O.K. Newbie here so cut me some slack if I screw this up. I just noticed there's no discussion group for my parish and communication among our residents is sketchy and patchy at best because we are VERY new to the oil play, so we don't have any collective wisdom here. Any comments, insights, or even heresay welcome here. What I have to contribute is just information on lease rates and the areas they are concentrating in right now. (Averaging $150 for first three, varying for next two. From 1/6 to 1/5 royalties.) Devon is about a month into drilling it's first Tangipahoa well just a little north of me in Fluker, Louisiana. I have friends who are part of the unit but they are not hearing much of anything. Security at the site is TIGHT with our local sheriff's office maintaining 24 hour presence a couple of hundred yards from the rig itself. They ask you your business and write it all down. I think it's called a "tight hole" or something like that. They are also going to be buying all the pond water nearby. I don't know how much they are paying but will ask around.I have heard that our state is limiting the drilling of wells for water but I'm not sure of that. It was just hearsay from a friend. Well that's it for now.This is a great site. I've learned tons here. Amelia Resources has been a great help as well. Keep up the good work people.

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Betty, depends on the other lease language.  The bonus and royalty are in the range that many others have signed for in north Tangi.  Without knowing your exact location (are you in or near a unit?) or the size of your mineral tract, it's difficult to give any specific advise.  Everyone needs a depth clause and most lessees will grant a horizontal Pugh clause.  How you use the surface will determine if you need a "no surface use" clause.  For many it's just best to get a copy of the actual lease you would be asked to sign and pay to have an O&G attorney review it.

I am in the first Little Silver Creek Unit. I do not have the lease yet, but I will try to get an O & G attorney. I live in Georgia. There was no mention of a bonus. It is for 3 years. What is a "no surface use" clause? Thanks for your time and effort concerning this matter. I really appreciate this information.

No Surface Use is self explanatory.  It is used to protect your surface use by prohibiting drilling and production related uses and/or to ensure fair market compensation should an operator wish to use the surface and is willing to provide acceptable compensation.  If you live on the land you wouldn't wish to have a lease road running by your house.  If you are growing timber you would want to be compensated for any cut down to make way for roads, rights of way, well pads, etc.  A No Surface Use clause leaves you in control of what you allow and where it will be located.  Some land owners get the use of roads and/or ponds built by the energy company for their purposes.  If you do not live on the land, the acreage is small and there is no use providing income for you, a no surface use clause probably is not important.  There are a lot more clauses to consider and that's where a good, experienced O&G attorney comes in.  If I were you, I'd wait to see the Devon units recently approved for the Little Silver Creek Field.  They should be online in the next two weeks.

Look for Devon to "redraw" its units in Tangipahoa Parish, expanding their size so as to permit longer laterals.  Devon has done this in St. Helena Parish.  We may also see Devon alter the orientation of their units to run true north and south so as to be consistent with Encana's units. 

I hear that Devon has already made those changes in their Little Silver Creek unit application which was amended just prior to the hearing date.  The Field Order as amended may be in the database now.  I'm out of town and will look for it when I return.  Or others can look it up under Docket 12-287 or Little Silver Creek, Field Code 6106.

Encana's earning call. "No real comment on operational wells."  Phooey. But the last thing one of them said was that they are driving the Tuscaloosa towards commercialization. They want a partner to shoulder 30 to 50% of the load and think that they will have enough left over for themselves. My opinion, overall, encouraging for Mississippi and hopefully, Louisiana as well. The Anderson wells must be holding up pretty well. Otherwise, the words "disappointing, guarded, or reluctant", would have popped out, and I didn't hear them.

Apparently you watched the Encana presentation yesterday.  I'm wondering why Encana would need partners to help them, when they seem to be the heavy hitters in Mississippi?  Aren't their wells doing way better than Devon's? Hmmm, I'm stumped on this one.  Does Encana have any interest in Tangipahoa Parish at this time?  I love when others do well, but I'd love to see our parish HIT some of these minerals~And I hear, maybe from Skip, that Encana has somewhat better luck with their program.  Come on down Encana!!

EnCana, and many other mid majors focused on unconventional reservoirs, has employed an aggressive leasing approach to tie up large acreage positions in numerous prospective plays.  With profits from natural gas production depressed it makes sense to bring in partners that can pay a significant share of the development costs.  The leases are not good indefinitely and drilling carries help maintain development schedules.  Emerging plays take years to reach a point of significant income.  The TMS currently requires a lot more capital commitment than it generates profits.  It will likely take a couple of years for the TMS to be a meaningful profit generator for EnCana.

To expand on Skip's point, 1,000 well locations equal over 10 BILLION in drilling cost.  Encana's acreage will support over 1,000 wells and depending on downspacing maybe multipliers of this number.  In the Eagle Ford oil window they are talking about 40 acre well spacing with 5,000ft laterals.  While this is good for the mineral owner, it means the operators will use more capital to drain the acreage.

  I think Skip answered your question about the partnerships. As to Encana's interest in Tangipahoa parish, I think they are probably constrained by the fact that Devon has leased up most of the large, and by now, medium size tracts of land from the middle of the parish north. Devon's land men are still roaming around the area picking up small pieces next to the large pieces they already have, presumably in order to form production units. Having said all of that though, there are rumors that Devon and Encana are sharing information, and hopefully Devon will start producing successful wells in Tangipahoa parish soon. I share your enthusiasm on that point. 

 

 

TangiHopeful is correct.  The last wave of leasing in Tangipahoa Parish began approximately 5 years ago.  Encore was leasing in Mississippi and northern St. Helena Parish and Encore drilled a well in the northwestern corner of St. Helena Parish.  A second company named "Cypress" began to aggressively lease any and all property in northern Tangipahoa and St. Helena Parishes (the first 3 townships).  In effect, Cypress gained a substantial foothold in both parishes before Encore could finish its work elsewhere.  Ultimately, Encana obtained Encore's interest and Devon obtained Cypress' interest.  So, it was merely timing rather than a lack of interest that has resulted in Encana not having a substantial interest in Tangiphaoa Parish.  Many of Cypress' initial leases (now Devon's) are reaching the end of their initial terms.  So, it will be interesting to see what Devon does after completing the Thomas well in Kentwood. 

It's been pretty quiet on this blog for a couple of wks.  Does anyone have any good or moderate news for my hungry ears?  I'm not hearing anything from the courthouse or landmen, nor any neighbors or mineral lessees.  I did read a good post sent to me by an attorney about the Eagle Ford Shale and it's production.  Texas doesn't have much rain but it's surely got the oil and gas hands down.  Hoping to hear something good about the Tuscaloosa Marine soon or anything about Tangipahoa Parish would soothe my hunger pains.  I did see that the derrick was still standing approx. a wk. ago in Kentwood north of town on Hwy 51.  I think they're fracking that one, and it must take much longer than a vertical, because the well near Fluker was completed much more quickly and derrick was down in no time at all.

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