Replies to This Discussion

Permalink Reply by Natch N3 on August 7, 2008 at 1:06

http://www.natchitochestimes.com/articles/2008/08/07/news/02board.txt



ARTICLE

School board considering gas leases

Marjorie McKeithen spoke to the school board Tuesday about putting its property up for gas leases. McKeithen is secretary of the Louisiana Mineral Board.
Published: Wednesday, August 6, 2008 9:34 PM CDT
If the Natchitoches Parish School Board wants to get bids on gas leases for its property, it must meet an Aug. 25 deadline.

During a committee meeting Thursday, Sec. of the La. Mineral Board Marjorie McKeithen outlined steps the school board should take if the members want her office to handle the bids for lease at the mineral board's November meeting.

The school board must pass a resolution by Aug. 25 and provide the mineral board office with a list of properties and descriptions. The mineral board charges no fees to broker the leases for municipalities and governmental bodies but charges a $400 nomination fee to get the property on the bid list. McKeithen said the companies that lease the land will pay that cost back to the school board.

Should the school board lease its lands, it can keep the rights to the timber.

McKeithen said that other municipalities in north Louisiana are getting "unbelievable prices" for gas leases. Caddo Parish received $17 million for leasing 585 acres at $30,212 per acre plus 30 percent royalties.

Desoto Parish received over $28 million for leasing its land at $27,500 pre acre and 27.5 percent royalties.

McKeithen said her office still expects to get good prices as the leasing moves into Natchitoches Parish. Although the extent of the Haynesville Shale is not know, McKeithen speculated that it "goes right through the middle of Natchitoches."
The school board can specify a minimum bid for leases and royalties. If the minimum is bid, the school board must accept it. If no minimum is stipulated, then mineral board geologists evaluate all bids and can reject them if they feel the bids are not comparable to adjacent property bids.

McKeithen met with Mayor Wayne McCullen and NSU President Randy Webb Thursday to offer her office's services.

Permalink Reply by Caroline B on August 7, 2008 at 18:02

Thanks for posting this article. It will be interesting to see if they get bids on their properties. I also find Ms. McKeithen's quote very interesting about how she speculates that the shale "goes right through the middle of Natchitoches." I personally hope it covers the entire parish!

Permalink Reply by no name on August 11, 2008 at 13:18

Haynesville Shale Leasing and Operational Update

Petrohawk currently owns or has commitments to acquire over 300,000 net acres in what the Company believes are highly prospective areas of the Haynesville Shale and Bossier Shale plays in Northwest Louisiana and East Texas. Approximately 50% of the 300,000 net acre position is committed to the Company for longer than a three year lease term, extending the overall timeframe for development of this substantial acreage position. Including acreage held by production, Petrohawk's cost in the play currently averages approximately $5,000 per acre.

Petrohawk's first well in the Haynesville Shale, the Elm Grove Plantation (EGP) #63 (100% working interest), located in Section 9 / Township 16 North / Range 11 West, Bossier Parish, Louisiana, had an initial production rate of 16.8 Mmcfe/d and has averaged 13.7 Mmcfe/d over the first 30 full days of production with an average flowing casing pressure of approximately 5,100 pounds per square inch, primarily on a 20/64" choke. A recent analysis of multiple core samples from this well by an independent laboratory confirmed rock properties consistent with the productive qualities of the well. More significantly, the analysis indicated a measured gas in place volume for the well of approximately 1.255 million cubic feet per acre foot, which, if the data is uniform across the section, could equate to an estimated 170 Bcf of gas in place within the section where the well was drilled.

Petrohawk's second well in the Haynesville Shale, the Hutchinson 9-5 (91% working interest), is located in Section 9 / Township 15 North / Range 12 West, Caddo Parish, Louisiana. The well was completed on July 29 and tested at a rate of 16.7 Mmcfe/d on a 22/64" choke with 7,325 pounds per square inch of flowing casing pressure. Pilot hole data revealed approximately 151 feet of net Haynesville Shale at a true vertical depth of 11,222 feet. The well was completed with a nine stage fracture stimulation, including approximately 2.5 million pounds of sand.

The Hunt Plywood 36-11 (100% working interest), located in Section 36 / Township 15 North / Range 13 West, DeSoto Parish, Louisiana, is currently drilling in the lateral portion of the well. Petrohawk expects to reach total depth in mid-August and estimates completing the well in early September. Data from the pilot hole analysis indicated approximately 160 feet of net Haynesville Shale at a true vertical depth of 11,476 feet.

Petrohawk's first non-operated Haynesville Shale well, the Whitaker 23 #1 (17% working interest), is located in Section 23 / Township 15 North / Range 13 West, DeSoto Parish, Louisiana. The well is currently undergoing completion operations. Data from the pilot hole analysis indicated approximately 158 feet of net Haynesvile Shale at a true vertical depth of 11,147 feet.

To facilitate transportation of expected production from North Louisiana to premium markets, Petrohawk is in the process of negotiating a series of strategic marketing arrangements. Additionally, the Company plans to construct multiple standalone gathering systems to cover anticipated operated production not already serviced by current capacity. Approximately $30 million is budgeted in 2008 for new gathering facilities, which are currently under construction.

"Petrohawk's Haynesville Shale investment has created over a decade of drilling opportunities for our company in this awesome natural gas play," said Floyd C. Wilson, Chairman, President and Chief Executive Officer. "Since our first quarter conference call, we have doubled our position in the Haynesville Shale. Our leasing and acquisition efforts are disciplined and strategic as we continue to add acreage in the heart of the play. Our proven ability to optimize costs and provide attractive price realizations are unique advantages we will use to capitalize on this play and grow our company. In fact, our operating costs on a per unit basis actually continue to drop, while many of our competitors have reported cost increases."

"As we stand at mid-year, Petrohawk is reaping the benefit of its initial investment in the Fayetteville Shale and other core properties, and we have embarked on a new, exciting phase of growth. We estimate that proved reserves grew organically by approximately 25% at mid-year, and that figure does not yet take into account any contribution from the Haynesville Shale. For production, we expect our 2008 exit rate will be 50% higher than our 2007 exit rate, and project 2008 average annual production will have grown more than 25% year over year pro forma for acquisitions and divestitures. As our Haynesville program accelerates throughout 2009, we expect to set even more aggressive goals for the Company. Production in 2009 is expected to average 30-40% higher than 2008. During this period of accelerated growth, the Company will continue to value risk management through a low cost structure and hedging, and maintain a capital structure sufficient to realize the value of our significant resource potential."

Haynesville Shale Development Plans and Capital Allocation

Petrohawk is currently running three horizontal rigs in the Haynesville shale and plans to bring three additional rigs to the area by September 2008. By the end of 2008, the Company plans to operate a total of ten rigs, increasing to twenty rigs during 2009 and in subsequent years. These rigs are identified and committed to this program. The Company's development plans take into account the number of wells needed to protect Petrohawk's acreage investment within appropriate timeframes.

The Company expects to drill approximately 29 horizontal wells in the Haynesville Shale during 2008, with the majority of anticipated production contributing to 2009 production estimates. Petrohawk expects that drill-to- connection times in 2008 will average 75 days. After 2008, the Company anticipates that average drill-to-connection time will be reduced to approximately 60 days.

In 2009, Petrohawk plans to drill approximately 140 operated Haynesville Shale wells. Additionally, the Company anticipates a significant non-operated component to its Haynesville development program.

Permalink Reply by Natch N3 on August 18, 2008 at 15:53

I got a call from someone that lives in the goldonna area in Natch Parish and said they heard someone was trying to schedule another informative meeting on the exploration in our area...apparently at some high school? Does anyone have any information on this or any other meetings being held anytime soon?

Thanks
Natch N3

Permalink Reply by Natch N3 on September 5, 2008 at 14:41

Royalty ownership is scam target

By Juanice Gray, News Editor
Published: Thursday, September 4, 2008 5:54 PM CDT
The Haynesville Shale has created a frenzy of leasing activity, visions of financial security and a multitude of web discussions. It has also opened the door for consumer fraud.

Royalty deeds, cleverly disguised as mineral leases, accompanied by bank drafts are appearing in local mailboxes luring landowners to sell a portion or all of their current and future royalties. Based on the Barnett Shale in Texas, royalty payments could last 20-30 years or more equaling losses of thousands, if not hundreds of thousands, in royalty payments.

The lure of money in hand has some signing on the dotted line.

The Times consulted Rodney Harrington, a local attorney knowledgeable in oil and gas leases. Harrington said the lease is legitimate, executable and cautions consumers to contact an attorney concerning any form of lease or deed.

"One of the most disturbing trends of the Haynesville Shale frenzy has been the proliferation of scam artists and questionable tactics used to mislead people into giving up their mineral rights. Lots of folks have been receiving documents in the mail with a check attached. Many of them we've seen are quite misleading, but they all seem to involve one thing: sale of the minerals. That means that if there is production on the property, and if you have sold your minerals, the money from that production will go to the one who bought the minerals," he said.

One such set of documents appeared in the mailbox of a north Natchitoches Parish resident who contacted The Natchitoches Times concerned it was a scam.

The cover letter bore the name of the oil and gas company, touted the hype of the Haynesville Shale and included an offer to "lower the risk of not getting any money in the future." A $9,000 bank draft, self-addressed stamped return envelope and deed documents were included. The letter explained if there is no production from the property within 10 years, the interest would return to the landowner.

What the letter did not say was should there be production, the company would retain, in this case, one-half of the royalties for the duration of production, plus an additional 10 years after production ceases.

The owner of the Lafayette oil and gas company named in the lease obtained by The Natchitoches Times consented to a phone interview. He said his company uses mailings in lieu of door-to-door landmen to reach a larger number of prospective sellers. He emphasized the process and the mineral deed is legitimate, legal and bank drafts are paid upon the return of the signed and notarized documents, the acquisition of the royalties and verification of ownership.

personnel in the domestic collections department at the New Orleans based bank where this draft was drawn verified the draft was valid.

The La. Attorney General's Office warns consumers that the documents may actually be a mineral deed with a general Power of Attorney. Once the document is signed, the Power of Attorney might be used to amend the document, after you sign it, to reflect that all mineral assets, even those already in production, are turned over for very little money.

What appears to be a short-term fix to financial worries could equal massive losses in future royalty income.

If you believe you are a victim in a scam, contact the Attorney General's Consumer Protection Hotline at 1-800-351-4889 or visit www.agbuddycaldwell.com.