Replies to This Discussion

Permalink Reply by Bill R on July 27, 2022 at 10:42

Interesting - I have gotten some almost incredible offers on two of our Producing units, Chinaberry and Phelps. I have also gotten several offers for our Family Holdings both above and below you, so far all of these offers have been to purchase. Your having new Leases in that area are very promising to us. Looking forward to something breaking loose around there! 

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Permalink Reply by bel on July 27, 2022 at 12:31

They told me they were to the left of me drilling and that they were moving to mine next.  Don’t know if he was fluffing or not.  What kind of offers were they making to sell minerals?  

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Permalink Reply by Skip Peel - Mineral Consultant on July 27, 2022 at 13:15

$1500/acre and a quarter royalty, at this point in the play, are good lease terms  Congratulations.  For those considering a lease, there are other practical terms to consider beyond the bonus per acre and the royalty.  Do your homework.

I would be a significant help to know who is doing the leasing.  And is the lessee is a land company, who is their client?

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Permalink Reply by bel on July 27, 2022 at 14:30

It says ETX Land Acquisitions on behalf of Pine Wave Energy Partners.  You know I’m advised not to do a two year option, but wondering even if they are offering $1500/NMA?  Guess I’m not understanding that completely.

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Permalink Reply by Skip Peel - Mineral Consultant on July 27, 2022 at 14:37

FYI, the two year extension option should come with a price per acre to extend should the lessee chose to exercise the extension.  That price is as negotiable as the upfront bonus per acre.  If the primary term of the lease is no longer than three years, a two year extension option would be a fairly standard lease term.  Pine Wave sold its Haynesville holdings in Caddo Parish and Harrison and Panola to counties Silver Hill so it is unclear at this time if they are planning development or simply investing in leasehold with the intention to flip it.  You might want to ask ETX Land Acquisitions.

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Permalink Reply by Mike on July 31, 2022 at 4:53

Pine wave has recently permitted two wells in northeast Sabine County.  They have another in San Augustine.  

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Permalink Reply by Bill R on July 27, 2022 at 13:26

Yeah Baby... DRILL

We have Phelps A223, JH Rodgers A236, W Clark A83 and SW Blount A415 above and West. Then SPRR A564, SPRR A566 and O Hendrix A127 below and West. And then to the East we have S Stedham A252, JH Kirby A586, JV Massey A397, J Hanks A386 and NG Roberts A38.  Cannot wait until they develop all of these areas and start producing!

Figure that is why all of the interest in buying my interest in Chinaberry and Phelps Wells

  

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Permalink Reply by Bill R on July 30, 2022 at 5:27

Wyotex Oil and Boss Hogg are the current companies showing the most interest in ours, there is another, but he is a Landman representing a 'undisclosed' interest... the last time he contacted us, he was representing BPX. 

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Permalink Reply by Mike on July 31, 2022 at 5:12

Thanks for posting your offer. As an unleashed mineral owner this helps.   Seems like in this era of multi-laterals, more de-risk areas, gas prices of over $8 at this posting, 2 formations or more to drain, and good access to LNG ports, the lease bonus could be much more.   I’m wanting to finally pay cash for a new pickup. 

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Permalink Reply by Skip Peel - Mineral Consultant on July 31, 2022 at 6:19

$1500/acre is pretty much top of market as far as bonus offers go currently play wide.  I'm fine with that as long as lease offers include a quarter royalty.  If your area is indeed "de-risked", the royalty will be significant long term revenue long after the bonus is gone.  I suggest those considering a lease get some expert assistance to determine if they have some negotiating leverage and to draft a protective and beneficial Exhibit A to the lease.  It's just good to see new leasing occurring and the play fairway expanding or getting infill interest.  Yes, $8 gas will do that but $8 gas will not last.  LNG demand should however maintain prices considerably higher than what we've see the last few years.  I would gladly take the 2014 average for the next several years.

Month	2014	2015	2016	2017	2018	2019	2020	2021	2022
Jan	4.407	3.189	2.327	3.930	2.738	3.642	2.158	2.467	4.024
Feb	5.557	2.866	2.189	3.391	3.631	2.950	1.877	2.760	6.265
Mar	4.855	2.894	1.711	2.627	2.639	2.855	1.821	2.854	4.568
Apr	4.584	2.590	1.903	3.175	2.691	2.713	1.634	2.586	5.336
May	4.795	2.517	1.995	3.142	2.821	2.566	1.794	2.925	7.267
Jun	4.619	2.815	1.963	3.236	2.875	2.633	1.722	2.984	8.908
Jul	4.400	2.773	2.917	3.067	2.996	2.291	1.495	3.617	6.551
Aug	3.808	2.886	2.672	2.969	2.822	2.141	1.854	4.044	8.687
Sep	3.957	2.638	2.853	2.961	2.895	2.251	2.579	4.370	-
Oct	3.984	2.563	2.952	2.974	3.021	2.428	2.101	5.841	-
Nov	3.728	2.033	2.764	2.752	3.185	2.597	2.996	6.202	-
Dec	4.282	2.206	3.232	3.074	4.715	2.470	2.896	5.447	-
AVG	4.415	2.664	2.456	3.108	3.086	2.628	2.077	3.841	6.451

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Permalink Reply by Mike on July 31, 2022 at 10:21

Thanks Skip.  That’s going to help.  

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Permalink Reply by Skip Peel - Mineral Consultant on July 31, 2022 at 10:50

You're welcome.  Good luck.

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