Haynesville Shale lease pace worries
by Jeff Ferrell
SHREVEPORT, LA (KSLA) - In our continuing coverage of the Haynesville Shale, some compare the potential for trillions of dollars in natural gas under Northwest Louisiana to a giant buffet, Where you can't eat everything at once. But, some fear the lease market is slowing down.
Experts say, the short answer to that question is 'no,' the lease market is not slowing down. But, if we extend that metaphor of the Haynesville Shale as a buffet, you might say that gas companies are filling-up their first plates. The nice thing about this buffet: It stays open for years and it's all-you-can-eat.
Even with multi-billion dollar companies now involved in the Haynesville Shale play, there's only so much money they can spend at any given time to reach all that natural gas two miles underground. Clay Baskin serves as Director of Community Affairs with Twin Cities Development. It's a leasing agent for Chesapeake Energy. Baskin told us, "our efforts are consolidated in particular areas because we don't have the human resources it takes to lease everyone at the same time."
So, leasing companies like Twin Cities must take it one step at a time. Baskin continued, "we don't want to lease everybody up all at the exact same time because then it would be hard for us to actually complete our obligation on the leasing end."
KSLA News 12 is told that the market price of natural gas also drives the lease market. Lease terms with the Haynesville Shale have generally been shorter than other areas of the country. "So, when you're talking about a three-year lease term, you want to start that clock when you hopefully can make the most economic wells," explained Joan Dunlap with Petrohawk Energy Corporation.
Dunlap told us that a slightly slower market pace allows the public to make better decisions with less pressure. "It helps local people deal with their local governments. It helps ordinances be written in a controlled way." That time can ease concerns, like those we reported on this week, about the vast amounts of water used in drilling and establishing a gas well.
So, the message for property owners who feel they missed their so-called 'window of opportunity' for the best mineral lease deal: "I tell everybody the gas has been there a really long time and it's not going anywhere. So, I don't really think that there's such a thing as a window," advised Dunlap.
Even if there is a window of opportunity, Dunlap and others expect it to stay open for years. In fact, Baskin concluded, "be patient! We'll be there. We'll be there as long as you're in Shreveport or Bossier City and as long as we're leasing in those particular areas, we'll be there."
Just to give you a sense of scale when it comes to the Haynesville Shale, Twin Cities Development has now leased 15-thousand acres in Caddo and Bossier Parishes. By comparison, the total size of their area is 178-thousand acres. They'll likely be busy for awhile, unless of course the price of natural gas falls drastically, then all bets are off.