I hope the word is good , it is good they are being proactive educating the public on their activities.
rsvp Morgan Madden 570-265-6525 ext. 83932 or email at [email protected]
I attended the July 19th Chesapeake meeting for Cherry township as well as the one that they held for Colley Township back in June. Both sessions were similar in that Chesapeake was reaching out to let invitees know what their immediate and near term plans were for the counties. In addition, they left an hour of each session to respond to any questions people might have had. The Chesapeake team making the presentation was primarily from the Towanda office. That office is responsible for Chesapeake activities in 4 counties: Bradford, Susquehanna, Wyoming and Sullivan. Overall, I thought the session was informative and appreciated by members of the audience.
Here is my interpretation of facts discussed at the meeting. Others may have heard differently.
-They indicated that 80% of the decision on where to form a unit and drill is based upon the expected productivity recommendations made by their geologists. 10% weighting is factoring in risk of geological fractures in the substrata and 10% based on surface factors (location of the well to roads, properties etc.
-They said that Chesapeake had drilled only one dry hole in over 600 drilled in the 4 counties. This occurred in Wyoming county.
-The unit shape is typically rectangular heading from the northwest towards the southeast. There was a good map of the Sullivan County unit designs in in the July 18th Sullivan Review, and if one takes a few minutes to understand the legends in the map they can learn a great deal about Chesapeake's planned activity.
-They spent a great amount of time explaining how "units" were determined (most early leases have the '640 acre per unit' (they said roughly 3000 ft in width and 7,000 ft in length and how they actually set the well pad within the unit. They mentioned that due to technology improvements they can horizontally drill much longer distances (up to 10,000 feet in length) enabling them to drill fewer wells. They said it was more efficient and stressed the environmental advantage of drilling fewer wells as this would leave fewer ares of disturbed land and reduce the potential for wellhead accidents, etc. Some folks commented on the fact that larger wells diluted the percentage of the unit for individuals within the unit. Chesapeake officials said that they would expect the productivity (amount of gas to come out of that well would increase proportionately so the diluting effect would be debatable).
They said that if your property is within a unit, even if they do not drill under your property, the percentage you receive is based upon your share of the entire unit.
-Also, they said they can place up up to 6 wells on one well pad if they feel it would be productive to do so. The example they cited was of 3 wells spaced 18 feet apart at the opening which would be drilled in such a way that they would all be one direction moving parallel to each other approximately 1000 feet apart. Another 3 wells on the pad could be drilled in the opposite direction with a similar distance between them.
-It should come as no surprise to anyone that the actual number of Chesapeake drilling rigs is down in the past several months. They are down to 8 rigs from 24 late in 2011. This has been due to:
the low market price of natural gas,
an abundant supply of gas,
their ability to shift equipment to western Pa and Eastern Ohio to drill for the more lucrative "wet" gas.
-They indicated that they were primarily focused on building the infrastructure (pipelines, etc.) to move the gas from the wells that they had drilled. Also, they are drilling on as many properties currently under lease as they can in order to hold the leases beyond the first 5 years by production.
-They also indicated that they were busy trying to re-sign many properties where the first 5 years' lease was about to expire. They mentioned that they may not try to sign everyone and their decision would be based upon the economics at the time.
-They said that in their first 4 years they had drilled 174 wells and that in the first 7 months of 2012 they had already drilled another 162.
- They mentioned that they thought most of their current pipelines under construction should be completed by the end of 2012. They wells would be connected to a main transmission line in Bradford County.
-Other topics included
-steps they take to resolve complaints,
-reporting to the State on production by wellhead,
-property that they had leased in Sullivan County,
-a "rule of thumb" for expected royalties using the example of a 40 acre landowner might and what that person might expect to see over a 20 year period of production ( based upon specific production levels, a specific market price and unit size).
-the timing of royalty payments once a well begins production, where they take their wellhead water for cleansing,
-where to get information on unit filings, etc.
I am sure that I missed some of the presentation in this reply but if others were there, they should be able to fill you in about what they heard.
Thanks, John. It sounds like this was a good community outreach for Chesapeake, but nothing unexpected. I wish Chief would do the same.
I got a invite to a meeting they had for Albany township a few months ago at the HS in Towanda. The only thing I learned was the wells in Albany were producing more than most wells in Bradford county. I hope the wells in cherry twp show the same results.
I stopped in the Chesapeake office this week. I gave them my parcel number and within 15 minutes a lady named Doreen met with me and showed me a map of what was planned in the area around my farm. She was very helpful and answered all my questions.