Replies to This Discussion

Permalink Reply by Bradley McWilliams on May 12, 2018 at 1:43

Not heard any announcements, so maybe what I heard was a little premature? But I heard the same story again that the area has been sold.  Seller retains an option on wells drilled, buyer commits to drilling 3 wells per year for the next 4 years. No idea who the buyer may be.

Permalink Reply by Skip Peel - Mineral Consultant on May 12, 2018 at 3:36

The "buyer", if that is indeed what they are, would have to be Ankor.  Their vertical Antley well reached TD and set the final casing string three weeks ago, April 21, and the company has not applied for a workorder to complete the well as of May 11.  I can't see any company making a multi-year, multi-well commitment without having figured out the secret to drilling an economic well.  If that had already happened, which it hasn't, the sale rumor would make some sense.

Permalink Reply by Bradley McWilliams on May 12, 2018 at 5:42

Completely agree with the statement that nothing has been proven, at least from what everyone has either heard, or more importantly, seen.  Something worth pursuing would most likely be generating activity with $70 oil. 

What I have heard has come from folks that would reasonably be expected to know, but they certainly aren't involved with the nuts and bolts of it, so until we see something it's at best hear-say.

If I hear again or more details I'll pass it on.

Permalink Reply by Skip Peel - Mineral Consultant on May 12, 2018 at 5:47

Thanks, bpm.  If Ankor were to start drilling one or more wells on SWN leasehold, I might give the rumor more credence.

Permalink Reply by Ben Barnhill on May 18, 2018 at 3:59

I beg pardon from everyone if my observations related to this discussions are off base or otherwise nonsense.

I and my sister own 126 acres in northern Union Parish within the Ora Field.  We were offered and accepted a "top lease" last summer that took effect this March. The leaseholder is Southwest, but was executed through "Dudley Land Company".  It actually surprised me that Southwest was interested in renewing the lease at all.  I and my sister didn't quibble over the lease as it was pretty close to the terms of the previous one and we had an understanding that the Brown Dense was pretty inactive anyway.

I periodically check activity on "gohanyesvilleshale.com" and noticed this discussion. Still, didn't see anything to get my hopes up over in this thread.  Then I saw an advertisement yesterday on Fox Business for a lithium extraction company with the entire ad highlighting their focus on the "smackover" region for lithium extraction. Further google searches on lithium and the interest of the industry in the Smackover region indicates the extraction process has similarities to drilling for oil and gas only pumping up lithium bearing "brine". It also indicates that lithium prices are high and has a very high return on investment.

I guess all this makes me wonder if southwest renewed all these leases with the intent of selling to lithium companies such as Standard Lithium. I believe it was an ad from that company with its CEO Robert Mintak highlighting "smackover" as a major area of interest for their company.

This is a link to an article discussing this companies leasing 33,000 acres in "the smackover" for brine wells and lithium extraction.

http://www.magnoliareporter.com/news_and_business/local_business/ar...

http://standardlithium.com/2018/01/08/standard-lithium-acquires-lit...

Any thoughts on this possibility?

Permalink Reply by Skip Peel - Mineral Consultant on May 18, 2018 at 4:16

Now that is interesting!  Thanks, Ben.  Did your top lease have any wording specific to the extraction of non-hydrocarbons?  Although the article references south Arkansas it's certainly possible the Smackover in Union Parish may be prospective for lithium also.  I am thinking that the reason SWN top leased you is more likely related to selling their leasehold to a company interested in the oily Lower Smackover Brown Dense.  There is so little intel coming out of Union that it's hard to tell.  I have read several unrelated articles of late that focused on the growing global demand for lithium so the Magnolia Reporter articles rings true for me.  Please keep us updated.

Permalink Reply by Ben Barnhill on May 18, 2018 at 6:05

There is language that includes extraction of "non-hydrocarbons".  I thought this was boilerplate language, but appears this gives the lessee rights to extract anything that falls under the general definition of "mineral". Don't know if this was actually catch all phrasing or if there was forethought that there may be other minerals of interest involved.  Might be something for land/mineral owners to consider in future leasing.

"and with the exclusive rights of exploring, drilling, mining, developing and operating for and producing, owning and marketing oil, gas, lignite, sulfur and all other minerals (whether or not similar to those mentioned) along with all hydrocarbon and non-hydrocarbon substances produced in association therewith (collectively, "Minerals")."

Permalink Reply by Bradley McWilliams on May 18, 2018 at 5:12

The lithium idea is interesting, and from what little I know about bromine production in south Arkansas, it all ties in.
Kind of off topic here, but I can't resist. I wonder if bromine production can be enhanced with hydraulic fracturing. One can only imagine the quandary that would result for the anti-fracturing individuals upon learning that their beloved batteries require fracturing to produce...

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