State cashes in on natural gas deposit

BATON ROUGE, La. — The Louisiana Mineral Board collected $43.5 million at its October lease sale for petroleum rights to state and local government property with a major natural gas prospect in northwestern Louisiana again fueling most of the interest.
The board, which normally holds a monthly sale, had canceled its September sale because of Hurricane Gustav. That resulted in 347 tracts being put up for bid this month, the most handled in a month since 1947.
The gas prospect, known as the Haynesville Shale, has skyrocketed sale prices in recent months. Prior to June, when interest in Haynesville leases began, the highest lease sale collection in the past 10 years had been $17.9 million in 1998.
In August, the Mineral Board collected $93.8 million — the second largest sale in state history — with $92.2 million coming from Haynesville tracts.
The Haynesville Shale is a formation that lies in parts of Texas, Oklahoma and Lou-isiana. Researchers say it could eventually produce 29 to 39 trillion cubic feet of natural gas, making it one of the largest U.S. gas finds ever.
The sale covers only the rights to drill and state and local governments will collect taxes once production begins.