Comment

Comment by scott jackovitch on January 3, 2011 at 5:27pm

Peter, I'll let you know what I find out.  What about Trinity Energy does anyone know anything about there size or credibility in the horizontal drilling world ? 

Comment by Peter Schueler on January 3, 2011 at 5:20pm

Scott,

I have had discussions with Wellington, located in Greensburg, PA. I initiated the contact back in September and had discussions with Dom Meffe who owns the company. I had a copy of their lease which offered $1300/acre for 5 years and 15% royalty. The front end payment was delayed 120 days. I mentioned some things in the lease that I could not accept such as unlimited unit size that could be formed from non-contiguous lands and some other things that my attorney flagged. Dom is a very genial man and seemed to be flexible about addressing my concerns but he apparently lost interest in my property in Nottigham Twp and I've had no further contact since early November.

I'm guessing that various leasing companies will be very active in your neighborhood based on the Buell #1 chatter. It wouldn't hurt to talk with them to see what they're willing to put in the lease. If Wellington is truly representing a large producer like Trinity they won't need the 120 day delay, more like 30 days to prove clear title.

Good luck, keep us posted.

Comment by scott jackovitch on January 3, 2011 at 4:10pm

Has anyone been contacted by Wellington resources ?  They contacted me about an hour ago .  They said they are leasing for Trinity energy.  I'm looking for some info.  

Comment by scott jackovitch on January 3, 2011 at 4:01pm

Dan ,  the geologist I spoke with  said the Utica shale in Ohio is the thickest under Harrison county.  As far as the well is concerned he said they were going to dogleg out of the vertical hole into the Utica shale. He stated the 7005' horizontal run would start in section 10 and the target location is section 9.  The well would originate on the property that Buell owns the mineral rights to then pass through the wilson property then pass through the Corbin property and finish on State of Ohio property.

Comment by Dan on January 3, 2011 at 3:48pm

MANDATORY KENYON MEETING TOMORROW

 

I just talked to my landman and I was telling him what I knew about the Buell well.  He said that was supposed to stay under wraps for a while, but apparently it's not because he has heard about it from other landowners too.

 

I also told him that I had heard that Wellington now has cash ($2 million) and they are paying on leases.  He said he had not heard that.

 

I asked him if either of those pieces of information could affect lease prices, and he said that the official highest offer is still $1500/15%, but he said he was going to contact his superiors to find out.

 

Then he also said that there is a mandatory meeting for all the Kenyon people tomorrow.  He said he is not sure what is going to be discussed, but said that it is likely the new information on this well and what that means for leases will be on the agenda.

 

My suggestion is that any of you who are in negotiation with Kenyon give your landman a call and ask them if the new Buell well off Hanover Ridge Road is going to affect lease prices now that they have a permit to drill horizontal.  If Kenyon thinks that most of the landowners now know about this well, they are more likely to realize that they need to raise prices now.

Comment by Dan on January 3, 2011 at 3:33pm

Scott, who is the geologist you talked to?  What department is he in?  A couple things that don't match with what you stated are 1) the Utica shale isn't thickest under Harrison county (about 300' compared to over 500' in part of PA) and 2) the state inspector told me that as of a week ago they had only gone down 4700' on that well.  That means that they decided to to horizontal before ever hitting the Utica.  They probably still haven't hit it yet.  Let's figure out which one of us has the right story.

Comment by Dan on January 3, 2011 at 3:24pm

Hey for some reason I quit getting email notifications about new post to this group. Does anyone know why that would be?  Apparently I'm still subscribed, so I don't know what happened.  Did this happen to anyone else?

Comment by scott jackovitch on January 3, 2011 at 12:29pm

I just talked to a state geologist and he confirmed the info on the Buell #1 well.  He also stated the horizontal run will be 7005' in length, making it the longest horizontal permitted in the state of ohio. He stated that the Utica shale is at its thickest point under Harrison county.  He said the test well looked so good they decided  to go horizontal and it looks real promising for our area.

Comment by jerry allen on January 2, 2011 at 9:14pm

Peter,

Great information on the odnr map site you provided!!!

Comment by Peter Schueler on January 2, 2011 at 8:22pm

Scott, Your land will have the same formation as the Buell#1. The Utica is an interval (layer) of shale that underlies all of the eastern Ohio and surrounding states that was deposited about 490-450 million years ago during the Ordovican period when our land was underwater. The thickness of this interval varies over large distances but not in a local area. Here's a description http://en.wikipedia.org/wiki/Ordovician

Also check this Utica isopatch interval map at http://ohiodnr.com/Portals/10/Energy/Utica/Utica_Isopach_RegionalMa... 

It suggests that Harrison County has a 250' to 300' interval of Utica shale. As for the release of information by area drillers you might want to remain skeptical because they may not want to create too much excitement that would increase lease competition.

I have no idea what your or my Harrison County O&G rights are worth. I will be patient and wait for whatever comes from the local activity. Keep in mind that new Marcellus gas production has depressed prices in the Northeast and producers need to manage the development accordingly.

I had the pleasure of staying at a bed & breakfast near Tunkhannock, PA two weeks ago. The owner, who has 20 acres joined the Wyoming County landowners group two years ago and they put together 30,000 acres that was leased to Chesapeake for a front payment of $5750/acre and 20% royalty. Their website and lease document are at http://www.pamarcellusshale.com/Home_Page.html

Happy New Year to you and yours!

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