The HSLA has been busy since our last update -

June –
- Caddo Commission Workshop and Commission Meeting on Protective Ordinances
- Support Legislative effort to pass Natural Gas Vehicle Credits for Conversion
of Vehicles to Compressed Natural Gas (CNG) and building of CNG filling stations.


July –
- Public Hearing on Caddo Commission Protective Ordinance
- Pre-Hearing Conferences looking at Unitization Proposals
- Review Unitization Proposals
- Negotiations with Lessees on Eastern edge (Webster and Bienville)
and other portions of the Play.

LEGISLATION:

GREAT NEWS!! A BIG "THANK YOU!" goes out to those of you who signed the Smith-Gautreaux Petition.

The Legislation that the HSLA supported for the authorization of Louisiana Tax Credits PASSED in both the House and Senate in the last week of the Legislative Session!!! Those measures passed with large majorities and were sent to Governor Jindal for signature. Even though these bills authorize Tax Credits, which will potentially increase the budget deficit in early years, the Legislature believes that eventually, the State’s revenues from stimulation of Natural Gas development will increase in the way of new severance taxes.

Likewise, as the drilling and development of Natural Gas reserves in Louisiana increases, tax revenues from new income to royalty holders and from employment in the development industries will increase. Louisiana stands to be a leader in the development of Natural Gas as a transportation fuel for the United States. This is a HUGE VICTORY in the battle to wean the US from imported Crude Oil! Again - THANK YOU to all that lent their support and voice to this legislation.

Now it is Congress' turn.

At the Federal level, Congress is now working on numerous proposals which will affect Natural Gas. The new “Cap and Trade” legislation which has passed the House may encourage the use of Natural Gas on a temporary basis; however, it appears that the additional costs will have a negative impact on industry and the economy as a whole, making it harder to develop and more expensive to buy hydrocarbons.

Legislation just proposed by a group led by Sen. Orrin Hatch of Utah appears to be the best legislation for the Natural Gas industry. Here’s a brief quote from Fort Worth Business Press, July 8, 2009 (By: Robert Francis):

The New Alternative Transportation to Give Americans Solutions (NAT GAS) Act (SB 1408) was introduced by Sen. Robert Menendez, D-N.J., and co-sponsored by U.S. Senate Majority Leader Harry Reid, D-Nev., and Sen. Orrin Hatch, R-Utah.

The legislation would extend the existing natural gas fuel, vehicle and infrastructure tax credits by 10 years, and augment them to further encourage the purchase and use of natural gas vehicles and the installation of more fueling stations. Specifically, the bill would provide a credit for 80 percent of the incremental price for the purchase of natural gas-only vehicles and 50 percent of the incremental price for the purchase of vehicles that can run on either natural gas or gasoline.

“Already, natural gas is being used in fleet vehicles from dump trucks to transit buses,” said Richard Kolodziej, president of NGVAmerica, a Washington, D.C.-based trade organization. “This legislation will make buying and using of natural gas vehicles more economically attractive. More natural gas vehicles on America’s roads means less imported oil, less urban pollution and less greenhouse gases.”

T. Boone Pickens said he supports the use of natural gas as a fuel for natural security reasons, as well as the environment.

“For too long, our dependence on foreign oil has been one of the factors influencing our foreign policy and if we can eliminate that issue by using our own domestic natural gas resources I am confident that it will benefit our national security, our economy and the environment,” he said.

Watch this legislation closely as an alternative to the currently proposed “Cap and Trade” model.

NATURAL GAS VEHICLES:

A huge announcement was made by Louisiana Gov. Bobby Jindal on June 17th. A new American Car Company, V-Vehicle Company, a San Diego, CA company, has selected Monroe, Louisiana as its site for manufacturing of a truly new American car, designed in and built in America.

T. Boone Pickens, one of the investors in V-Vehicle, says the future production of the company will include NGVs.

With the Louisiana credits for NGV development and loans from the Federal system for the construction, transformation of our American fleet to new vehicles will be within our reach in late 2010 and 2011.

MONROE, Louisiana — A startup auto company, V-Vehicle Co., hopes to begin building "environmentally friendly and fuel-efficient" cars within two years at a shuttered General Motors parts plant in northern Louisiana, with financial backing from billionaire Texas oilman T. Boone Pickens and Kleiner Perkins Caufield & Byers, the Silicon Valley venture-capital firm.

Read more here: Governor Bobby Jindal Announces New American Car Company Will Make History in Monroe, Louisiana

ORDINANCES:

HSLA is pleased to report that Caddo Parish is leading the way for the local area by enacting Ordinances which will protect landowners and their property from negative impact from drilling and development of our Natural Gas resources. Shreveport, Bossier Parish, DeSoto Parish and Bossier City are watching what Caddo Parish does and they are crafting their Ordinances along similar lines. Caddo Commissioner's proposed a draft Ordinance as early as February 2009, but delayed its passage until a full study could been made including the public comments at the Conservation Commissioner’s Public Hearing in May and the Caddo Parish Commission’s Public Hearing on July 9th.

Parish Attorney Charles Grubb and contract Attorney Neil Erwin have met with LOGA (Louisiana Oil and Gas Association, an industry group), representatives of the Commissioner of Conservation and the Commission’s own committee on Oil and Gas, numerous times honing the final draft of the protective Ordinance. This ordinance will help reduce nuisances from Oil and Gas development, including the drilling phase and the long-term operational phase, which is likely to include 24/7 compressors for many years into the future.

The Ordinance seeks to avoid the near certain devaluation of property which would otherwise occur if Industry is not given tough standards to follow in limiting Noise, Light, Noxious Odors and other releases and hazards that may reach beyond the specific limits of the drill pad. The Ordinance was referred back to the Commission’s Oil and Gas Committee after the Public Hearing on July 9th. The HSLA has followed this “bell cow” piece of legislation and commented and cooperated along the way. We believe that the Ordinance, when completed, will be the model for Urban development of Oil and Gas resources in Northwest Louisiana.

COMMISSIONER’S ORDER:

The HSLA reported to you earlier on the Proposed Order of the Commissioner of Conservation to regulate Haynesville Shale drilling and operations after the Public Hearing in May. Late in June, the Order was promulgated with an effective date of August 1, 2009. This Order, although a step in the right direction, does NOT protect nearly well enough the value of properties near drilling and production activities. It is also weak in terms of enforcement. There are twelve agents scattered throughout the seven parishes over which the Shale is presently under development.

There are scores of rigs operating now and if the economy improves, there will be many more in operation. The delays in response time, plus the loose and forgiving procedure for citing violations we believe will NOT result in much effective regulation and property values near locations will necessarily decline. This is unfortunate, because industry has flourished in the Barnett Shale - even with tough drilling regulation.

The commitment of the municipalities in the Barnett Shale to protect neighboring property owners and the value of their property has resulted in much better cooperation between Industry partners and the Community. This makes the local Ordinances even more important for our citizens. We should have the same protections for Northwest Louisiana that the Fort Worth area has enjoyed for years.

Here is what you need to do to help us:

A. Write Governor Jindal and encourage him to sign these Tax Credit bills (SB 26 & HB 110) and further encourage him to continue him to support all means to keep Louisiana first in the move to convert our energy supply to Natural Gas.

Here is the Governor’s address:

Governor Bobby Jindal
Louisiana Governor’s Office
P. O. Box 94004
Baton Rouge, LA 70804
Or, click here if you prefer to email Governor Jindal.

B. Sign our Petition to the Caddo Commission and the City Council asking them to pass meaningful Protective Ordinances.

C. Bring your friends and family to the next HSLA Public Meeting this July 30th at 7PM at the American Legion Hall, 5315 South Lakeshore Drive in Shreveport, LA. Encourage them to join the HSLA Herd - and sign our Meeting Petition.

LEASING STATUS:

We are seeing more evidence of interest in the area of the play over in South Webster and South Bienville. Seismic Surveys were run back in the Spring and several companies are active in leasing in that area. This is the newest area of interest. Many areas that have been previously “picked over” (especially Northwest Shreveport) are getting repeated solicitations. Twin Cities has been diligent in picking off many landowners - one by one. We are in frequent contact with Twin Cities' head landman, Brian Fleming, with regard to our leases; but he knows we are holding steady until the protections are established by Ordinance or Agreement.

If you have been approached, let us know. Emailing is one of the best ways to reach us. Remember, your part in the Herd is to let us know what you are hearing. We cannot be in all places at one time. We have agreed to protect you and make sure you have a proper lease for your rights. This requires interaction with the companies once we receive their contact information, so give us notice of any approach to you by a company or its agents where your rights may be affected. Remember, these companies have no way of knowing that you are represented by the HSLA unless you let them know.

Unitization:

Proposals for formation of Production Units are frequent now. In most cases we are in favor of this move on the part of the Oil and Gas companies. The letters may refer to “Forced Pooling” which is a consequence of Unit formation. This is not bad, but is protective of your right to receive benefits from production in your section. It also may indicate special interest of the company in drilling your area.

However, some units create bad precedent or bad Units with consequences, which we do not believe will benefit our Members. As an example, the Units proposed by EnCana in 18-14-33 and 18-14-28. Those situations and units like them, we will oppose. Therefore, you need to let us know as soon as you get the first letter regarding Unit formation. Usually there is a date proposed for a pre-hearing conference that requires that we respond within ten days if we want a local meeting. We need to know ASAP to meet that deadline if we want to oppose the Unit plan. This requires each and every Herd member to be alert and prepared to keep HSLA leadership apprised of his situation.

SUMMARY:

HSLA staff is pleased to see new interest in leases and drilling even though the price of Natural Gas is still depressed. This can be a blessing as the differential between fueling a vehicle with refined crude products and CNG makes CNG a better choice. That difference we trust will encourage the prompt conversion to CNG as a transportation fuel.

When this new demand has its effect, we here in Northwest Louisiana will reap huge benefits from supplying a share of the national transportation sector worth hundreds of billions of dollars per year. Natural Gas is the only immediate energy source with the potential to replace foreign crude as the primary transportation fuel for America.

We want to do all we can do to promote our resource and take advantage of this huge blessing. Help the HSLA help you by joining with us and our efforts to continually inform, educate and promote the transition to Natural Gas - TODAY.

The next HSLA Meeting -

The next HSLA Public Meeting will be scheduled for July 30, 7PM (Downstairs) at the American Legion Hall located at 5315 South Lakeshore Drive in Shreveport, LA‎. (318) 635-8186. We hope to see you there!

Closing -

If you haven't joined the HSLA, right now is a great time to join the Herd. We have never stopped holding meetings to educate our friends and neighbors about better leasing in the Haynesville Shale. We also have not stopped informing or helping members get their important mineral rights questions answered nor have we stopped working to get the best lease we can - for the best price. Our mission, purpose and goals remain the same - since day one.

The Difference -

Do you know what the difference is between the landowner who gets $10,000.00 per acre and the guy who only got $400.00? The only difference is information! So get informed today. Don't let a lack of information result in a poor negotiation for your own land.

Until next time - we'll see you in the shale.

Sincerely,
HSLA Staff

(HSLA Staff Attorney) Mailing Address:
4300 Youree Drive, Suite 315
Shreveport, LA 71105

Go HSLA!