State Mineral and Energy Board

Partial state mineral leasing sale still brings strong collection

The Louisiana Mineral Board collected $18.7 million in the first portion of its October lease sale Wednesday, with more likely to come on Monday, Oct. 13, when the board reconvenes to finish the sale meeting.

The Mineral Board held two months worth of lease sales in a single day, making for the largest number of tracts up for bid – 367 – in a single meeting since 1947, and that is inclusive of other double-lease-sale days. The Mineral Board doubled up in October because of the scheduled September lease sale was cancelled in the aftermath of Hurricane Gustav.

The lease sales the board approved on Wednesday made for a strong collection day for the state, even though the bulk of mineral leases in the highly active Haynesville Shale formation natural gas area of north Louisiana will not be taken up for final consideration until Monday.

The interest in mineral leasing in Louisiana, especially the Haynesville Shale area, continued despite the recent downward trend in natural gas prices, noted Louisiana Department of Natural Resources Secretary Scott Angelle.

The price of natural gas in the U.S. has been steadily dropping for several months, falling from $12.94 per million BTUs at the end of the first week in July to $8.81 per million BTUs by the end of the first week of August, down to $7.69 per million BTUs at the end of the first week of September, and down again to $6.75 per million BTUs through the first week of October.

Governor Bobby Jindal said, "This strong interest from energy companies in our state is a testament not only to the natural resources Louisiana has been blessed with, but to the welcoming economic environment we are working to foster to encourage business growth

Mineral Board Secretary Marjorie McKeithen said that indicative of the continued willingness to invest in exploration in Louisiana and the Haynesville Shale area was the bid received by Northwestern State University, which received about $4.4 million in lease bonus money, getting approximately $12,000 an acre for the land it had up for bid.

Prior to the lease sale in June of 2008, when interest in Haynesville Shale leases began to spike, the highest lease sale collection in the past 10 years had been $17.9 million in March of 1998, and the combined lease total for the September-October lease sales in 2007 added up to about $7.8 million. Those figures still rank behind the $18.7 million collected Wednesday on a partial sale from the September-October bids in the face of falling natural gas prices and national credit concerns.

“We, as a state, are bullish on the Haynesville Shale,” Angelle said. “Energy exploration companies are still showing their willingness to be work here and to be a part of our state economy, and still expressing their confidence through investing in developing the state’s natural resources.”

The total collected by the Mineral Board in the first four months of the current fiscal year is more than $ 160 million.