay that kind of bonus money out (on the 384,000 acres in W. Fel, they were talking about raising that to $900 - so that would be 345MM out of Amelia's pocket to secure option on all - even at $400 per acre, not the kind of money they would likely pay out) . Their intent is to 'flip' deal within the 'ride' (free) period. We had our own personalized lease we were going to use if they were able to flip the deal. Amelia was very up-front with us and do think they can help drive up bonus payments when they have enough acreage signed up in a 'hot' area that the operator must take. However, does seem operators will avoid this type of 'pressure' at all cost and just wait out this approach when possible. JMHO
It's a speculative industry. And this is very early in a potential play that is not an unconventional reservoir. If it was, the dynamics would be much different. Until exploratory wells prove up economic areas, leasing very large areas will be a crap shoot. Those unleased mineral owners who end up in proven economic areas can likely do better than the terms offered by Amelia. Those who end up in non-economic areas will get nothing. So, plenty of risk to go around for all parties.
Thank you, Thomas. Much appreciated. The 3% ORRI is a mouthful of a bite for Kirk. Nevertheless, I can see both sides of the coin. Still, landowners might be surprised that there are all sorts of "free royalty" clauses. And they also might be a little shocked by how many deductions can still be gobbled up out of the mailbox money. That said, if the concept proves out and the wells are good, probably many mineral owners will be happy to get what they get, I guess. Some money is better than no money.