Replies to This Discussion

Permalink Reply by Doug Cox on March 28, 2018 at 5:56

Skip, do you see any new permits for Cheneyville area, I heard there are some in works?

Permalink Reply by Skip Peel - Mineral Consultant on March 28, 2018 at 6:05

Doug, you (and all the members following the AC) should learn to check permits for yourself.  It is quite simple.  Use the link below.  Enter the dates you wish to review and search.  Each permit will have links in blue that will tell you the field and the operator in addition to the printed data.  Give it a try and let me know if you need any help.

http://sonlite.dnr.state.la.us/sundown/cart_prod/cart_con_allpmtwels1

Permalink Reply by Joe Aldridge on March 28, 2018 at 8:07

Skip, I've lost my link to the weekly scout reports. I can't seem to find it on any of DNR's menus. Any help would be appreciated. 

Permalink Reply by Skip Peel - Mineral Consultant on March 28, 2018 at 10:15

Look under Well Information.

http://sonris.com/dataaccess.asp

Permalink Reply by Joe Aldridge on March 28, 2018 at 11:12

Thanks Skip, I finally found the right link to click on. Thanks again.

Permalink Reply by Skip Peel - Mineral Consultant on March 28, 2018 at 11:16

You're welcome, Joe.

Permalink Reply by littleasy on March 28, 2018 at 8:42

At $40 bbl, does drilling in the Gulf and onshore plays like the LA Austin Chalk make economic sense?  Recent articles suggest it does given improvements in technology.  Given a 5-6 year window can the large leasehold in Central LA be adequately assessed and produced?

Oil sinks 1.3%, settling at $64.38, as US crude stockpiles rise and geopolitical risk fades https://www.cnbc.com/2018/03/28/oil-is-breaking-down-as-us-crude-st...

Permalink Reply by Joe Aldridge on March 28, 2018 at 14:27

 Louisiana Light Sweet (LLS) is at $67.56. That is what AC oil should be classified as. It usually runs 1 to 5 dollars ahead of WTI.

Permalink Reply by Rock Man on March 28, 2018 at 14:39

LLS gets some good prices, but keep in mind that a deeper, higher pressure and more thermally mature play like what the Louisiana AC will be will have a large portion of its cash flow tied to natural gas and NGL's.

And any quoted commodity prices are "pre fees" - transportation, processing, marketing, etc.. All of which negatively impact the bottom line of the operator.

e.g. the $67.71 per bbl of LLS may only net "$50 to $55 for the operator.

And if mineral owners don't have the proper clauses in their leases to prevent such fees from being deducted, royalty checks will be negatively impacted too.

Permalink Reply by Bob Zimmerman on March 28, 2018 at 17:01

<if mineral owners don't have the proper clauses in their leases to prevent such fees from being deducted, royalty checks will be negatively impacted>>>

How is a lease best worded to exclude post-production costs from being deducted from royalty?

I have been studying that, and it's a real humdinger. One little flaw and you're out of the game. 

This Louisiana court action is informative:https://scholar.google.com/scholar?scidkt=8456257913326940109&a...

Permalink Reply by Rock Man on March 28, 2018 at 19:02

It is for reasons like this that one needs to use a GOOD O&G lawyer. I cannot recommend one for Louisiana (or anywhere else) - the one I used in Texas years ago passed a few years ago.

Permalink Reply by Skip Peel - Mineral Consultant on March 29, 2018 at 0:29

That's why you need an experienced O&G attorney/firm.

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