Hi Everyone,
Does anyone here have any mineral in the Tuscaloosa Marine Shale (TMS)? Encore leased over 200K acres about 2 years ago and drilled 4 very expensive dry holes (they flowed several hundred BPD initially but they all dropped off in quick order (a matter of weeks) and were eventually written off. Encore recently was bought out by Denbury. Denbury specializes in CO2 technology for enhanced oil recovery (EOR). It is hoped that they will apply their CO2 tech to the TMS.
As a landman and mineral owner I have been following activity in the TMS from a distance the last couple of years. I was also disappointed with the failure of Encore to effectively produce the shale. I don’t anticipate a significant increase in exploration until oil prices increase.
In which parish/county are your mineral rights located? How long is your lease for?
We are in Tangipahoa Parish.
Chase,
My family has about 160 acres in Amite county, MS we never leased (we didn’t know the TMS story and $50.00/acre didn’t seem like much to us. Anyway, our neighbors mostly did lease but it was for 2 years (I think the was a one year extension option) but that was about 2 years ago so they are starting to run out.
WRW
Chase said:
As a landman and mineral owner I have been following activity in the TMS from a distance the last couple of years. I was also disappointed with the failure of Encore to effectively produce the shale. I don’t anticipate a significant increase in exploration until oil prices increase.
In which parish/county are your mineral rights located? How long is your lease for?
We are in Tangipahoa Parish.
What is a favorable lease bonus and royalty % for a lease in the TMS St Helena parish area? is it true Denbury is leasing more land for $2,500.00 an acre?
I own land and the mineral rights to property located in East Feliciana and Wilkinson Co. Several years ago was approached to lease mineral rights but declined due to low offer. Waiting to see what is going to happen this time. Heard they were only offering $125-150 an acre and a 3/16 royality.
I asked someone with contacts at Denbury. They said they had not heard of any new leasing by Denbury and certainly not at $2500 an acre. Maybe someone else is looking at a different play entirely.
Denbury usually doesn't lease to drill - they buy old low producing fields and increase their production with CO2 but of course when they bought Encore, they inherited the TMS acreage. They need to move soon because those leases are expiring.
What is a favorable lease bonus and royalty % for a lease in the TMS St Helena parish area? is it true Denbury is leasing more land for $2,500.00 an acre?
Mr. McGraw,
I also agree the lease bonus is too low. Consider the need to protect my Tree Farm and potential profit for a drilling company with oil over $100 a barrel, the offer will have to be much better. I think consolidating our efforts to negotiate a higher price will be of benefit to us. I have several neighboring landowners with large acreage getting involved.
Denbury is not leasing. They acquired Encore’s prior position as part of a much larger asset purchase. They have no interest in the shale and are seeking a partner to buyout their position. The current market rate is $125/acre for a 3 year paid up lease. Royalties vary UP to 1/5.
The landowners are organizing in various areas of Feliciana and are starting to get good lease rates for their land. if you can get enough of your landowners together you can end up with decent lease terms. Please join the East Feliciana Parish Group to get more informaiton. I know they ended up better than 125 an acre and also BETTER terms on other items also, like protection for tree farms etc.
Once landowners organize they really do have the ability to command better terms.
Does anyone know a landman working the Amite county area?
Thanks....Anthony
Have been approached to lease land in Wilkinson Co. MS for $200 acre with 1/5 royalty. Have begun to prep well site on Bowling Green road off of hwy 24 just east of Woodville, MS. Was wondering if this will effect leasing in the Northwest portion of East Feliciana Parish? Will have to watch progress and see if they hit pay with this first well.
R. McGraw said:
I own land and the mineral rights to property located in East Feliciana and Wilkinson Co. Several years ago was approached to lease mineral rights but declined due to low offer. Waiting to see what is going to happen this time. Heard they were only offering $125-150 an acre and a 3/16 royality.
Is there much leasing going on in Mississippi? Seems like most of the activity is in LA.
Chase,
I have 168 acres of mineral rights in the heart of the TMS in Wilkinson County. Have 3 or four offers in the last 1 1/2 months to lease but they don't seem to be for an equitable amount or the wording is not satisfactory.
Can you possibly put me on to someone who might offer me a decent lease?
Our property is in the T3N R1W area just north and a little east of Woodville near Buffalo River.
Thanks much,
Bob