Replies to This Discussion

Permalink Reply by the negotiator C1-D1 on July 11, 2008 at 3:17

Are you related to JB frye family from Shongaloo?

Permalink Reply by hoover182 on July 16, 2008 at 5:14

I have mineral rights at T 19 - 15 W - Section 28. Am I in the right discussion group?
Thanks.

Permalink Reply by tatterscreek B1 on July 16, 2008 at 12:31

Are you in Webster Parish? I am in 10W and it starts at the Bossier/Webster parish line and goes to Dixie Inn.

Permalink Reply by Johnyd on July 25, 2008 at 2:18

Brian, Do you have a area or section # on this. Thanks

Permalink Reply by T.Smith on July 25, 2008 at 11:42

We are in section 19 and leased 200 acres about a month ago. We are hearing that now they arent wanting this area anymore.

Permalink Reply by tatterscreek B1 on July 25, 2008 at 14:57

They may have what they need for a well here. Where are you in 19? We may be in the same section, in which case they might have enough leased for drilling. We are in section 15. I believe they only need 51% leased in a 640 acre section before they can drill.

Permalink Reply by Snake Stewart on July 25, 2008 at 18:25

That is correct tatterscreek but that would leave 49 % of the section as working interest business partners. They don't want partners.

Permalink Reply by tatterscreek B1 on July 26, 2008 at 1:13

I'm curious as to what the advantage to the OG's would be in having more leased acreage in a section and simply force pooling some owners. Do you know how the OG's work with the forced pool owners? The only thing I can think of is that they would have to pay a higher royalty to their forced pool "partners". I don't know if this is the case, however.

Permalink Reply by Snake Stewart on July 26, 2008 at 3:31

Liability to their business partners. Lets use some of the Barnett numbers for easier comparison.

If over the life of the play , 1 acre has a value of $1,000,000 and you sign a lease for 25 % royalty, your total before taxes would be about $250,000 per acre over the life of the play.If everyone is leased in your section of 640 acres then the payout to leased mineral owners would be roughly $160,000,000 without costs and any fees whatsoever figured in.This is just rough , simple math without exacts figured in.

If , according to your question as to the forced pooled 49 % "business partners" as we will call them today , the % of royalty payout were at 51 % , it would greatly affect the profits of said company. In the earlier example all would receive a 25 % payment. In this example only 51 % would recieve this $250,000. The rest of the "partners" would receive a much greater payout over the life of the play. These pooled individuals wouldn't receive royalties but would receive procedes from the production of "their " well's.Even with penalties and trumped up fees the payout for unleased could be at 75 % of total production. That would mean the total payout would be , to the unsigned , $750,000 per acre or $235,200,000 per section. Add the leased individuals $81,600,000 to that figure and it comes to $316,800,000 per section.

If the 51 % leased had been payed a $10,000 per acre average , that would total $ 84,860,000 per section. Even if O&G's paid a $50,000 per acre bonus to the 49 % that would have been unsigned , It would still cost O&G's an additional $ 9,190,000 per section not to sign everyone in the section. Multiply those section numbers by total townships in your area , then by townships in all the other areas. It quickly would run into the BILLIONS of dollars it would cost O&G's to force pool in this play with those numbers ! Not going to happen.

When Twin Cities and the Petrochickenhawk cronies tell you your acre is worth $5,500 , take it or leave it !......Tell him to leave it !
This isn't your ordinary everyday O&G play. This is the Haynesville Shale , the largest O&G field in the continental United States. At the current time ( will move up a spot or two in a few months ) the 4th largest in the WHOLE WORLD !!!!! You had better get paid, cause O&G's sure will !

Permalink Reply by Paul Cb4/W1 on July 26, 2008 at 5:07

Back in April of this year I heard from someone in the know that KCS somehow had left off a 6 acre tract when they had leased a section. This land is in section 14 of the Terryville field in Lincoln. I was told KCS paid $200K to lease these 6 acres to complete the section.

Petrohawk highlights section 14 in their lastest investor presentation (RBC Capital Markets Energy Conference) on page 19 and it shows that each well is averaging 6.3 MMcfe/day. And yes there are many wells on this section and they continue to permit it. So did KCS make a wise investment by leasing the remaining 6 acres? I would say so.

Permalink Reply by Snake Stewart on July 26, 2008 at 6:09

Absolutely they made a wise investment !

Permalink Reply by Aubrey C. Sanders, Jr. on July 31, 2008 at 12:52

Yes, you can bet on that!

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