State Mineral and Energy Board

State mineral leasing sale second highest collection on record

The Louisiana Mineral Board collected $93.8 million at its August lease sale Wednesday, nearly doubling the $48.7 million collected in July. The majority of the August lease sale dealt with state-owned land, meaning a windfall for the state of Louisiana.

Department of Natural Resources Secretary Scott Angelle noted that the August sale was the second biggest lease sale the Mineral Board has handled since 1969. The highest recorded sale was $157.7 million in May of 1980. The August 2008 sale handily outstripped what had been the second highest lease sale -- $57.1 million in April 1978.

According to Mineral Board Secretary Marjorie McKeithen, $92.2 million of the bonus money was generated from leases granted within the Haynesville Shale play.  The Haynesville leases covered approximately 4,070 acres in Caddo, Bossier, DeSoto, Bienville and Red River Parishes.  The royalty percentages on the Haynesville leases ranged from 25% to 30%, according to McKeithen.

Gov. Bobby Jindal on Wednesday said the lease sale, far and away the biggest single sale since the 1980s, pays dividends not only in the direct dollars to state and local government in lease bonuses and possible future royalty and tax dollars, but by continuing to draw interest to the state and boosting economic development.

"The rush of interest and investment in the north Louisiana right now represents a continuation of the historic opportunity our state has to grow existing Louisiana businesses and attract increased investment to our state to give our children more opportunities to pursue their dreams right here at home," Jindal said.

Angelle said that his department's next responsibility, as with all development of the state's natural resources, is to make sure the mineral leases are used to return the most value to the state in the most environmentally responsible way.

"We are excited about the opportunities the new interest in north Louisiana has brought and will bring and are preparing to help oil and gas companies begin their development work as quickly as possible while holding them accountable to do it the right way," Angelle said.

Angelle said that the state Department of Wildlife and Fisheries benefited directly from the lease sale Wednesday, netting about $11.7 million in bonus money for the mineral leases on land under its control.

"It's a case of our non-renewable resources benefiting the state's renewable resources," he said of the financial boost for Wildlife and Fisheries.

State Wildlife and Fisheries Secretary Robert Barham said the lease sale on his department's property included restriction on exploration companies that will mean Wildlife and Fisheries lands will not allow surface drilling, while still getting the benefit of lease sale money to help protect the state's wildlife.

"We haven't allowed them to change the habitat in terms of areas to harbor game or promote hunting," he said.

Because almost all of the Haynesville leases granted today were on state-owned land and water bottoms, all of the bonus money collected on the state leases and 90% of any future royalty payments will go into state coffers, according to McKeithen.  However, the parishes in which the leases are located will receive 10% of the royalty generated on the leases once production begins, she added.

The total collected by the Mineral Board in the first two months of the current fiscal year is $142.6 million.

"It was quite a day here at the office, a great day for the state," McKeithen said.

CLASSIFICATION	NOMINATED TRACTS	NOMINATED ACREAGE	LEASES AWARDED	NO. OF ACRES	AMOUNT OF CASH PAYMENTS
Lease Sale August 13, 2008
State Offshore Leases	14	15,665.360	3	755.470	$366,438.25
State Onshore Leases	52	15,734.610	42	6,184.230	$89,337,705.78
State Dedicated Leases	1	198.000	1	198.000	$80,388.00
School Indemnity Lands	1	0.560	1	0.560	$15,400.00
State Agency Leases	4	353.680	4	294.500	$4,031,768.00
Total Sale	72	31,952.210	51	7,432.760	$93,831,700.03
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: It has been determined that Tr. 40024, & 40026 listed as inland tracts and Tr. 40057, 40058, 40059, 40060, 40062 & 40063, listed as Vacant State Land tracts, are in fact dedicated Loggy Bayou WMA tracts. There were 8 leases covering 314.89 acres for a cash consideration of $7,411,850.00. These amounts will be adjusted to the 2008 - 2009 Fiscal Year totals for next months state lease sale.
2008-2009 Fiscal Year
State Offshore Leases	31	38,711.900	8	2,344.270	$786,391.60
State Onshore Leases	69	24,964.200	53	8,742.850	$90,841,793.97
State Dedicated Leases	26	42,140.420	4	897.500	$530,099.00
School Indemnity Lands	1	0.560	1	0.560	$15,400.00
State Agency Leases	12	1,983.983	12	1,924.803	$50,464,982.24
Total Year to Date	139	107,801.063	78	13,909.983	$142,638,666.81
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.