Oil, gas revenue slowly declining for Vermilion Parish School system

With four months left in the fiscal year, the Vermilion Parish School Board is expected to do OK when it comes to oil and gas revenue on 16 Section Land. But after that, the future may not be as bright.
The School Board is projected to collect around $5 million this fiscal year from oil and gas revenues. The School Board does not budget the money from 16 Section Land because the income is up and down.
The projected $5 million will rank as the fourth best year in collection since 2005-2006. Last year the school board collected $6.5 million which ranks as the second highest in 10 years.
But this past February, a new trend is underway and its a trend that is not a positive one for the school board.
In February, the school board collected $308,000 in oil and gas revenue. Before that, the school board was averaging $500,000 in collections per month.
The $308,000 was the lowest collection in 17 months.
The reason for the decline in monthly collection is simple: the price of oil and gas has been cut in half. When the price of oil and gas goes down, it means less revenue for the school board.
If that news was not bad enough, the school board members received more bad news from its annual mineral activity report.
Jim Veazey of Veazey and Associates, LLC, gave a report to the school board members about the future of oil and gas leases.
Veazey told the board members that oil and gas royalty is on a downward slide, and he predicts it will continue to fall for the next four years.
Veazey predicts by 2019, the school board is expected to collect $2.5 million, which will be the lowest in 15 years and one of the third lowest in 30 years.
The school board is collecting oil and gas revenues from seven fields on 16 Section Land. The range from the Erath area to White Lake area near Gueydan.
Those fields are expected to be active through 2019, Veazey predicted. He also showed a decline in the amount of oil and gas revenues at each field.
Veazey also informed the school board members that no oil companies leased any 16 Section Land in 2014 and thus far, no leases in 2015.