Given the costs and challenges of the 30,000 psi equipment for Lafitte, it appears to me that FCX may be making the right business decision (but what do I know). In effect FCX is also saying that they have lots of prospects, including those on shore, and why should they continue this phase of the science project (to use Larry's term).
Those are the risks of a royalty trust. Forget Calico Jack (for now). TISDZ is still worth more than half a buck per unit for the BBE and BBW prospects imho.
On the plus side, from the same report
The Blackbeard West No. 1 well was drilled to a total depth of 32,997 feet in October 2008 and logs below 30,067 feet indicated potential hydrocarbon bearing zones measuring 220 net feet requiring further evaluation. The well has been temporarily abandoned while MMR evaluates whether to drill deeper or complete the well to test the existing zones. MMR's lease rights to the Blackbeard West Unit (including Blackbeard West No. 1) are currently held by activities associated with Blackbeard West No. 2 (discussed below) while its evaluation of Blackbeard West No. 1 continues.
"The Blackbeard West No. 2 ultra-deep exploration well on Ship Shoal Block 188 was drilled to a total depth of 25,584 feet in January 2013. Through logs and core data, MMR has identified three potential hydrocarbon-bearing Miocene sand sections between approximately 20,800 and 24,000 feet. Initial completion efforts are expected to focus on the development of approximately 50 net feet of laminated sands in the Middle Miocene located at approximately 24,000 feet. Additional development opportunities in the well bore include approximately 80 net feet of potential low-resistivity pay at approximately 22,400 feet and an approximate 75 foot gross section at approximately 20,900 feet. Pressure and temperature data indicate that a completion at these depths could utilize conventional equipment and technology."
"The Blackbeard East ultra-deep exploration by-pass well, which is located on South Timbalier Block 144 in 80 feet of water, was drilled to a total depth of 33,318 feet in January 2012. Exploration results from the well indicate the presence of hydrocarbons below the salt weld in geologic formations including Upper/Middle Miocene, Frio, Vicksburg, and Sparta carbonate. MMR's lease rights to South Timbalier Block 144 were scheduled to expire on August 17, 2012. Prior to the expiration, MMR submitted an application for Suspension of Production (SOP) to the
I read the 10-Q, still trying to wrap my brain around it.
Alan Greenspan was about as easy to decode.
As best I can decode it they are saying: Some objectives have been hit, some haven't. There is lots and lots of gas down there but we have no clue how to complete these wells. If we can produce any gas the trust will get at about $0.03+ out of every dollar earned, maybe. You have paid your money and bought your ticket so win, lose or draw the rest of the show is free.
Per the 10-Q: "The Lafitte ultra-deep exploration well, which is located on Eugene Island Block 223 in 140 feet of water, was drilled to a total depth of 34,162 feet in March 2012. Exploration results from the well indicate the presence of hydrocarbons below the salt weld in geologic formations including Middle/Lower Miocene, Frio, Upper Eocene, and Sparta carbonate. MMR's lease rights to Eugene Island Block 223 were scheduled to expire on October 8, 2012. Prior to the lease expiration, MMR submitted its initial development plans to complete and test the Jackson/Yegua sands in the upper Eocene for Lafitte to the BSEE. This completion would have required the development of 30,000 psi equipment and the design development and procurement of such equipment would require an extended period of time leading up to the initiation of completion activities. For business reasons, in June 2013 MMR withdrew its Suspension of Production application requesting no further action from BSEE. As a result, MMR's interest in the Lafitte well and related leases effectively expired."
On the plus side, there's better news on Blackbeard East. Read the Q yourselves for the current picture on other leases too.
The 10Q also states that "leases acquired prior to Dec. 5, 2017 on the same lease blocks of Lafitte and Morgan will be part of the subject royalty interests. Over on the Investor VIllage board, a poster indicated additional leases were recently acquired by FCX on the Lafitte lease block. Does anyone have any additional info on these recent leases on the Lafitte? Maybe all is not lost on this lease block.