Replies to This Discussion

Permalink Reply by Skip Peel - Mineral Consultant on June 18, 2016 at 2:19

You're welcome, Paul.  I could post lots of those well cost docs for other operators and they would be in the same range.  I can show you how to access them if you would like.  Well costs should not include sunk costs such as lease bonus payments, land costs,  DO title due diligence, recordation fees, etc.  And if someone is adding them to AFEs they are padding the estimate.  In my experience CHK didn't pay $30,000 per acre.  The highest Haynesville bonus paid in the play was by Petrohawk and it was slightly over $30,000 ( and a 30% royalty, crazy).  The rumors of bonus payments over $20,000 are hugely inflated from the actual but that's pretty normal in a land rush the likes of the Haynesville Shale Play.  The area of south Caddo Parish/north DeSoto Parish where CHK and HK (read Aubrey and Floyd) went head to head saw quite a few land owners get $10,000 and some more per acre.  And that gets a lot of talk and publicity.  The facts are that a large number of leases were taken prior to the April 2008 announcement of the play and those bonuses were $350 to $500.  I know, I was contacted by some of those landowners.  Yes, the average is likely over $1,000 and a large number owing to the acreage CHK and other major HA players acquired but that is not properly part of well cost calculation.

• ▶ Reply

Permalink Reply by Martin on June 18, 2016 at 13:25

At the very end of the bonus bidding war, the $10,000/acre and 25% royalty extended well into north Sabine parish -- Converse/Pleasant Hill.

• ▶ Reply

Permalink Reply by Skip Peel - Mineral Consultant on June 18, 2016 at 13:31

XTO paid $20,000/acre in north Natchitoches Parish but that was also late in the land rush and, unfortunately, too far south.  SWEPI picked up a lot of Sabine acreage for less than $800/acre.  They got an early start.

I took a trip down memory lane (in the state database) and looked at all the winning bids in the state mineral auction for the 12 months of 2008. The rush was short but entertaining.

• ▶ Reply

• ‹ Previous
• 1
• 2
• 3
• Next ›
• Page