Tuesday, June 21, 2011

How to sell mineral rights in Red River Parish, Louisiana

Red River Parish, Louisiana is undergoing development of the Haynesville shale, an oil and gas formation from 11,000 to 13,000 feet subsurface. Many wells have been drilled over the past few years. There are some sweet spots in Red River Parish but there are also some bad spots. Roughly the eastern 25% has not turned out very well. But in other areas of the parish, decent to prolific production has been found. The production is dry natural gas; there is no oil produced. If oil were found in the Haynesville shale, it would help, as the price of crude oil relative to natural gas is much higher. Natural gas prices have been low for three years now.

By the way, persistent rumors that there is oil production below the Haynesville shale are just that. We have seen no verification of this. For now, that's all it is, a rumor. Rumors are common in the oilfield.

Those who own mineral rights and royalty rights in the Haynesville shale are likely subject to an oil and gas lease owned by Encana. There are some leases owned by Chesapeake, Petrohawk, Shell (SWEPI), Forest Oil and QEP Resources (Questar). Encana and Shell have a joint operating agreement in an area of mutual interest. Encana/Shell/SWEPI, by far, has more acreage in Red River parish than any other operator.

Some people want or need cash, for any number of reasons and selling mineral rights can bring a big cash payday. For many, it's the only asset they have that has a lot of value. And selling mineral rights (sell royalties) doesn't affect their land ownership, if they own the land. Plus, in Louisiana, a sale of mineral rights creates a servitude, and this servitude creates prescription. Which means that if drilling does not occur within ten years, the mineral rights revert to the person who owns the land, the landowner. So, if you sell mineral rights in Red River parish, they won't be gone forever. In other states, selling mineral rights means they are gone for good.


Here are the steps to take if you are considering selling mineral rights in Red River Parish.
  1. Consider whether you should sell or not. (See Why Sell Mineral Rights.)
  2. If you decide to sell mineral rights or if you own only royalty rights, to sell royalty rights (sell royalties) in Red River parish, you need to gather some information. You'll need to know the section, township, range of your property, gross acres, net acres you own, which oil and gas company the mineral rights or royalty rights are leased to if an oil and gas lease exists, the date and term of the lease, the royalty percentage in the lease and also your property description, sometimes called the legal description.
  3. You need to make a deal with a mineral rights buyer in Red River parish who buys mineral rights and buys royalty rights. (Here is a mineral rights buyer.) Be prepared to furnish copies of documents if asked.
It's not a difficult thing to do, especially if you have a courteous, professional mineral buyer with a lot of experience, such as the one suggested above! For additional information about selling mineral rights or selling royalty rights in Red River parish (sell royalties), it's suggested you review the information, How To Sell Mineral Rights In Red River Parish Louisiana. Good luck with your sale of mineral rights (selling royalty rights) in Red River parish!

Sunday, June 19, 2011

New Shale Play: Tuscaloosa Shale

Louisiana has long been an oil and gas producing state, having had prolific production onshore for about 100 years. And offshore, Louisiana leads the nation in oil and gas production. All of these oil and gas reservoirs are what we call conventional reservoirs, meaning the oil and gas is produced from porous and permeable or fractured sandstone, limestone or dolomite.

In the past few years, a new type of reservoir has come to the forefront -- unconventional. Primarily, these are source rock shales that heretofore were thought to be that and only that, a source rock that fed the conventional sandstone, limestone and dolomite reservoirs. But around 1980, George Mitchell of Mitchell Energy became convinced that the Barnette shale around Fort Worth, Texas held potential. He began experimenting, drilling many wells, spending a fortune, and not having much success. But, over about 20 years, he finally was able to crack the code and the Barnette shale became the first large-scale shale play in the world. And production soared, due to two technological achievements -- horizontal drilling and hydraulic fracturing.

The Barnette shale became the largest producing field in the USA and held that title until 2011, when the Haynesville shale took over the top spot. This shale play covers much of northwest Louisiana and east Texas. Well over 1,000 wells have been drilled and completed in the Haynesville shale. (The Barnette shale has over 14,000 producing oil and gas wells as of January, 2011.) The Haynesville shale boundaries are still being defined to the south and southwest, and development drilling is in the early stages.

Louisiana mineral rights owners and royalty owners are fortunate in that there is a new shale play experiencing widespread oil and gas leasing. It's called the Tuscaloosa shale (Tuscaloosa Marine shale by some) and stretches all the way across Louisiana in the central part of the state. (See Tuscaloosa shale map.) The Tuscaloosa shale is only a theory at this point, as drilling over the years has proved to be non-commercial. Yes, oil and gas are in the Tuscaloosa shale rock but getting it out profitably has been a no-go thus far.

There are several companies active in the Tuscaloosa shale. Devon Energy, Goodrich Petroleum, Amelia Resources, Indigo Minerals and Denbury Energy all have lease positions in the play. At least four wells have been announced for 2011 drilling.

The Tuscaloosa shale is almost the same geological age as the Eagle Ford shale of south Texas. It is slightly younger, but close to being the same "stratigraphic equivalent." The Eagle Ford shale stretches over 400 miles eastward from the border with Mexico, across South Texas to perhaps Sabine county. Thus far, the best production ends at Gonzales and Dewitt counties, but there is more exploration going on the east, towards the Louisiana border.

From there, we cross into Louisiana at southern Sabine parish and this might be the beginning of the Tuscaloosa shale. (We don't know yet!) The potential play goes all the way to into Mississippi. So, if the Eagle Ford shale and Tuscaloosa shale turn out to be productive relatively continuously in this "fairway," it will be a huge field, dare say the largest in U.S. history.

The Eagle Ford shale contains both oil and gas. It is thought that the Tuscaloosa shale will provide the same. In the past 30 years, prolific natural gas production has been discovered downdip in south Louisiana. So, theory is, oil production can be had (with modern technology) updip from the natural gas. This modern technology includes horizontal drilling, coupled to hydraulic fracturing.

Hydraulic fracturing is undergoing attack by environmental groups, claiming that it pollutes fresh water acquifers, causes earthquakes, and all kinds of claims. Yet, over 1 million "fracs" have been performed over several decades, with not one documented case of these claims. So, don't believe everything you read. Yes, the process should be regulated (and already is) but the Feds should stay out of this. The individual states can perform oversight just fine.

If one is a mineral rights owner in the Tuscaloosa shale, it could be their lucky day. This won't be known for a few years, as it will take many wells to "prove it up." But, oil and gas lease bonuses can come in handy, and if they do drill a well in a unit containing the mineral owner's mineral rights and royalty rights, royalty checks can ensue. And, as it happens in every oil and gas play ever discovered, some choose to sell mineral rights. Very few people have assets that they can sell when they "get in a jam" or need cash for any number of reasons. Selling mineral rights can be a solution for some. Plus, if the play gets hot, mineral rights can bring a healthy sum, and some choose not to pass up a big "guaranteed" cash payday. (See why sell mineral rights for more info on selling royalty rights.)

The announced development of the Tuscaloosa shale will be exciting to watch in 2011 and beyond. Here's to success, for Louisiana mineral rights owners!

If you seek professional help with oil and gas leasing matters or a sale of mineral rights, here is a Tuscaloosa shale oil and gas consultant you can have represent you.

Tuesday, June 7, 2011

Another view on selling mineral rights

Many people consider selling their mineral rights. It can be a hard decision for some. For others, it's easy if they can get enough for a sale of the mineral and royalty rights to do whatever it is they want the cash for. Might be a new car, a boat, the kid's education, retirement, lots of things.

The state of the oil and gas industry depends on what kind of production the oil company or individual has. Lately, the price of oil has been up but the price of natural gas continues to very poor. In some areas of the country, especially the various shale plays, such as the Eagle Ford shale of south Texas or the Haynesville shale of north Louisiana and east Texas, drilling has dropped by a lot! In others, especially if they contain oil or natural gas liquids, drilling has increased. Same for leasing. Some areas are hot and some have gone stone cold. In either instance, often, one can find a mineral rights buyer to buy their royalty rights.

Regarding a sale of mineral rights, I have sold some in the past and I'm glad I did. I could use the cash at the time and it sure was nice to get it. I didn't regret it a bit. I am considering selling my minerals again. It has to do with where I am in life and also to my perception of risk versus a sure thing -- CASH. I'm about ready to pull the trigger. So, I can identify with people who are considering it. I have mineral rights in both the Eagle Ford shale and the Haynesville shale.

As for whether one should cash out and sell mineral and royalty rights, here is another site to review... Is it wise to sell mineral rights.

Good luck!