Replies to This Discussion

Permalink Reply by Dry Hole on December 23, 2011 at 5:11

  Thanks dbob,

 On page 12 Forestar claims only 10,700 acres in the Deep Bossier --- This seems small for they have lots of minerals in   Eastern Trinity County ie Boggy Slough (17,000 acres) plus much more outside of Boggy Fence --- their ownership (Temple) goes back over a century so it is a cinch that they have 100% net minerals on any acreage that they have EVER owned .

  Makes me wonder about the size and scope of the Leor deep  play in that area ?

Permalink Reply by jffree1 on December 23, 2011 at 7:47

I think the correct assumption on Forestar (Temple) minerals is that they still own 100% of any portion of the minerals that they ever owned because they very seldom sell land and then they don't sell minerals.  

They have, though, acquired acreage (in numerous counties) over the years that they have never owned 100% of the minerals on.  

Permalink Reply by jffree1 on December 23, 2011 at 8:05

Their map showing leased & unleased acreage is pretty interesting, too.  In their 3Q 2009 presentation, most of the acreage in Sabine and San Augustine was leased (by EnCana).  If you compare the two reports, that acreage is now unleased so that leads me to think that EnCana declined to exercise their two year option to extend. 

Attachments:

• Forestar Group 3Q09.pdf, 1.4 MB

Permalink Reply by dbob on December 23, 2011 at 17:00

My guess is that Leor has everything in trinity County that is green, plus some federal leases that were acquired by Martin Fuels in early 2011 http://www.blm.gov/nm/st/en/prog/energy/oil_and_gas/lease_sale_noti...

On Boggy Slough, it may be an interesting challenge to develop with The Conservation Fund now in control of some of the surface.

https://www.conservationfund.org/taxonomy/term/120

Jffree - they show that acerage as south of the primary haynesville/bossier activity on page 14.  My guess is that is aprt of the area that is far enough south and not as productive for drilling in the current price environment,  

Permalink Reply by jffree1 on December 24, 2011 at 5:37

What??  Surely you agree that it's possible to produce the minerals and "conserve" the surface concurrently (I'm being facetious, of course)?  I don't know anything about the minerals (title) in Boggy but I bet money that Temple didn't give up all right to develop them, if they own them... even if it is challenging.  It's getting an operator to bite that's the issue, IMO.  

I agree about the leases.  I read through a couple of them and the extension bonus was much higher than the market today. I'll just say that they got in on some of the "craziness" of 2008 and leave it at that. 

Permalink Reply by Dry Hole on December 24, 2011 at 7:49

 jffree,dbob

 I don't Question  that Temple owned some acreage without minerals somewhere ---- I am just trying to say that their property up and down the Neches River and in Eastern Trinity Co. was PART of their core ownership (century old) and most likely had MOST ALL the minerals along with the surface.

   I am also aware that Temple's surface use provisions were strong enough (for at least Boggy Slough) that it had a tendency to "force" drill sites on neighboring property --- I am not sure how that might have changed since Forestar (split) now controls the minerals but one can assume that the major stockholders are still the same folks.

  Would also point out that only a portion of Boggy Slough went in that Conservation Fund and some of those things can have reservations for drill sites and even hunting and timber harvest but  I am no expert on what that one might say or why they might have deeded it away unless they were trying to keep International Paper (take-over) out of the "core hunting grounds"

 One thing is now clear--- the once all powerful and huge Temple Dynasty that lasted well over a century did not last long after it was divided into 3 different public business entities and only Forestar (minerals) now remains so they may have less surface provisions in the future.

Permalink Reply by jffree1 on December 24, 2011 at 10:21

"once all powerful and huge Temple Dynasty that lasted well over a century"  

It is sort of sad to see the end, isn't it?  And you are so right... it didn't take long to happen once they split it up.  

Permalink Reply by Dry Hole on December 24, 2011 at 11:20

Jffree, I suppose that the future will tell if the " leadership" were Hero's or Just short sighted and Greedy ------- the bank that spun-off (GFG ) must have had issues serious enough to make the spin-off moves unavoidable but even TIN took some drastic moves to liquidate major assets ----- now it seems that the shareholders and lien holders that got hurt in the Guaranty Bank are filing claims against Temple (TIN) and might just step in and  claim  that sale to IP ??? ------ Wonder if these folks might look at Forestar if they don't get satisfaction out of TIN ?? ------ To me the Forestar Group seems like the sack of Cherries out of all the assets so  bet they are untouchable ----- Again, the result of these events  that will be significant for O&G will be LESS surface provisions and terms ( when 90% of your income stream is from O&G they will be forced to work with the Industry)

Permalink Reply by jffree1 on December 24, 2011 at 12:43

Thank Carl Icahn.  He pushed them to split up the company and it may have had something to do with the weakness of Guaranty Bank.  I took a nice bump up from the Icahn bid and sold my TIN before the split.   

It will be interesting to see what shakes out with the Guaranty shareholders.  I don't know if they can go after FOR and I suspect that that Forestar is probably well insulated against any fallout if they tried it.  

I'm wondering why TIN wouldn't (couldn't?) try to sell off some of the sawmill assets to make a settlement offer.  It's pretty clear that IP wanted the box plants and paper mills. 

Permalink Reply by dbob on December 26, 2011 at 8:24

My understanding is that IP intends to sell off the saw timber/building products assets in an organized manner - perhaps even waiting for the economy to recover more before divesting.  

On the partial transfer of Boggy Slough, I didn't intend to suggest it couldn't be drilled - most likely its still a case where the mineral estate has primacy - I actually worked on the permitting for a similar project in the recent past, and other than a few extra months of red tape, the site was constructed and drilled without issue.  Wetlands and related issues will probably add $150,000 to the cost of each of the well sites along the river, so a prudent operator will avoid those if possible until the play is proved.  

 On the subject of Boggy Slough, I know an old timer that talks about a blow-out there in the 1980's while drilling fairly deep and they hit a high pressure pocket.  He was on the rig, and on one got hurt, but it apparently blew drill stem everywhere.  The depth I recall would put it in a similar class to the Forestar well, but I've never been able to correlate the described depth to a RRC permit.  I trust the oldtimer - It was more of a discussion about the area, well removed from the current talk (late 2006 or early 2007 time frame).  

The Forestar presentation notes that production facilities are being built - My guess is that at the present time, the production facility corresponds to the most valuable structure in Trinity County, unless the historic value of the Court House in Groveton can be quantified 

Permalink Reply by Dry Hole on December 26, 2011 at 9:25

 Dbob , u think the appraisal district might pay u for that picture of the leor ?  maybe hire you as a consulting GURU to ID and value the different parts ? lol -------- what is your best $ guess on that surface equipment ?

 The only blowout that  I can recall might have been on the Shell Well (Temple minerals) and it is < 1 mile from Boggy Slough as a crow flies but the time frame would have been 10 yrs earlier ---- I remember the workers being scared to death of that well. The wells that went down in the early 80s were all drilled by Houston Natural Gas (HNG) and were Glenrose or Travis Peak-- IF MEMORY SERVES.  I will try and ask a few friends if they remember a blowout in Boggy and someone getting hurt ---- was there a fire ?

 OMG-- dbob are folks that can remember things from the 1980s OLD TIMERS ALREADY ???

Permalink Reply by jffree1 on December 26, 2011 at 10:12

Am I an "old timer"?  I was 30 in 1984, LOL!

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