The Louisiana Mineral Board's November lease sale was less than spectacular last week, indicating that the hype surrounding the Haynesville Shale area may be quieting as the rest of the state battles to hold its ground. But Mineral Board Secretary Marjorie McKeithen says there’s a reasonable explanation. Statewide, 38 out of 100 nominated tracts received bids at the monthly meeting, which equates to inaction on 62 percent of the state’s nominated tracts.

While it might sound low, McKeithen says it’s on par with what the state was experiencing prior to the boom in north Louisiana, where the Haynesville Shale has turned next-door neighbors into millionaires. “It’s common practice in the oil and gas industry for exploration companies to nominate more tracts than they actually intend to bid on in order to camouflage their prospects in a competitive environment,” McKeithen says.

In all, the state Mineral Board collected roughly $3.5 million at the November sale, of which very little came from offshore lease activity. There was only one successful tract – a 1,120-acre lease in Lafourche Parish that went to Maritech Timbalier Bay for $308,000. There were also 91 onshore leases awarded for a total of $2.7 million.

Department of Natural Resources Secretary Scott Angelle says interest in leasing Louisiana mineral rights for energy production is still strong, though spending on leases in the Haynesville Shale natural gas area has slowed as companies prepare to develop what they’ve already leased.

The major Haynesville Shale buys occurred between June and October of this year, with each month accounting for all-time state highs ranging from about $35 million to $93 million. For the three years prior to that spike, the average individual lease sale was roughly $3 million – only 14 monthly lease sale collections out of 36 between June 2005 and May 2008 exceeded that amount.

That means the November lease sale is still noteworthy, as it takes its place among the top third of sales from the past three years, even though oil and gas prices have continued to fall in recent months. “Even with the economic concerns facing the country and prices for oil and gas coming down from the highs we saw earlier this year, the energy industry is still showing a strong commitment to developing the natural resources of the state of Louisiana,” says Angelle.

Closer study of the data from the November sale shows that leasing activity in areas outside the Haynesville Shale zone closely tracks typical lease sale history from recent years. In a typical lease sale, excluding the recent run in the Haynesville Shale area, about two-thirds of nominated tracts do not receive bids.