Replies to This Discussion

Permalink Reply by Rock Man on June 14, 2018 at 3:05

Thanks for posting these results.

Points to some near term drilling activity???

Permalink Reply by Skip Peel - Mineral Consultant on June 14, 2018 at 3:09

You're welcome, RM.  Operators tend to take state leases last prior to kicking off their drilling program.  There is a lot of acreage to be tested across central LA so there is no compelling reason to get into a land rush at this point.  I suspect that the tracts receiving successful bids will fill in where private leases do not cover lands about to see the bit.

Permalink Reply by Rock Man on June 14, 2018 at 3:11

Assume Banff Energy is brokerage firm working for major operator?

Permalink Reply by Skip Peel - Mineral Consultant on June 14, 2018 at 3:17

Yes.  That's the way bidding usually works.  The fact that COP has placed some bids is somewhat unusual.  A number of companies specialize in the state bid process.  There experience is valuable.  At some point in the future the bidder will file in the public record a conveyance to their client.  That's usually far enough after the fact that any of us paying close attention have already figured out the identity of the client.

Permalink Reply by David Crockett on June 14, 2018 at 4:24

Anyone know anything about  banff energy?

Permalink Reply by Skip Peel - Mineral Consultant on June 14, 2018 at 5:34

David, as I mention above it is usual for firms that specialize in the mineral auction to bid on behalf of clients.  So there is nothing of value to us associated with Banff Energy.  As with many land companies, they use a name that sounds like they might be something other than what they are.  It is easy to search for Banff Energy as an "operating company" registered with the state.  They aren't.  That means they have never drilled a well.  You can go to the SOS website and get some basic information but it's of little value.  Firms like Banff work for multiple clients and perform a number of services but they do not drill wells.

BANFF ENERGY, L.L.C.

Limited Liability Company

LAFAYETTE

Active

Previous Names

Business:	BANFF ENERGY, L.L.C.
Charter Number:	41040933K
Registration Date:	1/4/2013

Domicile Address
	113 ST. JAMES DRIVE
	LAFAYETTE, LA 70506

Mailing Address
	113 ST. JAMES DRIVE
	LAFAYETTE, LA 70506

Status
Status:	Active
Annual Report Status:	In Good Standing
File Date:	1/4/2013
Last Report Filed:	12/15/2017
Type:	Limited Liability Company

Registered Agent(s)

Agent: CRAIG A. RYAN Address 1: 1200 CAMELLIA BLVD., STE 300 City, State, Zip: LAFAYETTE, LA 70508 Appointment Date: 5/12/2016

Officer(s)

Additional Officers: No

Officer: JULIE H. INZERELLA Title: Manager Address 1: 113 ST. JAMES DRIVE City, State, Zip: LAFAYETTE, LA 70506

Permalink Reply by David Crockett on June 14, 2018 at 7:19

Thank you Skip

Permalink Reply by Skip Peel - Mineral Consultant on June 14, 2018 at 7:28

You're welcome, David.  Banff, like most of the companies that place bids in the monthly mineral auctions, are middlemen.

Permalink Reply by John M Santamaria on June 20, 2018 at 4:45

Just out of being curious, some of these small tracts are in the middle of what I thought were all privately owned properties in our area. How does the state generally acquire  these tracts? Non payment of property taxes and so forth?  Once again Thanks Skip for the valuable info.

Permalink Reply by Skip Peel - Mineral Consultant on June 20, 2018 at 4:52

The state by law is required to hold in perpetuity any acquired mineral rights through whatever means.  So besides the "beds and bottoms" of all water bodies navigable at the time of statehood, all mineral rights that may be acquired at a later date become state property and may not be divested.  Keep in mind that the state Mineral Board auctions include all public lands.  So mineral rights owned by a municipality, a levee board, a school board, a volunteer fire department, etc. are regularly part of the onshore tracts appearing in the monthly auctions.

Permalink Reply by John M Santamaria on June 20, 2018 at 5:02

Got it.  Could this be a signal of any sort of immediate action on top of all this positive news?  Because of the pipeline limits being reached in the Permian I guess they will re-intensify their focus on our area.  Have they figured out the better procedure to deal with the differences between Karnes county and our parishes chalk formation?  Thanks

Permalink Reply by Skip Peel - Mineral Consultant on June 20, 2018 at 5:11

State leases more often than not signal that development activity is about to commence.  Companies accumulate the private leases for an area of interest and then fill in with state leases which must be drilled within a year, forfeited  or an additional lease bonus paid for the second year.  I think we will see multiple well permits in the coming weeks.

As far as I can tell, no, the operating companies are just beginning to get the science and drilling results they need to try and crack the code on the central LA AC.  There will be a learning curve and there will be areas that are economic and areas that are not.  This is not a shale play.  Rock quality and the amount of recoverable hydrocarbons will vary across the area now seeing interest.  It's like a lottery - some will win and some will lose.  It may well take two or three dozen wells and another year to know whether the play is economic.

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