Petrohawk called us this week wanting to make an offer on our leases in Caddo. Confirmed what we already knew in that the shale thins to the North right at Benton. Anything Benton area and northward is no good. So to any landowners with land north of T19N you are probably out of luck, and better luck next time around. To the south it will just be too deep past the Northern Natchitoches/Southern Red River parish line area. South Caddo, South Bossier, most of Desoto, and Northern Red River appear to be the best spots in Louisiana, and Shelby, eastern Panola, and southeastern Harrison will probably be the best in Texas.

This post was edited on 6/5/08 at 2:32 pm

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Posted by Tiger JJ

Member since Aug 2010

545 posts

Posted on 6/5/08 at 2:21 pm to TigerDog83

How does Kingston/Keatchie/Grand Cane look?

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Posted by TigerDog83

Member since Oct 2005

8346 posts

Posted on 6/5/08 at 2:25 pm to TigerDog83

quote:
For a good well, how much annual income are we talking about it kicking off?

Well, most companies are quietly assuming 5 BCF of gas (Billion cubic feet) plus per well on 60 acre spacing (So about 7-8 wells per section of land). With gas trading today around 12.00 per MCF, each BCF is worth approximately 12 million dollars at todays prices. Assuming again 12.00 per MCF gas prices, and a recovery of 45-55 BCF per section (Per Petrohawk) that is 600 million dollars plus in revenue per section to the oil/gas producer. Take out 7-8% for state severance taxes, and multiply that by a royalty amount of 25%, and you get about 150 million dollars per section to the landowner (royalty owner). This will vary by section and location, and of course gas prices themselves vary, but it would not be surprising to arrive at around $200,000 per net mineral acre in royaties over the next 20-30 years.

This post was edited on 6/5/08 at 2:27 pm

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