As of now the lithium interest is in northern Louisiana next to the Arkansas boarder and southern Arkansas but people aren’t interested in your minerals in caddo parish for lithium, they are interested because of the gas.
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Very interesting thread thanks for sharing, no major changes for lithium!
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Hi everyone, While we are on the Caddo subject of O&G & Lithium. We have mineral interests in S34& S35 -19N-14W Caddo Parish. We stopped getting royalties from MarshalllKS#1, Sibley #1,#4 Sentell units. Getting no response from Cinder , SEI,or Moransco operators. I understand these are “units”, so I thought in that area any production would be shared. Does that mean the field is done? In LA does that mean the lease expired and the deed will revert? I’m really at a dead end on my understanding. Also, while I am at it, any Lithium here?
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Different companies use the word “unit” in different ways. Some just use it casually in a well name. Some use it quite specifically in a secondary recovery unit. Some secondary recovery units have been known to file new paperwork that condenses the unit to a smaller acreage. So hard to say. You would need to read the LA oil and gas commission on when acreage will convert back to the surface owner. It is rather complex.
On the lithium question, Caddo Parish is mostly focused on gas production. No commercial lithium production exists YET. Time will tell.
There’s no way for anyone to answer your question without a considerable amount of work but I’ll touch on a few points that will maybe clear some things up.
- “unit” in Louisiana can be voluntary or governmental. A voluntary until is when all the mineral owners and operator get together and make a “unit” out of the area the leases cover. This is how most oil and gas production happened when it all started. The names of these wells will just be a name - so, Sentell #1 tells me that this is a either a voluntary unit with more than one lease or it could be just a lease based well based on one single lease.
A governmental unit will have an order from the Louisiana department of conservation. All acreage in the “unit” will be pooled and as long as the operator leases a neighbor the mineral owners in others that don’t lease will be “force pooled” in the unit.
All units target one stratigraphical formation, for example, the cotton valley, and the size depends on the formation. You can have one piece of property that is included in many units. Shallower wells have smaller units. A unit can be small, say the NW of the NW of the NW, or it can be large as multiple sections.
You can have many units that cover a formation or you can have a reservoir unit (more below). You can have more than one formation in a field, or you can also have one property that is included in more than one field
reservoir units cover an entire formation and they can be small or large. At least part of the property you own is included in the Sentell reservoir unit which includes all of 26, 35, 36 and parts of some neighboring sections. These units resemble amoebas in that they are not perfect squares.
Any producing well in a reservoir unit will hold the entire unit as far as minerals servitudes and oil and gas leases go.
so what’s a mineral servitude? A mineral servitude is created when an owner of the surface and land separates the two in some way. He can reserve minerals when he sells the surface or he can sell all or part of the mineral and none of the surface. He can sell a royalty and not the minerals as well.
If an owner sells minerals to more than one section, as long as you can walk across the land, quarter quarters don’t count, that is one servitude. Things get a little complicated here in how you keep a servitude from expiring to the surface owner if you are no longer that person.
this gets somewhat complicated but if the following conditions exist a mineral servitude will continuing until there has been no production for ten years if there is a producing well anywhere in the servitude that is leased with no unit clause. If there is a unit clause then parts of the servitude could expire while others don’t.
if an owner creates a mineral servitude that includes property that isn’t contiguous (be able to walk across) he can hold a servitude by leasing all the property on one lease, without a unit clause, and any producing well will hold the entire lease.
production is defined as “in paying quantities” and any activity that is trying to establish production. So, if the well is producing all the leases and any mineral servitudes are “held by production aka HPB.” Once production stops, the ten year clock starts, in that 10 years Someone would need to drill a well to stop the clock. Whether or not production is established the drilling of a well restarts the 10 year clock. If it is a dry hole then you have another ten years. If production is established the ten years is in suspense until the well stops producing and then another clock starts.
in order to determine the status of any given piece of property there are MANY variables. Anyone who thinks they can give a simple answer, especially where a reservoir unit is concerned, doesn’t actually know anything about the nuisances of Louisiana oil and gas.
if you haven’t gotten royalties for a while, and you are not the fee owner (surface and minerals) you are probably somewhere in a ten year clock where the minerals will go back to the surface owner if no one comes to drill a well.
As for the lithium. This is not a thing in Louisiana as of now. Arkansas is really the only state in the country who has lithium leases. There is a company who says they can extract lignite out of the fluid byproduct from drilling using some new technology that got everyone really excited but as of last February, when I attended a lunch and learn on this subject given by the legal authority on this in Arkansas, this process was still theoretical and said company had not actually extracted anything.
Further, it is likely that operators are going to try and include any money made as falling under current leases - I’m sure there will be lawsuits and it’s anyone’s guess where it will all end. The only thing a landowner can do is try to get it excluded in any new leases but I don’t know if that’s going to be a hard sell or not because I haven’t had anyone say they wanted to do so and heard an operators response yet.
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Forgot to add that government units have a short hand nomenclature that identify what unit the well belongs to. So any well that is included in the “Sentell unit” which you are in will have “SNT MPT L SU” in front of the name. Each group of letters is shorthand for something. You wouldn’t believe how many landmen I had to ask about this when I first started before I found someone who could finally explain it to me.
This plant is to extract lithium from produced water. Joaquin has several salt water disposal wells, some trucked in from Louisiana.
Thanks for the info. I’m guessing even if I try to read the info in the end I have no say… Appreciated, Blake
Hi Rebecca, Thanks for the fantastic tutorial! Really appreciate that you did all this! Very helpful and interesting. Have a great holiday, Blake
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Interesting. It appears that this is the first facility and is a test site. They don’t expect to make any money until 2027.
Hi J-Walker & Rebecca, Interesting approach . So disposal water from all around will be brought in for processing I suppose. Wonder how that will work with mineral owners. { I have interest in the nearby PDU - Pine Unit also}
That appears to be the plan but, news reports notwithstanding, I think there still a lot more to be figured out with this then is being reported by the companies.
The original articles, which the local news were reporting from, have the “forward looking” disclaimers and they are also actively still trying to raise money for all of this as well.
Hopefully one of the landman organizations will have some more education on this developing issue in the very near future.
Texas passed legislation giving ownership of produced water to whomever takes possession of it. However, the mineral owner may put a clause in the lease reserving a royalty in minerals that may be extracted. Enforcement may be difficult.
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