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Permalink Reply by Jack Blake on July 2, 2010 at 17:31

Don't do it cried Jack Blake!!!! Some of the experts please help ellymae!!!!! PLEASE!!!!!!!!!!!!!1
jACK bLAKE DOES NOT WANT TO SEE ANY LANDOWNER GET GIGGED!!!!!!!!!!!!1

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Permalink Reply by Checkmateking on July 2, 2010 at 23:29

Don't sell them.

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Permalink Reply by sesport on July 3, 2010 at 0:25

There was a thread around here somewhere that discussed this issue. huh??? 80)

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Permalink Reply by jffree1 on July 3, 2010 at 2:05

Ellymae you should join the Sabine County group.

http://www.gohaynesvilleshale.com/group/sabinecounty

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Permalink Reply by jffree1 on July 3, 2010 at 2:33

NEED SOME INFO BEFORE WEDNESDAY IF POSSIBLE

If you are being pressured to make up your mind quickly, I advise waiting. I think any offer you would get for minerals in Sabine today would be steeply discounted because we have no proven production from the shale yet.

If you can hold off (don't desperately need the money)... I think you could get a better price 4-6 months down the road. Chesapeake is drilling their first horizontal well in the shale and we should have some results by Christmas, if not sooner.

Your reasons for selling are personal. You don't need to explain what they are or justify them to anyone. But, you won't get a fair price for the minerals right now, I don't believe.

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Permalink Reply by Henry on July 3, 2010 at 5:50

I completely agree with jffree. I'll only add that if you are being pressured to do something by Wednesday, you will not have time to get adequate legal advice. If you do elect to sell, please make sure you understand what you are selling -- mineral rights or royalties, the whole amount or a fraction.... get a good lawyer to help you, if you do this.

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Permalink Reply by Checkmateking on July 3, 2010 at 6:55

There are some excellent horizontal Haynesville completions in Sabine Parish, the Labokay well in Pleasant Hill IPed at almost 16 million, the Hallie Litton at over 17 million, Shell really likes what they have in the area.

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Permalink Reply by jffree1 on July 3, 2010 at 7:51

I think if anyone in Sabine County had an inkling what is happening just on the other side of the lake (Sabine Parish) they wouldn't even entertain offers to buy, right now... not without seeing well results over here, at least.

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Permalink Reply by DJG on July 3, 2010 at 8:08

Ellymae,

In the attached file is a royalty calculator worksheet that I put together that also tries to take into consideration the very high decline rate of these Haynesville Bossier wells.

Plugging in some pretty conservative numbers of:

a) IP rate of 12 mmcfd
b) NG price of $5.00
c) Royalty of 20%
d) 640 acre unit

For each acre of minerals owned you could be looking at around $6-$10K per EACH well in your unit.

Considering that your area could be productive for multple formations (Haynesville, Bossier, Cotton Valley, James Lime, and some historical and recent shallower oil plays) and that each formation could take as many as 5 - 8 wells to fully drain the formation, it is not inconcievable that over the long-term production life of your minerals that your unit could see anywhere from 10 to 30 wells or even more.

That said, the long-term productivity of these minerals has the POTENTIAL to value anywhere from $50K - $300k PER ACRE.

Now the downside of that equation is that it will likely take 20-40 years or more for all of those wells to be drilled.

Even so, if you look at the math, it really will equate that any offers to buy your minerals today will only be at pennies - or even fractions of a penny - on the dollar to the true long-term value of the resource that you own.

That said, think long and hard before you considering selling any minerals and definately listen to Jffree and Henry above that any pressure to make a decision to sell by Wednesday is a BIG red flag that you just might be dealing with someone who is less than reputable in their intentions.

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Permalink Reply by DJG on July 3, 2010 at 8:15

Here's the royalty calculator spreadsheet in the attached file.

Attachments:

• RevisedHSBORoyaltyEstimator - Feb 5 2010.xls, 4 MB

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Permalink Reply by sesport on July 3, 2010 at 13:45

Gee, I don't see any reason to add to this. Don't see any mineral owners yelling, "GO FOR IT," either.

80)

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