This month’s oil and gas lease sale showed a slight improvement over the record losses suffered in December and January, but there are still signs that the industry is waiting for the national economy to rebound. The state Mineral Board collected more than $604,000 from the leases sold at its February meeting last week, which represents a roughly $200,000 increase from the February 2008 sale. That boost, however, doesn’t amount to much when you consider the average February sale from 2003-07 was $4.6 million.
Offshore leases are likewise still struggling, and last week’s meeting yielded no offshore sales at all. Even during the beginning of the calendar year, which is traditionally slow, the state has always managed to squeak out a few offshore lease sales—17 were moved during the February sales of 2007 and 2008.
Yet there was a silver lining for coastal parishes. The lion’s share of onshore leases awarded during this month’s sale was in South Louisiana, with 14 of the 16 tracts located below Interstate 10. That includes five tracts in Terrebonne Parish and four in Plaquemines Parish. Lafourche, Cameron and Iberville were also on the board, but the activity in Plaquemines Parish—more than 1,000 acres leased—accounted for about two-thirds of the entire sale, including one tract of about 900 acres.
Overall, the state awarded 16 leases last week, covering 1,612 acres. In all, there were 28 nominated tracts for February covering 34,140 acres. In a nutshell, it’s been a tough run. Last month, the Mineral Board collected only $881,000, the weakest January sale on record for at least the past 13 years. The December sale, meanwhile, came in at roughly $1.4 million, representing the lowest year-end sale since 2004.
Nonetheless, the ongoing year has had its perks. More than $192.7 million has been collected during the current fiscal year that ends June 30, one of the best collection years in recent history. It’s all due to an impressive showing in the Haynesville Shale area from June to October. Each monthly sale ranked among the top six collection days on record, bringing in $35 million to $93 million each and every sale.
The Mineral Board’s next meeting is scheduled for March 11. For details or historical lease data, click here.