Another "golden egg" laying goose is dead?
As we have seen, the Marcellus shale drilling success has lead to an over-supply of natural gas and a depressed price.
The driller's answer was - go to the wet gas Utica areas to capitalize on the higher value of natural gas liquids mainly ethane. Now this success has lead to an over-supply of ethane and the price of ethane is now less than the equivalent methane. The ethane cannot be left in the gas going into the pipeline because it contains more BTUs than methane (1070 vs approx 1025) and that would raise the value too close to the limit pipelines allow - 1100 BTU.
The answer may be to shut-in some Utica wells and return to the dry gas areas, but wait there is an over-supply of gas. What's needed is more useage, but that is going to take time and even then there's such an over-supply that prices are not going to change much for a long time.
The drillers are between a rock and a hard place.
Here are a couple of articles from Platts.
http://www.platts.com/RSSFeedDetailedNews/RSSFeed/Petrochemicals/60...
http://www.platts.com/RSSFeedDetailedNews/RSSFeed/NaturalGas/6987988
Views: 17201
Replies to This Discussion
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Permalink Reply by Bluflame on
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Hi Kathleen,
Ironically, my leased O&G property is re-claimed coal strip mine land. Originally, it was densely wooded rolling hills. Post strip-mining, it is devoid of trees and vaguely reminiscent of Montana rolling hills. Only useful as cattle grazing land, and only then after significant remediation.
Give me well pads any day of the week!
BluFlame
BluFlame
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Permalink Reply by 2z248p19vqnh9 on
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HERE is an honest landowner sharing her story...thank you, Kathleen.
as one light lights another, nor grows less - so nobleness enkindles nobleness.
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Hi All
The problem with commercial sized wind/solar electricity generating plants is we lack massive electricity storage(MES) needed to provide 24/7 reliability-so we need back up natural gas fired power plants for when the wind doesn’t blow and the sun doesn’t shine-also pls note the carbon tax discussion in the below link
http://www.technologyreview.com/review/428900/king-natural-gas/
The chart in Figure 6 on page 8 in the below link shows the relative costs for different types of power plants and we all want to minimize our monthly electricity bills and new natural gas is the best value
http://www.brookings.edu/~/media/research/files/papers/2012/6/13%20...
Thx a lot
JFN+13
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Here's the thing...the gas (dry, wet, or otherwise _ oil) is already in the BEST place (storage wise) it could possibly be - IN THE GROUND! Think about that...it's already in it's 'self-contained/created STORAGE area.
Now - HERE's the 'next thing'...IF you are a LANDOWNER - either by 'self inflicted choice' (YES - I'm being seriously funny here!) -OR- by 'inheritance'...however, whatever, whyever...basically - YOU OWN LAND, be it 1 acre, 10 acre, 100 acre, or 1,000 acre +/-...basically - you 'own the thing', your very own 'hole in the ground'. GOOD for you! One must pay for it - or at least pay taxes on it +. IT'S YOURS!
Have you ever heard the phrase "It's up to the 'man' to 'try'...the 'woman' to 'deny'."? This was said to us gals in high school by a wise sage of a gentleman who 1st - was a 'MAN' & 2nd had 'been around the block'...basically he KNEW how very straightforward & simple it is...no more, no less.
Where am I going with this? -you may be asking? Well, as I read through the various things & 'worry' about things myself - I finally came up with this concerning the 'give/take' of 'land lease deals' and such...it's VERY SIMILAR to a 'relationship' between a 'man' & 'woman' in the 'game of courtship'...but HERE it's just a little bit different:
IT'S UP TO THE 'LANDMAN'-or-'PIPELINEMAN' to TRY & up to the LANDOWNER to 'deny'...UNTIL - it's 'good, the very best' for the LANDOWNER! BECAUSE -it really IS 'like a 'COURTSHIP' that ends up in a 'MARRIAGE'...and after the 'paper's dirty' - you've 'put your John Hancock on the dotted line'...that's it! Pretty good analogy, eh? Somewhat comical!...but REALLY - *IF LANDOWNER's would REALLY 'value' what they've got - THEY'VE 'got the goods' that others are 'after' (like I said - like a 'courtship'!). NOW one can 'lighten up a bit' and start to HAVE SOME FUN with things! Seriously, take a deep breath, let it all out - and HAVE SOME FUN! BEGIN to 'mentally have FUN with this & that will 'take a load off' your heart. ***YOU hold the KEYS to YOUR KINGDOM!!!
The LAND is YOURS and everything on & under it...and YOU 'call the shots'. It's a little like 'dating'.... *When you go on a date - you want to 'get to know' someone before you just up & 'marry them & start to have children or buy a house or start a business - RIGHT? Keep your skirt on! YOU are 'in the driver's seat' here! ALL that 'they want' (whomever 'they' are...) is WHAT YOU'VE GOT! *Read through some of the things that SAM DOUGLASS has to say - wise man! He's been around & has seen things & knows things that you probably haven't...THAT is the kind of man you want for good advice! (At this time: I have only spoken with him once, but know from the advice he gave & what I read that he WRITES - that he is quality.)
Let's take Washington, Pa. - did you know that IT was bigger than Pittsburgh was at one time? Imaging that! The National Road goes through there + water/rivers...Pittsburgh was just a 'pipsqueek' town compared to Washington at one time. Then 'history happened'.... We'll 'jump' to 1859 - DRAKE's WELL. He was a 'railroad engineer' (like being a 'pilot' -he had 'free transport' on the trains!) - THAT was one of the reasons the Connecticut boys/investors chose HIM. + He was 'available' for not too much $....SO off he went to where there were 'stories' of the Indians using 'oil' salve - found floating on the water...for 'healing of ALL SORTS of things - from cuts to 'inflamations/stomach illness'...you get the picture! Bingo! OIL/BLACK GOLD...8.27.1859! We're rich!...hey - what do we DO with 'this stinky stuff'?
There were 'land leases' - Coal -Oil Johnny(?), PITHOLE, guys coming off of Civil War needing to 'Make the cash to pay the rent'...then you've got to 'store' this stuff. Then came refining...on & on & on! WHEW!!
Now 'here we are' and EVERYONE'S getting all 'fliberty-digited' -or- 'twitter-pated' (I think that was Thumper in BAMBI?...) - you get my drift here...and rightly so! There's BLACK GOLD/ 'GAS GOLD' in that there ground under your 'soles' (of your shoes, mind you - tread lightly!). Yep - gas was a 'junk' waste product at one point in time! NOW everyone's goin' 'hog wild' over it!
WHOA there, cowboy! Where do you think YOU'RE going? That there's MY land! Isn't it interesting...people showing up from ALL OVER now!!! Whew-WEE! Kinda' takes one's breath away! OK - where were we now?...oh yes - so you OWN land...and 'they' (whomever 'they' are...) want THEIR 'cut of it'. Oh, really, now? Back up there - who do you think YOU are trying that on ME? - or my MOM?? - or my SISTER???...the list can go on & on & on! There's a whole lotta' room here for EVERYONE to be ($$$'silver dollar$$$) HAPPY here, folks - SO, TAKE YOUR TIME! ***YOU DIDN'T GET MARRIED after just 'one or two - or even ten -or TWENTY+ dates, did you?...SO - what's the RUSH? The 'land' isn't going anywhere, is it? And if it is - why would THAT be? You can 'pay your taxes', right? OK. One down. - You either PERSONALLY PICKED/CHOOSE/*signed the MORTGAGE on the 'dotted line (marriage?)' probably BEFORE this 'gas & oil thing' was even bein' tossed about as 'bait' for all you good 'LAND FISHIES'! - RIGHT? SO - RELAX!
How many of you have gone fishing?...I mean REALLY 'gone fishing'? There's 'fishing' (like 'dating' or 'house shopping'...) and THEN 'there's FISHING'! - RIGHT? ...well, SOME fish take more planning, more time to catch...like a MUSKY!...Ever have a fish 'follow in' your lure, but NOT 'bite'. WELL - if you think of YOURSELF like that fish. *YOU are the PRIZE* - DING,DING,DING - BELLS & WHISTLES! YOU are the 'BIG FISH' - the TROPHY! - YOU ARE, that's right...it's YOU! *VALUE YOURSELF!* KNOW WHAT YOU KNOW - KNOW WHAT YOU'VE GOT, and DON'T 'give YOUR milk away, WITHOUT 'them' buying the cow!!! BE THE BALL! ***YOU've GOT what they WANT! **YOU are the JEWEL! *YOU are the PRIZE!
When that 'sweet talkin' 'land dude' swings by talkin' 'cherry pie'...*STOP* LOOK, LISTEN, & LEARN...but 'tread lightly'! Always remember & think to YOURSELF...*WHAT'S IN IT FOR THEM? WHO ARE THEY? - DO YOU REALLY 'KNOW' THIS PERSON? - come on! I, like you, don't have ANY problem with ANYONE tryin' to MAKE A LIVIN', but once you've 'signed on the dotted line' - they aren't going to be there to 'HOLD YOUR HAND! It's off to the bank - off to 'close the next deal/contract'...BE WISE!
REMEMBER: it's up to the 'landman/ pipelineman' to TRY...but up to the LANDOWNER to DENY - until his 'heart is WON' - and everyone says 'I DO!' I hope that I made that pretty simple for people. I was getting 'too worked up' myself - what if this, what if that...THEN I had this thought - HEY, they WANT what YOU'VE GOT! He who has the GOLD makes the RULES...HE who has the LAND 'makes the rules'! There nothing wrong with THAT! Think about it - YOU have maintain & 'held true' to what YOU'VE BELIEVED IN - IT's YOUR LAND!!! 'THEY' have NOTHING to do with THAT - absolutely NOTHING! -to 'them'...YOU are just 'a paycheck'! That's right! Get real - GET SERIOUS. KNOW WHAT YOU KNOW! BE WISE & STICK TIGHT to your 'true grit'! BE STRONG, even when you feel like the world is crumbling beneath your toes.
Hey - when you REALIZE that it's YOU who has 'all the cards in their deck' - YOU have the 'ROYAL FLUSH'!...THEN you can begin to have some REAL FUN! TARA! - LAND, it's the LAND, honey! Enjoy & VALUE what you've worked for! It's VALUABLE - YOU are smart & YOU have value in & of yourself! Don't get flustered, YOU are the 'big fish' that THEY are HOPPING to CATCH 'on their line of 'lure-lore', 'song n' dance'- remember that!
I'm no lawyer. I'm not that smart, BUT I worked the land. i LOVE the land. I have walked it & enjoyed it...and I value what is there to appreciate. I just hope that we ALL can be smart for ourselves. THINK about it...they're sayin' that WE are 'asset rich' in what we have 'beneath our feet'.
What would the American Indians have said? Hey - here's a joke that I just love...
*There's these English who see a spaceship land up on top of a hill. They're all excited. Pretty soon - they see this group of Indians coming down the mountain. The English stop the Indians and tell them about what they just saw. The Indians just say,"Yes, we know. We told them about you. - We told them "Don't trust them - they steal your land." HA-HA-HA! - Isn't that a trip?! I laugh so hard every time I think of that joke that I heard from my Indian friends so long ago - fishing up in Canada!
Think about the Middle East - WOW! They 'handled things', we can to! There's 'black gold', 'gas gold' under our heels, there is! 'Beverly Hillbillies', anyone? - I can live with it! Ha-Ha! - GG
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Permalink Reply by hunter4440 on
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huh? There went 20 minutes of my life I will never get back!
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Permalink Reply by ray schmidt on
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hunter,i feel your pain!
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WHO are 'you guys'? hunter4440 & ray schmidt? - 'o&g'men? - ARE you???...Yes, gas prices ARE LOW - but THAT doesn't have ANYTHING to do with the landOWNER. ALL I was trying to impart is THIS - that YES, the 'product' is already 'stored' in the VERY BEST & SAFEST place that it could be - IN THE GROUND!
WHO 'owns the ground'? PEOPLE - hundreds & thousands of 'LITTLE GUYS' who are only NOW able to 'better understand' WHAT they have RIGHT UNDER THEIR FEET.
I don't think that enough people 'get it' yet - HOW VERY VALUABLE this Marcellus/Utica/Black River Devonnian Shale beds ARE! OK, so 'prices are down'...leave it IN THE GROUND - for a BETTER DAY. HEY - that pretty straightforward & simple logic. I am just happy that there is a site like this to communicate on. *ENERGY & CAPITAL - good place to learn about 'stock plays' in this entire field - there are drillers, pipeline co.'s, refiners, little guys, BIG guys, +.
ALL I was saying is THIS: VALUE WHO YOU ARE & WHAT YOU'VE GOT...because to 'those guys' - all you are is CHUMP CHANGE! THEY'LL 'eat you up & spit you out' - quicker than quick!
Think you got a good lease? Maybe yes (for NOW - at this time', maybe NO (two years down the road...who knows?). BUT people need to 'get it' being THEY need to COME TO A CLEAR UNDERSTANDING that THEY are 'in the driver's seat' with THEIR LAND. These co.'s are really 'pulling the wool' over people's eyes - and that's 'their JOB' - to get the BEST DEAL for themselves. All 'well' & good.
PEOPLE need to be aware of what they've got. There are 'reasons' that this area is now a HOTBED...it IS HOT! SO 'hot' - it's burns!!! Vultures are just circling, happily 'picking off' whomever is willing to 'dance' with them. (DANCE with the DEVIL? - who knows?). I get the feeling with you two guys - that you're SCARED that 'people WILL WAKE UP & smell the coffee'! Is that so?
Let's do some math. Let's take x100 acres. Landowner paid $25,000 for it 20 years ago. Taxes/year - $500 (x20 years = $10,000 TAXES). Land's just 'sitting there' doing nothing. LM (Landman) from co. 'x' comes round in 2003 - offers $1,000 sign up royalty + classic 12.5% royalty agreement. Shallow wells drilled. Makes taxes each year + has some extra change jingling in his pocket. 2013 rolls around - NOW deep wells getting HOT. BUT landowner NOW 'all tied up'. CHUMP CHANGE!
SAME x100 acres (2013). Not signed yet, but LM knockin' on their door. HI, folks - have $3,000/acre + 15% royalty to offer you all! Landowner SIGNs - CHA'CHING $$$. drilled/ royalty checks. WHOPPY DING!...(the G&O guys are STILL tickled pink...THEY got the 'best deal'! STILL). That landowner - he's as 'tickled pink' as a PIG IN MUD'! - everyone's happy. HA-HA. ...people STILL don't 'GET IT' around here...all the world's a stage & we are merely players!
Those Saudi's GOT IT!...they ended up 'playing hard ball' with the 'BIG BOYS'...and GUESS WHAT - they ALL still 'played' & everyone was STILL HAPPY! What I'm really trying to say here is THIS: WHAT is $3/acre? nothing. ...how about $30/acre? sounding better...that would 'pay my taxes' for a couple-a-years'. OK. HOW about $300/acre (HMMM...x100 acres ($30,000 - now THAT is getting better. taxes, 'pays for the property' a few times over...not bad - NOT BAD at all. I can 'work with that!'). NOW , how about $3,000/acre? - NOW we're talkin'! ***$300,000*** WOW - I never thought I'd ever see THAT kind of moola' outta the ground! ...what fools...what fools.
'BLACK GOLD', *'GAS GOLD', ***'GROUND GOLD'...GOLD, I say, **LIQUID GOLD!!! ALL packaged up, nice & tight & tidy - right under the ground that you walk on!...those ARABS 'got it right'! BE AFRAID - BE VERY AFRAID...but also BE HAPPY - BE VERY VERY HAPPY!!! * value what you've got - you've GOT what 'they WANT!...you just don't 'know enough, YET to 'know any better'.
Our economy - sucks! People have forgotten WHAT made America SO GREAT! WAKE UP before you get 'SHAKEN UP'!...when GAS/OIL goes to $5/gallon - what will you do then? When it goes to $10/gallon - how about THEN?...how about $20/gallon? YES. It CAN happen! How about INTEREST PAYMENTS on mortgages?...things are going to get NASTY AGAIN. HERE'S the thing - things 'go in waves'. I've read through some of the 'comments' for this & other pages. SOME people remember & know - even if they were very young then - WHAT happensed. Some families TALKED then & talk NOW of 'then & now' scenarios...it's SCARRY! I'm a PRAGMATIST! -an OPTOMISTIC pragmatist, but a pragmatist, none-the-less.
There's alot to LEARN. ('THEY' don't want people to GET SMART! - it'll cost them TOO MUCH!). It's not 'what you know', but WHAT YOU DON'T KNOW that'll hurt you.
'G&O lawyers around here are STILL 'wet behind the ears' / behind the eight ball...on SOME THINGS YET! SOME lawyers HAVE seen & experienced enough over the course of their lifetime to have a BETTER GRIP on what's happening now...BUT there are still things that 'get missed'! The G&O co.'s have 'BEEN IN THE GAME' - all of their lives - for GENERATIONS! Like these folks 'know farming' - THEY know gas & oil!
THINK ABOUT IT! - let's go BACK to that little scenario I began on the $$$/acre + ROYALTY %. WHAT if you were offered $30,000/acre? - 'drop in the bucket' for these bucks! DO YOU KNOW HOW MUCH THEY are making? DO YOU? YES - you get a 'royalty check' - BUT, is THAT for 'face value' of gas - AT well head? - or WHAT CUTS/experiences are CHINKED out of YOUR 'armour'? YOU GET what *THEY GIVE YOU! HA-HA...joke's on WHO here?...they are as SLICK as that OIL that comes outta YOUR GROUND! - and they are as SLIPPERY as a little GREASED PIG - squealing ALL THE WAY to THEIR BANK (CHA'CHING!!!$$$). THEY are happy little campers right now - crying 'oh, boo-hoo...i can't make enough money, boo-hoo'. YET they keep drilling, signing leases, making it SEEM LIKE things are tight, BUT they just keep going strong! ***Why do you think there's all these 'young bucks' from Idaho, Montana, Wyoming - I can go on & on & on...WHY ARE THEY HERE? - FOLLOW THE MONEY!!!
YOU have GOLD (black gOLD, gas gOLD...) flowin' through YOUR VEINS...WAKE UP! If the Arabs did as well as THEY did with everything - and THEY didn't have INTERNET...they just GOT SMART - and HARDNOSED...and said to the 'seven sisters'...you wanna' dance? OK - here's MY 'tune! Now DANCE - or GET OUT!...guess what? - they DANCED! (and the Arabs are STILL DANCING - all the way to THEIR BANK!!!) *GET SMART, PEOPLE - WAKE UP!!! LOVE the smell of 'gas in the morning' WITH a good 'cup of Joe'! *Coffee beans & *oil...love it!
Check out 'ENERGY & CAPITAL'...love that internet! God bless everyone in this! Mat you all be WISE & get RICH doing it! *As one light lights another, nor grows less - so nobleness enkindles nobleness. Who is John Gualt? YOU are JG - IF you endeavor to be so. Shakleton did it! - you can too (and not have to freeze!) ENDEAVOR! 'IF'!
Am I feeling 'YOUR PAIN'? 'feel it at the well head' - meet you at 7!
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Your writing style makes baby Jesus cry.
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Spat coffee out on that one. Well done.
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glad to hear the drillers are between "rocks".. they fracked themselves; their over-powering greed fracked their great plans to take over the Planet and suck it dry and live happily ever after and wipe out 1/2 the world with weakened immune systems, additional illnesses, periodic explosions, etc...
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