Ngas at $2 will be “catastrophic for Chesapeake and others" and  “Plus the bonus money will suck in New York State

Granted this gas game steals human energy – its big capital for many, am I rich or poor or am I ruining my land, who do I believe. Plus it is taking a lot of time for the gut of it to reveal or “when will I know”. So we are less than our best selves.^&*

Sermonizing here, but I think we should accept that facts are limited and only high grade researched subject matter should be actually utilized if making significant decisions.

“'gas at $2 will be catastrophic for Chesapeake and others" Well at least here, it creates topics that we enjoy thinking through.

Statement is false. If gas stays around 2 for a long time, CHK will go chapter 11 or force a sale.

Even those outcomes would likely be good, other than for CHK equity owners. (they know they take great risk, right?) Chapter 11 would mean liquidation and worthy assets would end in the hands of well to do talented operators. = landowners win. A sale would mean different mgmt and 80% odds of a better backdrop for landowners.

“other cos” for non-overleveraged gascos, 2 and under is good, because so much production will dry up, including infrastructure sales, that survivors will be sitting pretty for the inevitable up cycle  - we use record quantity now, remove production, lower supply = higher prices.

PA Marcellus, the Core anyway, is among the lowest cost gas to produce in the US. That is a huge advantage - micro econ 101.

“Plus the bonus money will suck in New   York State”, - comment, if there is value there, bids will be fine.  If other developing shale plays have better economics, NY isn’t attractive to start with. 2) With PA development so huge, if one owns NY minerals, why be anxious to lease, why not bid for more acreage near you and wait out 8 – 12 years and then, in theory, lease into phase II. The rock doesn’t change in 8 yrs let alone 80 million.

Topic for another board, has anyone heard of bids/ interest for the southern tier of New York State? We are having trouble finding interest for NY> .

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Our statement- If New York comes in strong and extensive --  PA leasing, bonus, royalty, differentials will crash.