WET UTICA Worth $35k PER ACRE ??

Since the New Production #'s Are Out From The Wet Utica Wells..The Trend Is Showing That The Utica Acerage Is Headed Upwards Of 25k-35k Per Acre! It is being compared to the Eagle Ford In Texas. What Are your Thoughts And Opinions??  Some Texas Leases Were $30k Per Acre!

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0i7okn54zwbdoPermalink Reply by 0i7okn54zwbdo on May 23, 2012 at 4:20am

That seems pretty generous.  Buell Unit produced 13,472 bbl in 198 days.  That's 68 bbl/day.  Assuming $100 bbl oil that's $6,800/day.  At a 15% LOR that's $1,020/day to the landowner.  Dividing that payment by the unit size (177 acres) you get a payment of $5.76/acre per day.

The gas from Buell is 7,694 MCFd.  At $2.15 MCF that's $16,542/day.  LOR is $2,481/day.  Divided by unit acres that's $14.01/day per acre.  So a 30 day month yields $593.01/acre.  That's quite a distance from your numbers.  This equation is pulled from CHK's best well thus far.

Mangun unit is paying $6.48/acre per day.  In a month that's $194.40/acre.  

Look, it's good money, especially since the landowner has no real investment risk.  This is a great thing for the area and I hope the numbers keep getting better.  But let's at least try to be honest about the real value of the play right now.  

Permalink Reply by Bluflame on May 23, 2012 at 6:47am

Marcus,

  The unknown is what portion of the natgas is NGL's. That could have a large positive bearing on the monthly/acre number.

BluFlame

0i7okn54zwbdoPermalink Reply by 0i7okn54zwbdo on May 23, 2012 at 8:34am

Yes, but probably not enough to effectively double the numbers.  NGL's are around $42/bbl, so they'd definitely raise the value, but I question the $1,200/acre per month figure.

Permalink Reply by TheMap on May 22, 2012 at 10:50am

Good news, but I was even happier to see the map of the oil/wet/dry areas.  I am in NW PA and everyone seems to be focused on Ohio and the Marcellus in Eastern PA.  I am sitting right in the middle of the Wet area.  The Utica here is the same depth and thickness as Carroll Co, Ohio - any reason not to think we will have the same volume and quality they are getting ? One company has already been around for a few weeks offering 1,500/15% and finding many takers.   Literally 6 months ago 300 per acre was a good offer in the area.

0i7okn54zwbdoPermalink Reply by 0i7okn54zwbdo on May 22, 2012 at 4:22pm

This isn't a Utica play, it's actually a Point Pleasant play.  So in NW PA the Point Pleasant member isn't as thick as it is in Carroll county.  That may affect the lease prices and production.

Permalink Reply by TheMap on May 22, 2012 at 5:04pm

So in Carroll Cty OH they are going after Point Pleasant ?  I have an offer here and the top of the lease states:  PA WRN UTICA as the project - obviously PA, Warren County,  Utica as the target.  Of course they want all depths in the lease (not going to happen).  I have been looking for any maps/charts/info on this area - most seems to be focused on Ohio or East of us.

0i7okn54zwbdoPermalink Reply by 0i7okn54zwbdo on May 23, 2012 at 4:03am

The Point Pleasant looks like the kitchen that is cooking the hydrocarbons.  They eventually migrate into the Utica shale, which is why drillers are hitting that formation.  If that formation isn't present then there are questions about how good the Utica is.  Again, this is speculative as we haven't seen enough data to make an informed judgement.  

Permalink Reply by Quincy Spitzer on May 22, 2012 at 12:48pm

We are in the very early begining stages of this game. I have good reasons to believe in the future whoever is in the "WET" Utica areas will see $25,000-$35,000 per acre bonus lease money. There are allot of positive game changing and world changing energy plans in the works that will skyrocket values in the WET areas. I believe some areas depending on the geology and production numbers will see land values selling for $70,000+ per acre just like they did out west in the Eagle Ford. We need to get the right energy policys in wait for gas prices to rise.

0i7okn54zwbdoPermalink Reply by 0i7okn54zwbdo on May 22, 2012 at 4:24pm

Based on $30,000/acre to a landowner every well drilled would lose about a million dollars over its lifetime.  That's not economical, even for a company like CHK who seems to hate money.

Permalink Reply by Quincy Spitzer on May 22, 2012 at 4:42pm
Land in Nebraska in the Eagle Ford sold for 87,000 per acre. And we are not comparing the barnett to the Utica, we were comparing the Eagle Ford economics to the future Utica wells etc. If we get a leader that will allow new policys and when NG goes higher the companies will be making more money than ever before on this Utica Play. And we still have a whole other state full of Utica to go after.
0i7okn54zwbdoPermalink Reply by 0i7okn54zwbdo on May 22, 2012 at 4:47pm

The Eagle Ford isn't in Nebraska.  You may be thinking of the Niobrara.  And I'm curious what makes you think nat gas will be going higher anytime soon?  We have storage fields at full capacity.  The supply simply outweighs the demand, and it's not even close.

Permalink Reply by Quincy Spitzer on May 22, 2012 at 5:04pm
Ii was thinking of the Paloma to Marathon deal @ 87,000 per acre in nebraska. And as the infrastructure gets built, and more vehicles and homes switch to NG, and as we export more NG the price will go higher. Look @ sunoco in philadelphia. They have sold to a new co Energy Transfers who is starting a new NGL prodject and who has taken over 2 docs strictly just for exporting NG, Butane, and also a plant for making plastic byproducts.

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