Your web browser is out of date. Update your browser for more security,
speed and the best experience on this site.
You have successfully subscribed to the newsletter!
07 10, 2012 by Houma Courier
Of the six oil and gas lease sales conducted by the state Mineral and Energy Board this year, more than half have produced winning bids in the Houma-Thibodaux region, with investors chiefly opting for inshore tracts.
The seventh monthly sale of the year is scheduled for Wednesday, but there are no local tracts as of yet being offered to prospective bidders. That's exactly how the January sale ended, too, with no local action.
The only local offshore bids, two of them, awarded by the state this year, came in February, and both were located in Terrebonne waters. That's when Bois d'Arc Exploration paid $275,000 for 915 acres south of the parish land line and Elis Oil and Gas Co. won 125 acres for $90,000.
Since then, offshore action leased by the state has been non-existent locally, although other parishes along the coast have enjoyed some successes. Instead, all of the local interest from investors has been focused on inshore tracts.
During the months of February, March, May and June, roughly a half dozen energy companies spent in excess of $2.7 million on more than 30 tracts of land locally.
The lion's share, or 26 tracts, were located primarily in Lafourche, although sometimes the tracts included portions of the neighboring parishes of Terrebonne or St. Charles.
As a result, more than 6,043 local acres have been awarded to investors since February, including Hilcorp Energy, Gray Production, Square Mile Energy, Tri-C Resources, K-Exploration and Tacoma Energy. Collectively, they paid an average per acre price of about $453 for their Terrebonne-Lafourche tracts.
The high-volume surge locally is part of a statewide trend Natural Resources Secretary Scott Angelle forecasted at the beginning of the year. He said deeper drilling in south Louisiana would be an ongoing boost for the state and energy industry.
The state leasing figures may be bearing that out. Over the past six months, the Mineral and Energy Board has awarded 35 leases in north Louisiana and 121 in the south closer to the coast.
While not all energy companies in south Louisiana are going deep, Angelle said the future could hold a “new chapter” for doing just that. For example, if you move westward along the coast to Cameron Parish, you'll find Chevron overseeing the Lineham Creek well, which is pushing 29,000 feet.
It's a 200-foot-tall rig with a 40,000-foot design capability — it took more than 100 semi-truck loads to ship it to Louisiana. Such investments mean that operators are serious about south Louisiana inshore properties, Angelle said.
“Simply making the decision to move forward with this kind of project and see it through is a vote of confidence by the industry in energy potential and economic future of this state,” he added.
It's certainly a reversal of fortunes of sorts, considering the years that south Louisiana leases went overlooked in favor of tracts in the Haynesville Shale natural gas play outside of Shreveport.
Moreover, the state leasing situation contrasts greatly against the backdrop of federal oil and gas leasing, which is in a transitional period. The U.S. Bureau of Ocean Energy Management has only overseen two Gulf of Mexico lease sales since the 2010 oil spill.
The first, held in December, offered up 21 million tracts for interested investors. The second, conducted last month, attracted $1.7 billion in record high bids.
Don Briggs, president of the Louisiana Oil and Gas Association, said the numbers can be confusing. He noted that 48 companies submitted bids during last month's federal lease sale, compared to the 77 companies that participated during the final sale of in 2010, just prior to the BP oil spill.
He added that the uncertainty surrounding the federal leasing process can be blamed on “unfavorable energy policies.”
As for when Louisiana might see another federal leasing of its nearby Gulf waters, President Barack Obama has released his proposed five-year plan. The U.S. Interior Department recently submitted the plan to Congress for review, recommending 12 lease sales for the Gulf's Outer Continental Shelf through 2017.
The interior secretary is expected to implement the plan within the next two months and the first sale could be conducted sometime this fall. In the meantime, environmental groups are arguing the plan doesn't increase safety regulations enough, and Republican lawmakers are complaining that it opens up too few areas for exploration.
For a closer look at the six lease sales held this year by the state, and for dates when future bidding will take place, visit http://dnr.louisiana.gov/index.cfm?md=pagebuilder&tmp=home&pid=739.
Mar 09, 2020 | BIC Magazine | Lori LeBlanc
Mar 06, 2020 | LMOGA
Feb 20, 2020 | LMOGA
Feb 06, 2020 | Lori LeBlanc