re: Haynesville Shale

Per leasing with land men: Good friends of mine leased this past Fall 100+ acres in south Caddo parish for $120/acre and small royalty...my neighbor just signed lease on 13 acres/$9,000/acre and 25% royalty...7+ months have passed between these two deals. One signed through a representative of an O&G co. and one signed directly with the O&G. The JP Morgan fellas believe that lease-hold (interest only) contracts per acre (with some kind of computer mumbo-jumbo about a royalty calculation worked into their computer models) are worth (to the mineral owner) as of May 08...between $10K and $42K per acre/Bonus moneys. Spoke with them myself. Big spread. Today...I still talk with landowners in Shreveport/Bossier/Red River/Desoto who are being approached for $2K up to $5K Bonus moneys and are being told that this "deal" is a one shot...this day only offer by the O&G companies. Nothing adds up here. And...the O&G companies are submitting legal notices to the State Conservation Commissioner that include "force pooling" clauses in them. Not voluntary pooling...force pooling.

We need the straight talk from O&G experts that will help the mineral owners get a GREAT deal on their contracts. The O&Gs will be reaping thousands of X's the benefits and $$$$ far longer than the mineral owners. I don't see why any landowner...large...or small...should be getting schmucked in this process. Not one dime will the O&G CEO's be losing sleep over...they have already schmucked over 300,000 acres of landowners last Fall.

I think all sides of the Haynesville Shale Play could get GREAT deals if the leasors had as much integrity as my fellow neighbor leasees possess. Especially those who signed this past Fall, in good faith, with these companies (that "knew" what was sitting under the surface and "knew" exactly how this play was going down)!

Thanks for all the inside info you all are providing...It helps all of us in this HSP.

DrWAVeSport 6/5/08 p.m.

P.O. Check out Questar (bought lease-hold interest only in 22,000 acres (one parcel in Red River and one parcel in Bienville parishes)for $655 Million on Feb. 29, 2008. Press release 3/3/08. Questar/out of Utah....not even a big player in this play...

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The JP Morgan fellas believe that lease-hold (interest only) contracts per acre (with some kind of computer mumbo-jumbo about a royalty calculation worked into their computer models) are worth (to the mineral owner) as of May 08...between $10K and $42K per acre/Bonus moneys. Spoke with them myself

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I just spoke to a contact in Shreveport who said the local paper there today was talking $4500-6500 per acre upfront. I figure if they're actually printing that, the real figure HAS to be much higher.

I am a landowner in Southern Sabine Parish and I am told that the shale is too deep that far South. Does that mean that eventually they may move into that area? It seems that the upfront costs to drill are really small beans compared to the returns everyone is talking about. There is very little information about the actual size of the Haynesville Shale. I am sure that it is in the best interest of the oil companies to keep this quiet because they are already having to pay a lot higher prices than they were before the news broke. I have also been researching this topic all over the internet and have learned more about the Haynesville Shale on this blog than anywhere else. Please keep it up and thanks for the information.

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P.O. Check out Questar (bought lease-hold interest only in 22,000 acres (one parcel in Red River and one parcel in Bienville parishes)for $655 Million on Feb. 29, 2008. Press release 3/3/08. Questar/out of Utah....not even a big player in this play...

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There were a lot of producing Cotton Valley wells that came with that deal, hence the high price they paid. It WAS NOT undeveloped acreage. Wells came from Will-Drill. Nice try though......

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Nobody "knew" that this play would get this hot so quickly. If you bought stock a year ago for $10 a share and today it was worth $50 a share would you be upset because you sold out at $10? It is practical business sense to buy things as cheaply as possible

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Agreed. Even if they did know, it is up to the land owner to look over the offer and maybe do a little research. Then the land owner needs to decide whether or not the offer was acceptable.

It is not up to the oil companies to pay each land owner top dollar.

Even if it were somehow up to the O & G companies to pay landowners top dollar, you'd get pretty old sitting around and waiting for them to actually do it. This is the real world.

I've read in a few places that the Petrohawk CEO is wanting to sell the company and "cash out." This could explain the news being leaked to the public. Petrohawk might think the play won't be as valuable as everyone else does. I can't figure why else he'd want to sell the company when they're sitting a potential gold mine.

LINK

Sorry...Don't mean to his a sore spot with anyone on either side of the deal making. FYI I worked for an O&G company for 10 years...I know the game.

And...YES...The SAME O&G Players in the Barnett are the SAME as in the Haynesville. The Barnett shakedown started almost 3 years ago...Same song and dance that is playing out in our area.
They KNEW it all!!! They have known for years this shale was in NWLa and were insiders as to knowing they had the new technology and that the NG prices were climbing higher/in tandem with the Crude Oil prices...

Most were suckered in Ft. Worth/Arlington and most have been suckered in NWLa. Nothing personal to anyone...not from my point of view.
Business is Business...I agree.

But, give us all a break, no one appreciates getting schmucked. Bet not even you.

And...the 800+ who attended last night's Haynesville Shale Play Meeting @ Captain Shreve H.S. in Shreveport (including the Mayor, City CAO Tom Dark, O&G attorney Lang Wedgeworth, etc.) seem to be in agreement with moi. Nobody needs to be taken complete advantage of here...That's my opine...and, nothing personal to any bloggers' opinions. Each to his own.

I am enjoying your opines too. Thanks again for the info from the other side of the play.

DrWAVeSport 6/6/08 NG @ $12.70 as we speak.

Didn't mean to be to sarcastic. But what the Times never seems to mention is that to develop one 640 acre section you are looking at ~64 million dollars up front. This is assuming $6,000 / acre (I know a lot of people signed for less than this...but leasing the mineral rights is small change in comparison to money needed to drill the wells)for leasing mineral rights, then 6 million dollars per a well with 10 wells per a section. This does not account for building the necessary pipelines, roads, etc...

Also, I'm not financially involved on either side of the play...