Replies to This Discussion

Permalink Reply by Skip Peel - Mineral Consultant 7 hours ago

When alternate unit wells are approved that constitutes a "spacing order".  Once spacing is approved, a well permit to drill is the next step.  There is no notice required for that step so you'd have to check SONRIS to know if a well permit has been issued. 

Your list of sections is a little confusing as there are no alternate wells approved for sections 2, 4 or 11 at this time.  Are the sections in 10 North - 9 West?  The R 10 W and R 9 West are what is confusing.  You may have received a notice letter that the application is pending but there is no application in the database at this time.  If you have received a notice letter, it must be in the period when Interested Parties can request a local hearing.  That rarely happens and is a waster of time anyway.

Permalink Reply by Natchitochesman 1 hour ago

Thanks ! Appreciate your information as always .... I received a notice letter about one week ago. Sections are in R10W, R9W.  Is $3k / net royalty acre for mineral buyout too low for this area ?  I have been told around  $5K to 7.5K / net royalty acre.  Below Lake End, LA at I-49.

Permalink Reply by Skip Peel - Mineral Consultant 1 hour ago

Interesting that the offer is made in Net Royalty Acres.  That's unusual.  Mineral companies make offers in Net Mineral Acres.  The $3k certainly sounds low and the $5k to 7.5K may be more fair market but it depends.  First upon your royalty fraction and second upon how many of the wells get permitted.  It is common for operators to apply for a group of wells, maybe four to twelve.  Once the spacing order is approved the operator can permit one or two or four.  Much of that decision is associated with takeaway capacity.  Pipelines can only accommodate so much new production volume.  I am quite familiar with that area but would have to do some digging to have some idea of the existing takeaway capacity.  If you are interested in a sale, several other questions are appropriate to consider.  Your total number of mineral acres, the tax implications of a sale and the number of future wells that your unit could accommodate.  Since spacing approval comes with no time requirement to drill, I would advise doing nothing until such time as there are well permits to drill issued.  I'll make a note in my tracking spreadsheet and let you know when that happens unless you can do that for yourself on SONRIS.

Sections 2 and 11 together make sense since they are adjacent north to south.  Section 4 is a mile away.  I'll know more when the application is available in the database.

Permalink Reply by Natchitochesman 1 hour ago

I checked the offer letter again just to make sure and it clearly has "Purchase Price / Net Royalty Acres" which I think is strange too.  Thanks for the information.  

Permalink Reply by Skip Peel - Mineral Consultant 58 minutes ago

Then either your full lease including royalty fraction was recorded in the public record where a prospective buyer could access it or you have co-owners who have shared their lease royalty with the prospective buyer.  Depending on the clauses in your lease, there could be other terms that would affect the value of the underlying mineral rights.  My advice is to wait.  The offers should increase as wells are permitted and then spud.

Permalink Reply by Natchitochesman 52 minutes ago

THANK YOU as always.   

Permalink Reply by Skip Peel - Mineral Consultant 45 minutes ago

You're welcome.  It's good to see Natchitoches Parish get some Haynesville Shale attention.  I've worked with mineral owners in this specific area on mineral sales previously.  Thanks for posting this discussion on the Natchitoches Parish Group page.  I'm hoping that the members of that group are paying attention as I expect more and wider Haynesville interest in the near future.

Spread the word.  We could use more input and on the ground intel.  It could help mineral owners.