State Mineral and Energy Board

September-October mineral lease sale nets $43.5 million

The state Mineral Board collected about $43.5 million at its lease sale for September and October, completed Monday.

The board, which had to double up the lease sale after canceling the scheduled September sale due to the effects of Hurricane Gustav, had 367 tracts up for bid, the most handled in a monthly meeting since 1947.  The unusually large number of tracts led the board to split its meeting into two days - Wednesday, Oct. 8 and Monday, Oct. 13.

The first portion of the lease sale, held last week, brought in $18.7 million, with some of that coming from leases in the highly active Haynesville Shale formation natural gas area. The lease sales approved Monday came mostly from the Haynesville Shale area to make up the balance of the $43.5 million total.

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.

Department of Natural Resources Secretary Scott Angelle said the results of the lease sale show interest in the Haynesville Shale still remains strong, with prices offered for leases tied to the Haynesville Shale far higher than were seen in the rest of the state.

For the parishes which have been the primary interest area for Haynesville Shale - Bossier, Caddo, DeSoto and Red River - lease sale prices have averaged about $19,500 per acre for 2008, compared to about $532 an acre in 2007, about $252 an acre in 2006 and about $374 an acre in 2005. For the state as a whole, those per acre averages are about $2,510 in 2008, compared to $532 in 2007, $374 in 2006 and $358 in 2005.

"State and local governments have seen tremendous financial boosts from these lease sales, and that's before any real production has begun," Angelle said. "In the long term, once production begins, severance taxes and royalties will continue to contribute to our economy."

The figures released today show the following totals with regard to activity in the Haynesville area of north Louisiana:

Highest price per acre awarded:

The average price per acre for those parishes so far this year amounted to $19,521 as compared to $513 per acre last year, and $252 per acre in 2006.

State Mineral Board Secretary Marjorie McKeithen said that the ongoing investment in developing Louisiana's mineral resources has delivered beyond expectations for the state even in an environment of decreasing natural gas prices and national credit concerns.

"The state of Louisiana has been on a winning streak, with each of the past four lease sale collections rivaling what we might expect to see as an annual total in recent years," McKeithen said.

For the fiscal year that began in July, the total collected by the Mineral Board is $186.1 million.

CLASSIFICATION	NOMINATED TRACTS	NOMINATED ACREAGE	LEASES AWARDED	NO. OF ACRES	AMOUNT OF CASH PAYMENTS
Lease Sale October 8, 2008
State Offshore Leases	28	43,800.99	18	7,457.530	$4,604,561.790
State Onshore Leases	220	144,657.24	95	24,057.261	$33,999,014.130
State Dedicated Leases	35	54,660.15	1	563.280	$287,272.800
School Indemnity Lands	0	0.000	0	0.000	$0.00
State Agency Leases	84	8,228.13	13	440.250	$4,641,286.660
Total Sale (Parts 1 & 2)	367	251,346.510	127	32,518.321	$43,532,135.380
NOTE: The totals for this sale do not reflect any options that may be exercised or revisions to acreage and cash amounts that may take place after this sale date which may cause these totals to change. NOTE: Due to Hurricane Gustav, the September Sale was postponed and is now included in the October sale.
2008-2009 Fiscal Year
State Offshore Leases	59	82,512.890	26	9,801.800	$5,390,953.39
State Onshore Leases	289	169,621.440	148	32,800.111	$124,840,808.10
State Dedicated Leases	61	96,800.570	5	1,460.780	$817,371.80
School Indemnity Lands	1	0.560	1	0.560	$15,400.00
State Agency Leases	96	10,212.113	25	2,365.053	$55,106,268.90
Total Year to Date	506	359,147.573	205	46,428.304	$186,170,802.19
NOTE: The Fiscal Year totals include this sale totals and also options exercised and revisions to acreage and cash amounts that may have taken place from the date of the last sale to this state lease sale.