Texas Smackover Lithium Play
As the Smackover (SMK) Lithium (Li) play picks up steam we need to acknowledge that from regulatory and legal standpoints, there will be significant differences between the play in South Arkansas and in East Texas. Very soon we expect to know more about royalty provisions and regulatory guidelines. From past experience with dissimilarities between Texas and Louisiana mineral laws and regulatory statutes governing the Haynesville Shale, we hope to limit confusion and make it easier to access the information that will be pertinent to land and mineral owners.
In order to help members and quests to the website and to avoid confusion, we will start two new discussions, one for Texas and one for Arkansas. There is an abundance of information in the original SMK Lithium discussion threads and members may want to click on them and then save them to their computer bookmarks/favorites to be able to access them in the future as they will eventually rotate off the main page. After 24 hours, comments in those discussions will be closed but the replies will remain available in the website archive. Archived discussions are available by using the search box in the upper right corner of all website pages.
GoHaynesvilleShale.com was one of the first resources for mineral owners to learn basics, share information and generally provide a place where mineral owners could become more informed managers of their mineral assets in the age of the Internet. The website is pleased to continue to provide those services to those who will benefit from the SMK Lithium Play. Please keep in mind two things. You are a key part of the on the ground intelligence network by letting your friends and neighbors know about GoHaynesvilleShale.com and encouraging them to participate in site discussions. And since GoHaynesvilleShale.com is free for all to use, please consider a donation to help keep the website online.
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Replies to This Discussion
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Permalink Reply by Lisa on -
That interview was so encouraging and interesting! Today I heard again from Standard Lithium about leasing my property in Franklin County. Because it seems too early and the benefits to me seem very low, I’m not interested.
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Permalink Reply by Skip Peel - Mineral Consultant on
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Patience, Lisa. We are beginning to see some more aggressive lease offers. It would help if you could share what you were offered.
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Permalink Reply by Lisa on
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The last I heard it was this from our contact:
Lisa:
I heard from the office today and if I could up the offer to $60 per acre bonus consideration and $40 per acre per year royalty would that be enough to interest you. As we have talked previously, we could put something in the lease form where you had control over the surface of your tract.
Please let me know what you think.
Respectfully,
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Permalink Reply by Rock Man on
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No reason that royalty should not be tied to the gross value of lithium extracted - just like Oil or Gas.
e.g. 20% of post-tax lithium revenues.
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Permalink Reply by Lisa on
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That was last summer. I just checked with him to see if it has changed.
I have told him that our inclination is that the royalty should be more like an oil royalty; it should tied to the amount and value of anything they take for profit— any minerals, oil, byproducts, etc.
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Permalink Reply by Lisa on
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Rock Man,
Is anyone being offered percentages of revenues?? That’s the good news I’ve been waiting to hear!!
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Permalink Reply by Rock Man on
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No idea- but land owners should band together and only consider those types of leases for lithium
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Permalink Reply by Skip Peel - Mineral Consultant on
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Lisa and Rock Man, I have a Louisiana client who has been tendered a lease that appears to cover Lithium. I'm waiting for the opinion of my O&G attorneys. The lease form and Exhibit A very much mirror what we see in regular O&G leases. I won't share any specifics until my attorneys weigh in and the client provides approval to share. The lease includes a per acre bonus in the hundreds of dollars and an aggressive royalty. Far from what you have been offered, Lisa. Your offer sounds like what a speculator would offer. Land and mineral owners should beware of speculators seeking leases that cover brine.
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Permalink Reply by Lisa on
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Wow!!! That is great news!!! Will they be using a type extraction that has minimal disruption on the property? We are about to build on our Franklin County land. I’d love DLE in a discreet corner.
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Permalink Reply by Rock Man on
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Size of DLE unit depends on volume goals for lithium extraction plus water volumes. Any facility will be dealing with numerous leases covering "X" acres - not just your tract. Plus there will need to be be one or more wells to supply the lithium rich water. Plus facilities to re-inject stripped water into disposal wells. And surface pipelines (ideally buried) to move the water. (But any pipeline will have right of way restrictions on surface use).
As in some O&G leases, you may want to consider "surface usage restrictions".
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Permalink Reply by Skip Peel - Mineral Consultant on
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I must comment on one statement in the following article. The brine wells proposed have nothing in common with horizontal wells or fracking. A fact obviously difficult for reporters to understand.
Norwegian oil company acquires 45% stake in Standard Lithium’s East Texas operations
- Samuel Shaw marshallnewsmessenger.com 5/22/2024
Canadian mining company Standard Lithium announced in 2023 that it found the purist lithium samples in North America 10,000 feet below East Texas.
Multinational oil companies are taking notice. Equinor, Norway’s largest oil and gas company, acquired a 45 percent stake in Standard’s East Texas and Southwest Arkansas lithium projects this month.
The deal mirrors ExxonMobil’s purchase of lithium assets in Southwest Arkansas last year.
Equinor paid out $30 million in cash to Standard to secure a position in the region’s lithium race, with an additional commitment to invest up to $130 million.
Standard is working to scale up extraction of the key battery metal in the Smackover Formation, where lithium is trapped in salty brine deposits coursing through both states.
Under the terms of the deal, $20 million would go toward exploration and development of Standard’s East Texas properties in Cass, Titus and Franklin counties.
Norway’s oil major is conditioning $70 million of the investment on undisclosed milestones related to Standard’s Arkansas and Texas projects.
“This partnership with Equinor is a major accomplishment for Standard Lithium,” Standard Lithium CEO Robert Mintak said. “It has long been our belief that success in this sector hinges on strategic partnerships with companies who share our vision and bring complementary strengths.”
“With this partnership, we have the opportunity to accelerate our progress and carve out a significant role in shaping the future of sustainably produced lithium,” Mintak said.
Standard and a growing list of companies — many with experience in the fracking and oil industries — are betting on a technology called Direct Lithium Extraction, or DLE, that resembles a fracking well and can siphon up hard-to-exploit brine deposits deep in the Smackover Formation.
Traditionally, lithium is harvested by destructive surface mining and concentrated in large evaporation pools. As the name suggests, DLE systems extract lithium directly from brine once it’s pumped out of the ground.
“Lithium is an essential mineral in the energy transition and is required to meet the projected growth in electric vehicles and broader battery energy storage,” Equinor officials wrote in a May press release regarding the deal. “Production of lithium from subsurface reservoirs with Direct Lithium Extraction (DLE) technologies is emerging as a production method with a lower environmental footprint than traditional methods.”
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Permalink Reply by Skip Peel - Mineral Consultant on
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Thanks, Sam. I hate podcasts with hosts that interrupt their experts so everyone should be prepared for this guy not letting the experts speak to what is important. I think it is worth the time for members to wade through all the unhelpful interruptions in order to get a good take on the basics of Dr. Burba's DLE process. The process is what I would call "on-site, remote DLE" and as such it is not comparable to the major lithium players plans for large scale DLE production. The process however might be used by companies with brine rights to extract and sell lithium on a much smaller scale without the expense of a plant or a pipeline network. Thanks to Joe Lovelace for introducing us to Dr. Burba quite early in out lithium from brine discussions.
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