Replies to This Discussion

Permalink Reply by duster1953 N3 on July 9, 2008 at 4:54

Does anyone know anything about leasing in the Campti area?

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Permalink Reply by Johnson on July 9, 2008 at 5:08

Can you explain this a little more to me? What does this price mean ? Who's buyin' for 30K in Caddo?

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Permalink Reply by insomniacnla on July 9, 2008 at 5:31

The landmen will tell you a different story but this is my take on what the State Mineral Lease sale means to me. Last month, June, 2008, was a record setting month for the bids for the state leases. That month, the total bids added up to more than the last 24 months combined and most of it were bids for North Louisiana leases. Caddo Parish had the smallest land parcel of 19 acres and the lease was for a little more than $17,000 per acre. After that was announced, the private landowner lease bonus offers went up and exceeded the $17,000. I think that the same thing will happen now, we may not get to $30,000 per acre but I believe that the state lease bids give us some idea of what the oil/gas companies may value the leases at. I feel much more comfortable now with asking $20,000 for my 20 acres.

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Permalink Reply by Scott on July 9, 2008 at 5:40

Insomniacnla,

How reliable is your source. Thanks in advance.

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Permalink Reply by insomniacnla on July 9, 2008 at 5:43

Scott,

My source is 100% reliable. I went to the Louisiana state website that posts the results.

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Permalink Reply by Scott on July 9, 2008 at 5:53

Could you post a link to that website? I would sure appreciate it.

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Permalink Reply by insomniacnla on July 9, 2008 at 5:58

Okay, see if this works "http://sonris-www.dnr.state.la.us/www_root/sonris_portal_1.htm"> Go to the right side of the page under the heading "Minerals", then click on "Lease Sale and Tract History".

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Permalink Reply by Kassi on July 9, 2008 at 14:17

go to the SONRIS site and look up the state mineral lease sale for July 08. It is all there in black and white from the state themselves. If memory serves me the lowest lease was $23,000.00 per acre and the highest was $30,200.00 per acre.

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Permalink Reply by Ouachita Lawyer on July 9, 2008 at 6:00

There is a significant difference in State Mineral Board leases versus private landowner leases. Private landowner leases are generally "paid-up" leases which means that the "lease bonus" is all the owner gets for the primary term of the lease other than payments related to production, royalties, shut-in royalties, etc.

State Mineral Board leases on the other hand are annual rental leases. Bidders bid a cash payment bonus which is the lease bonus and first year's rental. If bidders bid a lease with a primary term of more than one year, then they are required to bid an annual delay rental of at least 1/2 of the cash payment bonus. So, a $30,000/acre cash payment bonus on a state mineral lease does not equal a $30,000/acre bonus to a private landowner. In fact, it probably is a better deal -- assuming that a well is not drilled in the first year.

The State put this requirement in to force the companies to drill on state land as quickly as possible.

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Permalink Reply by insomniacnla on July 9, 2008 at 6:03

Thank you for helping explain what the rental payments are. I know that the state gets a better deal with their process but I also believe that it will "raise the bar" on the bonus offer levels to the private landowners.

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Permalink Reply by Mit on July 9, 2008 at 6:20

I think 'insomniacnla' is making the point that private lease bonus amounts made a jump soon after the state released their bonus amounts in June. Today's data shows another jump. He is assuming that private land leases will soon see another spike in prices.

Yes, major differences do exist between the state bidding process and bonuses negotiated with private landowners. However, I also think a correlation exists between the two. I expect to see private landowners to start receiving offers closer to $20,000+ on a wider basis.

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Permalink Reply by SharonB T18N R15W S8 on July 9, 2008 at 6:11

Ditto - Thanks for the info.

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