Replies to This Discussion

Permalink Reply by Bernell McGehee on November 13, 2013 at 5:02

Sanchez paid $1,251 for a 640 acre 16th section lease in the Thanksgiving Field of Amite County.  It is a five year lease with a 20% royalty.
It was roughly $500,000 more than the next closest bidder.

Permalink Reply by Bernell McGehee on November 13, 2013 at 5:28

Make that $1,251 per acre.

Permalink Reply by Skip Peel - Mineral Consultant on November 13, 2013 at 4:10

Choosing non-consent based on what may happen in the future involves some risk.  The O&G biz is all about recognizing, evaluating and mitigating risk.  Risk tolerance is an individual decision.  I find the vast majority of land/mineral owners to be overly optimistic.   And the old hands in the biz overly pessimistic.  I think I know how they got to be that way.  Experience.

Permalink Reply by Skip Peel - Mineral Consultant on November 13, 2013 at 4:19

mark, if you are looking for lease bonus information that is not a rumor you probably will find it in only one place.  State mineral auctions where state lands or those of public governmental bodies (municipalities, school boards, levee boards, etc.) receive bids post that information in the public record.  In LA that bid data is in the state database and includes bonus per acre and royalty.  Rumors don't tend to work well in lease negotiations.  Bids in the public record are much better for leverage in negotiations.

Permalink Reply by mark edward marchiafava on November 13, 2013 at 4:22

I come from a totally different area than the oilfield, but I just cannot fathom how so many people cannot know of this lease, which I suspect is real.
On top of that, I find it strange I seem to be the ONLY one who asks the questions which seem to have no answers.

Permalink Reply by Skip Peel - Mineral Consultant on November 13, 2013 at 4:39

mark, you "seem" to be the only one who doesn't get answers only because you are not participating in numerous threads across GHS.  If you were you would note many unanswered questions.  That's not surprising, it is par for the course.  The school board is probably not inclined to divulge the details of their lease under any circumstances but may also be constrained by a confidentiality agreement.

When an O&G lease is filed in the public record (county clerk's records) it is viewable by anyone who may care to examine it.  However most leases these days are not recorded in the public record.  In their place a lessee will record a Memorandum of Lease that includes the bare bones information required by law.  Neither a memo or a lease will include the bonus paid for the mineral rights.  The only source that I know of for lease bonuses in the public record is the state mineral auction.

Permalink Reply by mark edward marchiafava on November 13, 2013 at 4:45

I stopped working, set my day aside, called the Amite school board office, the ONLY person who apparently knows anything about anything was not available, was given the now-disgusting option of going to voicemail, which I declined with great certainty.
AFTER that, my day still on hold, I called the supposed attorney for the school board, Nathanial Armistad in Brookhaven. He was professional enough to send me an email, I listed my few simple questions, now waiting for his response, which I will share. THIS is how you learn

Permalink Reply by Bernell McGehee on November 13, 2013 at 17:44

The lease was reported in the normal process of covering school board actions a few weeks ago.

It has since been reported in an article in the McComb Enterprise-Journal and Woodville Republican with the details I shared above.

It has been shared on the Tuscaloosa Marine Shale facebook page.

Apparently, other than me, no one following this particular thread knew about it, but I assure you a LOT of people know about it...or at least have had the information shared with them.

I responded in less than an hour after you posted the question on here.

On a message board, that's a pretty fast response.

I'm sorry you had so much difficulty finding the answer to your question.

Permalink Reply by mark edward marchiafava on November 14, 2013 at 1:00

Since I don't attend school board meetings,don't have a subscription to either paper, have better sense than to get involved with Facebook, this particular lease escaped my attention.
Can you confirm the $$$ amount was $1,200 per acre? Thanks.

Permalink Reply by Bernell McGehee on November 14, 2013 at 5:32

Mark,

The amount was $1,251 per acre.  I provided more details beneath your original question approximately 45 minutes after you posed the question.

I suppose my point about the other sources of information was that there are others attempting to keep folks informed about the TMS that you may want to consider if you wish to keep up with the happenings.

Message boards such as this one...and it is the best I've found...are great for discussion over time and provides more in depth information than anything a reporting agency can do.  That said, it isn't necessarily dedicated to keeping up, at least not in one centralized thread, with everything that is going on.

The Facebook Page I mentioned, while not for you, provides updates as they become known.  The newspaper articles I mentioned come out once each week.

For those of us interested (obsessed, perhaps in my case) with keeping up with the TMS, every source of info is of interest.

Permalink Reply by George Christopher Henson on November 13, 2013 at 13:17

This is exactly what I've seen the majors do offshore. I've thought for years that costs of flow lines, on pad storage tanks, salt water disposal, all of the different operational production costs, could be cut by multi-well pads on land, the same way its done offshore, and inland bays. They can say what they want about Encana, but this is another example of the exceptional size unit, and Encana's 'thinking outside the box'. As a conservative thinking fellow, I hope they make billions, and take the small mineral owner, who generally sells their labor for a living, into a much better future. Kudos to the first to make an exceptional size unit, multi-well pads, and bring America closer to being energy independent.

Permalink Reply by Steve on November 13, 2013 at 14:56

We are all for making play development work as cheaply as possible, as long as landowners don't forfeit a lot of oil in the process. If these 2200 acre units are part of a more-oil-at-less cost program, then they may have merit. Unfortunately, at this stage of the game at least, the 2200 acre unit is not justified as far as I can see, as long as they keep drilling laterals that could've fit in a 900 or less acre unit. I for one would like to see them perfect the drilling and completion  of more +8000 ft. laterals before they apply for 2200 acre units. Their is only 1 well with a lateral that long so far. There have been a  lot of wells on the other hand where even less ambitious laterals have been cut way short due to drilling and/or completion problems. The MSOG Board is the only protection a landowner has, so I hope they won't jump the gun by allowing operators to "experiment" in 2200 acre units. That could be unfair to landowners. IMO

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