The state’s oil and gas lease sale hit a five-year low last week and brought in only $773,000 for Louisiana’s coffers. It was the lowest April sale on record since 2004 and pales in comparison to the $2.5 million monthly average seen from 2005 to 2008. For those keeping tabs on 2009’s lease sales, it’s just more of the same (see “Look out below!” here).
Practically every month this year has underperformed as the national economy continued to struggle and energy producers sat ever more increasingly on investments they already had. April was also the third straight month that the state was unable to move any of its offshore leases; previously, three tracts were leased in January for $171,000. The only saving grace for the numbers resides in the leases collected fiscal year-to-date, which amounts to $194 million, the largest year-to-date sum in recent memory.
As for what did go on the books for April, there were nine leases awarded covering 760 acres in Cameron, Jefferson and Vermilion parishes, as well as along the Red River. Overall, there were 55 nominated tracts that received no bids whatsoever. That five of the nine tracts awarded this month were in South Louisiana is further proof that the historic gains experienced last summer and fall in north Louisiana’s Haynesville Shale area has unarguably slowed down. But those months have done wonders for the YTD lease figure, a silver lining if there ever was one.—Jeremy Alford
