Haynesville Shale: Leasing Prices and Mineral Rights Update

As I updated my www.oilshalegas.com website each quarter, I always like to dig deep into these conference calls to see what the CEO's out there are saying. You can really get some interesting comments. The following is from Seeking Alpha from the Range Resources RRC CEO John Pinkerton on the Haynesville Shale and Mineral Rights leasing.

I think there's been a huge amount of discussion in terms of what's happened with acreage prices throughout some of these shale plays, and to me it makes absolute sense. I think when we all went on vacation in June to the beach, gas prices were $12, $13 and we were feeling all great. By the time we get our kids in school, they were less than $8 going down. So clearly what's happened is I think the industry responded in the way that you would think in that acreage prices have plummeted. I think the classic example is the Haynesville where you had complete hysteria, prices going up to $30,000 an acre for trend trend acreage which is unbelievable. I think a lot of those companies have shut down, and now you can get acreage in the Haynesville for $5,000 or less. And the same thing, not clearly that volatile, but in the Barnett, we see acreage coming down maybe as much to half or maybe even two-thirds as what it cost during the height of the land grab.

The good news is and we've gone out of our way to give you both what the cost was in 2008 so far and we continue to lease and what we got from inception, and the good news is that the Marcellus never quite hit those kinds of frothy prices. We've heard prices as high in the Marcellus as $5,000, $6,000, $7,000 an acre. We haven't paid that. We might have paid for five acres offsetting one of our drill sites, just to get somebody that was just being obstinate. But they've never really gone that high. The good news is that given the size of the Marcellus, there's still lots of acreage to pick up but we just got to be careful and we'll continue to be careful. We haven't bought any trend acreage, what we call just rank trend acreage in the Marcellus this year

Haynesville Shale - Louisiana Lease Sale 2nd Highest Ever ( 93.8 million ) Caddo, Bossier, Bienville, De Soto Parish

Since the Louisiana Lease Board began keeping records back in 1969, there has only been one sale that was higher then the 93.8 million dollar sale yesterday 8-13-08. The Haynesville Shale is hot, that is all you can really say right now. The record? Year 1980 with a record 157.7 according to the LLB.

Companies have been flocking to the northwest Louisiana area in pursuit of mineral rights agreements so they may explore the Haynesville Shale for Natural Gas.

4,700 acres were sold in the following areas: Caddo, Bossier, Bienville, DeSoto and Red River.

Something tells me the Haynesville Shale is expanding rapidly. I even think the core area could be getting bigger. Heck, the CEO of Chesapeake Energy is on the record saying he believe one day down the road, the core zone area of the Haynesville shale could pay $50,000 per acre. Wow!

Barnett Shale - Chesapeake ( CHK ) record mineral rights lease

Chesapeake Energy CHK is working on a 650 acre lease on Lake Worth and Fort Worth properties located in the Barnett Shale. If this mineral rights lease deal gets done, it will be a record! Rumor has is Chesapeake is ready to pay out a $30,000 per acre signing bouns as well.

About 1,200 property owners in Boat Club Estates, Highland Lake Estates, Jinkens Heights, Crestview, Crestridge, Triangle Estates and Lakeview Estates are involved in the lease. The land is roughly bounded by Lake Worth to the west, Azle Avenue to the south, Boat Club Road to the east and Basswood Court to the north.

XTO appears to have been one of the bidders pushing this deal to a record.

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