Replies to This Discussion

Permalink Reply by DJG on December 17, 2009 at 19:35

I haven't seen any documentation regarding prior earthquake activity in a particular region co-relating to increased production but there is documented cases in recent history of hurricanes shutting down production!!! LOL.

Permalink Reply by Skip Peel - Mineral Consultant on December 20, 2009 at 4:06

I'll try the link to the LA. State Mineral Auction results one more time. If this one will not work I will post directions to the SONRIS page. I would like members with an interest in this thread subject to review the bids for themselves. And note that the average acre bonus bid is about a third of the high bid of $18,000 which was a unique tract.

http://sonlite.dnr.state.la.us/sundown/cart_prod/cart_min_leas_tract1

Permalink Reply by jffree1 on December 20, 2009 at 7:46

Thanks, Skip. I think what some people fail to realize is that large bonus offers are driven by more than just the presence of gas in the ground. Size of the parcel, competion between E&Ps for that parcel, proximity to good wells... all contribute to increases in bonus offered.
Urban tracts just about always recieve higher bonus than rural tracts do. They (E&Ps) are often trying to lease numerous 1/3, 1/4 and 1/2 acre parcel owners in city subdivisions where, when they offer $20,000.00 per acre, the mineral owner will only recieve his fractional portion of that per acre offer. But the bonus has to be attractive enough to the owners to justify the inconvenience of urban developement.
Out in rural, less populated, areas competition is still key but a large acreage owner is more likely to command a higher bonus than a small acreage owner. Proximity to de-risked acreage is also important. Someone owning minerals in a totally undeveloped (unexplored) region is not going to get the same offers being made two or three miles from a good well. It is unrealistic to believe that they will unless (and until) a well gets drilled that proves the area.

Permalink Reply by Skip Peel - Mineral Consultant on December 20, 2009 at 10:56

Accurate. And well put, jffree1. There are few instances where bonus offers are of public record, that is why the LA. State Mineral Board auctions are such an invaluable indicator of value. Each is a snapshot of factual information for that short time period. There has never been a bonus offer in excess of $30,000/acre that I am aware of and that high water bid was in the late summer of 2008, one time. The results of the LA. State Mineral Board auction is available on-line the second Thursday of each month. A break down of the Dec. bids reveals the following: Of the tracts located within the HS Play and excluding all others, the average of the winning bids by bonus per acre averages $5970.77. The DeSoto Parish bid tract that included the parish road rights-of-way received a bid of $18,537 and is a special case. If that bid is removed from the average, the adjusted total is $4923.58 per acre. There were 13 HS tracts up for bid. Eight received two bids, the remaining five one bid each. Of seven tracts in Sabine Parish that are not in the core area of the Play as it is currently defined, the average bid was $2179.43 per acre. The six tracts in DeSoto and Bienville where there is higher level of development activity averaged $10,975.83 including the $18,537 DeSoto roads bid. Here is my opinion on what the bids revealed: 1) There is a wide disparity in value between the tracts in established areas of the Play and those on the periphery. The level of competition between capable operators has much to do with the value. 2) It is impressive that values for tracts in established areas of the Play are now nearing or breaking the $10,000/acre mark. Reports of offers in the $18,000 to $28,000 acre are likely not recent and should not be considered reliable until evidence is provided to validate them. 3) There is no "going rate". There may be a "blanket offer" rate but it is not accurate as to the value of a specific tract taking into account all possible variables. If mineral owners wish to have an accurate snapshot of the value of their minerals they have to do their homework.

Permalink Reply by jffree1 on December 20, 2009 at 13:36

j, I hope she has a spare... just in case! I have been posting on this site since spring of '08 and I have always tried to give mineral owners accurate information (instead of wild rumors and speculation) so they could make informed decisions. I don't expect, at this late date, that I'll be changing my M.O. and I know Skip won't either.

Permalink Reply by RBH on December 20, 2009 at 18:58

THANKS-SKIP AND JFFREE1..GREAT INPUT AND COMMENTS!

Permalink Reply by DJG on December 29, 2009 at 8:56

Any recent updates to this thread as we get in to the last remaining days of December? This one has been a bit quiet over the past week and 1/2....

Permalink Reply by v on December 29, 2009 at 14:32

Ok bad news on what I started this post with. The offer that I was speaking of to begin the post with was made by a land co. operating out of the Tyler area for a major oil company. I am being vague on purpose. The offer has now been pulled! They claim that the company is out of leasing money till next year. I will update as soon as another offer comes in. But on a brighter note $3000.00 has been offered in Sabine co. for land next to and under the lake, north of 2.

Permalink Reply by jffree1 on December 29, 2009 at 14:37

Was that supposed to be "north of 21"?

Permalink Reply by v on December 29, 2009 at 15:05

yes sorry

Permalink Reply by jffree1 on December 29, 2009 at 15:21

Thanks. That's good news.

Permalink Reply by RBH on December 29, 2009 at 15:33

The $3000/acre in Sabine county..can you share any additional details?

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