Today Carrizo Oil & Gas announced that it is entering the Utica Shale Play by way of a Joint Venture with Avista Capital Partners. There are 15,000 acres involved and Carrizo is paying $1,500 per acre for ONLY 10% interest. You do the math. What would the value per acre be for 100% interest?
Carrizo paid $1,500 per acre for 10%. The key here is they paid that for only 10%.
But, if you feel that NW Pa is the majority of these leases, how did Avista acquire the 15,000 acres?
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The JOINT VENTURE paid $1,500 per acre (avg) for 15,000 acres.
The total amount of Royalties PAID to the land owners by the Joint Venture was $22,500,00.
" ...The JV has closed on its first acquisition of 15,000 net acres in eastern Ohio and northwestern Pennsylvania at an average cost of less than $1,500 per acre. Under the terms of the agreement, Carrizo will own an initial 10% interest in the joint venture properties with Avista owning the remaining 90%..."
Carrizo receives 10% of the lease profits
Avista receives 90% of the lease profits
The article did not state how much either party actually paid for their share of the Joint Venture.
Gregory, I agree with your explanation. Do you know what Ohio counties were involved?
Carrizo just bought up some leases here in Trumbull county a couple of weeks ago from cobra leasing. If I had to take a guess it is probably at least 5000 acres mainly in the northern part of county.
This is now more inline with the various other past leases .Here is little bit of Ohio information for information purposes Also here is a little glimpse of the future if the production is as good as it has been in Ohio. One interesting point is although the corporations need to show proof of what the wells are doing even though it makes the land value increase it also causes their stock value to increase which brings in additional investors to contribute to the production phase of the oil wells . In addition when the land values go up per acre ,even if they are required to pay the landowner more this enables them to use their leases for various acquisitions of capital and partners since this acreage has a certain assigned value here is the nice lease website. Hope all goes well for you folks .
Three different articles to enjoy with your morning coffee.
AT informs me that the bottom two links don't work. They must be blocked . My apologies.
Someteresting reading regarding Chesapeake if you have the time.
New info on the Smith-Goshen / Bemont County group. 40,000 acres should = good bargaining power.
Consol issued an operations update today. Notice the number of wells that they are putting on a pad, as well as a few other nuggets of info.