Sunday, August 03, 2008

Gas leasing leaves some landowners in Ark-La-Tex area wishing they had known more about it

More than a century ago, land agents bought mineral rights in Central Appalachia for 50 cents or less an acre from landowners who had no idea their land was underlain by coal seams worth millions of dollars. In some ways, not much has changed. With natural-gas prices skyrocketing and new technology available to drill deep, dense shale formations, land agents in many states have snapped up mineral rights at prices that have proved to be bargains. We wonder what would have happened if news media in the rural areas being leased had been on top of the situation.

We noted this phenomenon almost four months ago in leasing of the Marcellus Shale in Pennsylvania and West Virginia. The latest gas play to get major notice is in the area around Shreveport, La., where leasing of the Haynesville Shale "could be this century's gold rush — or a fool's gold of hype," Vickie Welborn writes in the Shreveport Times.

The play has gained national notice, most recently in the Los Angeles Times, which ran this map and where Miguel Bustillo wrote, "Freelance landmen are coaxing naive landowners into signing away gas rights for small amounts and are then selling the contracts at huge profit. [Shreveport Councilman Michael] Long said he was outraged to hear the story of a man who turned to his preacher, a landman, for advice and ended up signing with him for $200 an acre when bonuses were going for thousands. ... Firms that earlier this year were leasing land for $200 an acre are now paying upward of $20,000 an acre."

In the Shreveport paper today, columnist Teddy Allen offers ideas for how DeSoto Parish, south of Shreveport, could use the $28.7 million windfall it will get from Haynesville Shale leases, and he complains about a recent New York Times story "in which we were depicted as suddenly rich hillbillies trading in junk cars for new ones and trailer homes for brick housing. That's the northern journalists' definition of hillbilly: someone who gets some money and upgrades." (Read more)

Louisiana Mineral Board Secretary Marjorie McKeithen said, "We are experiencing something akin to a modern day gold rush due to excitement about the Haynesville Shale discovery." For the state Department of Natural Resources Web site about the gas play, click here.


Frances said...

The Haynesville Shale Mineral Rights you own couldn't just be sold on a whim since you might end up getting less for what it's actually worth.

Serge said...

If those people who hurriedly sold their mineral rights did their homework, they might have actually earned a lot more than what they were paid in the first place.