Replies to This Discussion

Permalink Reply by Joe B. Lovelace on February 8, 2022 at 1:46

Thank you Skip for posting my inquiry.  The brine lease offer is made by Cass County Brine, LLC and covers approximately 1,000 net mineral acres on the East side of Cass County near Kildare.  I suspect extraction wells may be drilled to recover brine from the Smackover and wastewater previously injected as a byproduct of O&G drilling.  Cass County does not have the existing infrastructure to extract and refine brine as South Arkansas.  The most marketable product now from refining brine is Lithium.  Standard Lithium has a plant near El Dorado piloting this process.  A similar plant would need to be constructed to refine the brine recovered here. I am exploring new territory negotiating the brine lease terms, i.e. Bonus, Royalty & duration of lease.  Any help would be appreciated.  Joe Lovelace

Permalink Reply by Skip Peel - Mineral Consultant on February 8, 2022 at 2:15

Your welcome, Joe.  Cass County Brine LLC does not appear to be registered in Texas with the Texas Comptroller of Public Accounts under that name so proceed with caution.  Here is a link to the Union County AR Group where there are previous discussions regarding leases for brine.

https://gohaynesvilleshale.com/group/union-county-arkansas-shale

Permalink Reply by Skip Peel - Mineral Consultant on February 8, 2022 at 4:50

Here is a link to a brine lease discussion in the Columbia County AR Group.

https://gohaynesvilleshale.com/group/columbia-county-arkansas/forum...

Permalink Reply by John Tanner on August 30, 2023 at 5:35

New to the group and I've read through y'all's posts bc my brother and I have been offered a straight brine lease for our minerals in Cass county, not the hybrid oil and gas form someone posted by San Luis Brine? and I was wondering if I should seek out someone with Cass County Brine LLC aka Standard Lithium?  Feel like my offer was pretty low and the lease form, thanks to you guys, I know is pretty standard or bare bones.  I'd like to see or know the CCB LLC lease form and know what the latest bonus and royalty offer is.  Just for comparison and to have good counter offer information to use.  Or maybe I can get them to offer me as well if it's a better bonus and better terms.  Not sure on all this brine/lithium stuff, but my family has done oil and gas leases in the past.  I've read a few of the articles linked here.  Not enough to really know what I'm talking about though.  Sent out a friend request.  Let me know via message or post in the group por favor.

Permalink Reply by Skip Peel - Mineral Consultant on August 30, 2023 at 5:50

John, there's not much to tell since you've taken the time to read through the discussion thread. Good job. There is insufficient information available presently for anyone to have a good handle on what the value of mineral rights prospective for the Smackover may be.  It is certainly considerably less than it will be in a year or two.  Yes, contact any company that you think might make a counter lease offer.  Lease competition benefits mineral owners.  You will likely get additional offers if you choose to wait. 

The challenge in the early months or years of a land rush is whether to lease with the thought that the bonus may be all you'll ever get if your minerals turn out to not be economic for brine/lithium.  If bonuses were high enough, I could see those with current financial needs executing a lease.  The bonuses are not there.  And as with oil and gas, the more important term is the royalty clause in the case that the minerals are found to be economic.  So plenty of unknowns and risk to go around for everyone involved including the investors who are speculating on brine leases.  Plenty of investors speculated in Haynesville Shale leases only to find out they were worthless once enough wells were drilled to define the economic fairway.  Chesapeake had to swallow about 300,000 acres of leases north of I-20 in NW LA and E TX after the first wells came in.  There were no buyers for those leases.  The early wells condemned the area.  The Smackover is a conventional reservoir and is not consistent across its extent.  That makes the risk greater.

Permalink Reply by Josh Ellis on August 30, 2023 at 5:55

Here's the latest I wrote for our firm's blog on the issue, https://ccfww.com/lithium/. 

Permalink Reply by Joe B. Lovelace on August 30, 2023 at 7:36

Josh, very well written.  Joe

Permalink Reply by John Tanner on September 5, 2023 at 14:43

Discussing with some friends, neighbors and extended family this lease came up that I'm attaching and from what I understand has been making the rounds.  Not sure what to make of it?  Seems like your run of the mill wildcatter cut and paste job, but I really don't know enough to be sure.  Is this what Cass County Brine is offering to try and scoop up as many acres as they can while mineral owners in Texas are none the wiser regarding the lithium rush upon us.  Josh would this lease be favorable to the (DLE) technology in your link?

Attachments:

• Cass County Wildcatter Brine Lease.pdf, 199 KB

Permalink Reply by Joe B. Lovelace on September 5, 2023 at 16:10

Folks, just when you think the Brine Lease terms couldn't get any worse for the Lessor, a lease like this is posted.  Sign at your own risk in my humble opinion.

Permalink Reply by Skip Peel - Mineral Consultant on September 5, 2023 at 16:16

Ditto.  Thanks for posting John.

Permalink Reply by Rock Man on September 6, 2023 at 3:21

I read that lease and asked myself "What am I missing?"

Totally ridiculous. 

Permalink Reply by Skip Peel - Mineral Consultant on September 6, 2023 at 3:36

I agree but wish to point out that leases like this are standard operating procedure by O&G operators and O&G speculators.  With Lanxess announcing first production in 2026, there is no reason for lessees to offer competitive lease terms at this time or even in the next year or two.  

When a new "play" hits the radar of insiders, their first effort is to target mineral owners with lease terms that favor the lessee or speculator.  The rush is to get as many unsuspecting mineral owners to commit to a lease before the play becomes widely known, competition develops and terms more favorable to the mineral owner can no longer be avoided.  This is the opportunity to maximize return on investment. 

Although this happened in the early Haynesville Shale land rush, that period did not last long owing to the internet and more specifically to GoHaynesvilleShale.com.  When the general public is informed, lessees lose their ability to target those mineral owners who are clueless to the realities of the leasing phase.  Mineral owners beware.

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