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Energy Industry Looks to Northeast Louisiana

Recent and prospective leasing activity spreads potential Brown Dense/Lower Smackover footprint east into new frontier

BATON ROUGE – Today, Louisiana Department of Natural Resources (DNR) Secretary Scott Angelle said that interest in mineral leasing has made a relatively sudden surge in Northeast Louisiana, centered on East Carroll Parish – an area that has struggled for decades with high poverty rates and difficulty in attracting new business and industry.

In the wake of this summer’s announcement of the new energy exploration interest area referred to as the “Brown Dense” or the “Lower Smackover,” spanning portions of north Louisiana and southern Arkansas, the mineral rights for more than 6,000 acres of state-owned land was leased in early October in south-central East Carroll Parish, netting more than $1.8 million in lease bonuses. Two bidders were competing for the leasing rights, and the per-acre price of more than $300 was on level with some of the stronger lease bonus offers anywhere else in the state, excepting only the Haynesville Shale area of northwest Louisiana.

Recently, private interests have nominated an additional 3,000-plus acres of state-owned water bottoms centering on the southwest quarter of East Carroll Parish for bid in the December state mineral lease sale. The area nominated encompasses almost all of the state-owned water bottoms in that area of the parish – and also touches on neighboring areas of West Carroll Parish and Richland Parish, as well as the eastern border of East Carroll. East Carroll Parish Clerk of Court staff report that private mineral lease transfers have accelerated to rate unprecedented in the parish in recent years.

The Brown Dense/Lower Smackover prospect is believed to be a layer of limestone at the base of the Smackover Formation – which itself is a well-known formation that has long been a source for traditionally produced oil and natural gas in North Louisiana.

“A lot of work remains in permitting, testing and drilling before anyone can estimate how successful this play will be or how much will be invested there,” Angelle said. “However, the level of interest brings the potential for new economic activity, both in jobs and companies directly tied to exploration and in possible new spending creating business and job opportunities in an area that has battled one of the highest poverty rates in the nation for decades.”

East Carroll Parish has hosted relatively little energy exploration in its history, with only about 125 wells ever drilled for oil or natural gas. Louisiana Office of Conservation records show that the last 30-plus wells drilled there since 1981 were all dry holes.

Initial development of the Brown Dense formation has begun further to the west, with Southwestern Energy having received a permit for a Brown Dense/Lower Smackover well in Claiborne Parish, even as Devon Energy converted a Morehouse Parish well originally permitted as a traditional vertical well to a horizontally drilled well – the kind expected to be needed to effectively tap the Brown Dense/Lower Smackover.

The Devon well was the first permitted in Morehouse Parish in three years, and has been quickly followed by the permitting of two more targeting the lower portion of the Smackover – including one by ExxonMobil subsidiary XTO Energy. In Claiborne Parish, three other wells have joined Southwestern’s prospect in being permitted for deep portions of the Smackover, with drilling having already begun on one of them.

“When the Haynesville Shale boom came to northwest Louisiana, it made an incredible positive economic impact on an area that already had a strong economy,” Angelle said. “Responsible exploration of this new prospect, even if it does not reach the same fever pitch, could mean a welcome strengthening of the northeast Louisiana economy and greater opportunities for businesses and jobs.”