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Permalink Reply by ELLIS HUGH on June 26, 2009 at 4:27

Western Bienville Parish (9W & 10W & Western Portion of 8W) is currently seeing offers around the $3,000 - $5,000 an acre. The majority of these offers are for top leases on acreage expiring September - December 2009. There are also some lesser offers from 'folks' trying to pick up leases 'on the cheap'.

I would expect lease offers to increase considerably once the leases expire. I would NEVER advise signing a top lease. Definitely not in a mineral owners best interest, in my opinion.

Of course, this information is based on what I am being told from a limited number of mineral owners (friends) in the area.

--EH

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Permalink Reply by The_Baron on June 26, 2009 at 4:44

I would NEVER advise signing a top lease. Definitely not in a mineral owners best interest, in my opinion.

I would say that there are many times signing a top lease could be in the best intrest of a mineral owner.

Say for example you have a few months left on your current lease, the company may still drill, but you can sign a top lease that gives you the money now...might be a good idea. It all depends on your situation.

I would advise only signing a top lease that gives you the money, or good portion of it now, with the added stipulation that the money will not have to be repaid should the current lease be HBP.

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Permalink Reply by ELLIS HUGH on June 26, 2009 at 5:00

If an operating company wants to drill a well in a specific section, they can negotiate to acquire the acreage at the expiration of the current lease. Expiring leases will bring in new players, which creates more competition, and subsequently better terms for mineral owners. One large tract leased to a specific operator for a longer term than others may scare away other prospective operators from pursing leases in a section.

I would probably be okay with a top lease having a 6 month term (or similar).

I agree top leases should not be completely ruled out. But the situation and terms would have to be extremely favorable for me to consider. You are correct, each situation is unique and all options should be considered.

The situation I am specifically speaking about is 'leasing companies' seeking 2-3 year leases and some even asking for extension options.

This is, of course, my humble opinion and how I personally conduct my business. This is not an attempt to advise any other mineral owners (attorneys are good for that).

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Permalink Reply by HBP on June 26, 2009 at 5:45

Yes, please be specific Antsu. What is "considerably higher"? Are you saying considerably higher than 600-900, or higher than 3k-5k/acre

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Permalink Reply by Antsu-in-Japan on June 27, 2009 at 5:23

Both...

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Permalink Reply by Antsu-in-Japan on June 27, 2009 at 0:44

Sorry Baron...not at the moment. Will follow up later when things are finalized.

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Permalink Reply by Bobi Carr ("parker") on June 27, 2009 at 2:48

KB,

One thing that everyone needs to consider is that just because there is not a heavy focus in their area at the present time doesn't mean that they are not in a great spot. The companies seem to be very judicious in their leasing at present. The REAL offers aren't going to happen right now unless the company is focusing in on your area. They are focused on the areas that are no risk, but don’t be fooled for a minute into thinking that the “proven” area isn’t going to expand.

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Permalink Reply by Bobi Carr ("parker") on June 27, 2009 at 3:16

Jay,

Lot's of areas within the defined core area are not presently receiving offers. And prices in some areas have doubled almost over night.

I look at it like the companies have eaten at a buffet, they're already full so they can't have every dessert that looks good. They have to chose one this visit and try something else next time they come to the restaurant.

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Permalink Reply by Laman_71106 on June 27, 2009 at 6:59

Confirmed offer and acceptance $5000 per mineral acre and 1/4 royalty share on S07 T16N R13W this week. Petrohawk thru Red River Land. The landman says that the plan is to drill and cap till prices improve.

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