LOGA Industry Report - Fall 2008 - (Page 9)

PRESIDENT’S PERSPECTIVE Jodee Niswanger Joins LOGA Opens Shreveport Office By now just about everyone has heard about the natural gas boom in Northwest Louisiana called the Haynesville Shale. In response to the rapid growth in activity and projected future growth, LOGA has opened an ofﬁce in Shreveport. LOGA’s ofﬁce will be located in the Beck Building, 400 Travis Street, Suite 1612. Jodee Niswanger has joined LOGA’s team to head up the Shreveport Ofﬁce. She graduated with her Bachelor of Arts degree from LSU and then went on to Tulane to complete her Juris Doctor degree in 2004. Jodee played a fundamental role in Governor Jindal’s transition team as the economic growth policy director and worked very closely with Ray Lasseigne and Steve Jordan during the transition process. After Don Briggs the transition process, Jodee handled the governor’s President, LOGA ofﬁce policy for all issues within the Departments of Natural Resources, Environmental Quality, Wildlife and Fisheries and Agriculture. Jodee recently moved to Shreveport because her ﬁancé is entering his ﬁrst year of residency at medical school. Jodee will be LOGA’s lead on all issues relating to the Haynesville Shale, and we all are very excited about having her on board. The Haynesville Shale Boom! In Shreveport and Northwest Louisiana, the talk of the town is money. Less than a year ago, companies were paying $150 per acre lease bonuses with 1/6th royalty, and now rumors are ﬂying around about $25,000 bonuses and 1/4th royalties. I receive calls every day asking, “Will they be drilling in my area?” as citizens across the state try to get their Jodee Niswanger piece of the shale. Of course, not everyone is going to become independently Director of North Louisiana wealthy or have huge bonuses and royalties. I believe that if the trend continues, the signiﬁcant dollars invested in Northwest Louisiana will raise the quality of life for every person in the region. Just look at Fort Worth, North Central Arkansas and Oklahoma – areas widely considered “recession proof” now that signiﬁcant natural gas discoveries have been made there. Unfortunately, what is making some people extremely happy is angering and frustrating others. Recently in Northwest Louisiana there have been groups and coalitions considering ﬁling lawsuits against natural gas and exploration companies because people feel like they have been cheated. Their explanation is that, because they signed a lease previously for substantially less money than they would have received today, the gas companies should be forced to compensate them for their “losses.” Lease values are largely based on speculation and current market conditions. Assuming the Haynesville Shale is not completely uniform, some owners who received $10,000 per acre in lease bonus payments may only receive modest royalties — if a well is drilled at all. Conversely, some of the $150 per acre lessors may be in the “sweet spot” of the play and receive millions of dollars in well revenue, even at lower royalty shares. Although lease values seem to be escalating with no end in sight, it would take just one dry hole to condemn a large area and lease values in that vicinity could drop like a stone. As groups of disgruntled citizens organize to ﬁle class action lawsuits, claiming that the companies have cheated, misled and taken advantage of them, they should keep in mind their lease bonus payment amount was based on the market price at the time. They can also rest assured that if a company drills their leased property and does not ﬁnd commercial amounts of natural gas, they will not be asked to return their lease bonus payments to the company. The boom that is taking place in North Louisiana is beneﬁtting everyone in the area; we’ve just begun to see the positive impact companies will have on our communities. There is the obvious beneﬁt of the bonuses and royalties, but the bigger beneﬁt is what else is happening in the region. Parish and city governments will receive record tax dollars, and an industry supported tax package will raise the parish tax allocation by $2 million. There is so much positive activity going on, and it couldn’t happen at a better time. Most of the country is struggling with gasoline prices and an economic slowdown, and we are blessed with possibly the largest natural gas ﬁnd in the history of our country. We need to take advantage of this opportunity. We should expect and hold accountable the companies that are exploring and producing in Northwest Louisiana, but we should not be trying to take advantage of them. Let’s do what we can to support production of the Haynesville Shale; doing so will beneﬁt us all. IMPORTANT DATES TO REMEMBER October 8, 2008 MMS Lease Sale Opening Bids: 8:30am October 20, 2008 Louisiana Energy Golf Classic Le Triomphe Broussard, LA October 21-22, 2008 Gulf Coast Prospect Expo Cajundome Convention Center Lafayette, LA www.GCPEonline.com October 28-30, 2008 Clean Gulf 2008 Conference and Exhibition Henry B Gonzalez Convention Center San Antonio, TX November 4-6, 2008 Oilﬁeld Service Auction live online auction www.LOGA.la November 12, 2008 MMS Lease Sale Opening Bids 8:30am December 10, 2008 MMS Lease Sale Opening Bids: 8:30am March 26-28, 2009 Annual Meeting The Grand Hotel Point Clear, AL Please visit www.loga.la for more info on these events www.loga.la | 9 http://www.GCPEonline.com http://www.loga.la http://www.loga.la http://www.loga.la

Table of Contents Feed for the Digital Edition of LOGA Industry Report - Fall 2008

LOGA Industry Report - Fall 2008 Contents Chairman's Corner President's Perspective Commissioner's Comments From the Pipeline... Supreme Court Upholds Act 312 LOGA Challenges Commission's Ad Valorem Tax Rules The Haynesville Shale - Waiting for the Gas to Come In 2008 Legislative Recap Gulf Coast Prospect Expo 2008 2nd Annual LAGCOE Open Golf Tournament Conservationist by Trade Katrina Relief Fund Update DNR Intent Natural Gas Production Surges: A Free Market At Work IPAA Washington Report Legal Updates New Members Index to Advertisers

LOGA Industry Report - Fall 2008

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