Small properties

What are the thoughts on all of the small properties in Carroll and surrounding counties that are unleased, and surrounded by Chesapeake leases it seems that Chesapeake was not concerned with getting these smaller parcels out in the country when they were leasing heavily, are these properties still valuable or do you have to wait to see if a drilling unit forms around it for them to become valuable the o&f companies?

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Permalink Reply by JK on February 22, 2013 at 4:36pm

Fang,

Thank you for giving strong hope to the smaller owners.

That was so cool.

I believe you are right.

0i7okn54zwbdoPermalink Reply by 0i7okn54zwbdo on February 22, 2013 at 7:21pm

"They will see $10,000 per acre bonus money and 25% royalties."

This is magical thinking.  No company can spend that kind of money and make a reasonable profit long term.  Gulfport paid ~$10,000/acre for some of their position and they're making nothing off of those gushers they drilled.  People need to be realistic about what the value of their property is.  Hoping for a big number is fine, but folks need to understand how acreage is valued and adjust their thinking accordingly.  The market moves fast, so stay with it or prepare to be burned either coming or going.

Permalink Reply by Bluflame on February 23, 2013 at 2:55am

Jay,

  It looks to me like Gulfport's CEO attended "The Aubrey McClendon School of Oil & Gas Personal Profit Opportunities".

BluFlame

0i7okn54zwbdoPermalink Reply by 0i7okn54zwbdo on February 23, 2013 at 5:18am

I was long GPOR in the early fall.  I got out after I made 87%.  Had I stuck around I would have seen it actually double, but no matter.  Yes, God, I'd be short on GPOR if I was the kind of person that engaged in such risk taking.  I'd buy the March 15 put option @ $32.50 instead of shorting.

0i7okn54zwbdoPermalink Reply by 0i7okn54zwbdo on February 23, 2013 at 6:19pm

I don't day trade, I have a broker.  Yes, I know, antiquated means to buy stocks.  But I like to support the brick and mortar guys when I can.  

Permalink Reply by Hunter 1 on February 23, 2013 at 2:17am
I have a small property 2 acres s.e. Stark co.surrounded by my bigger parcel and neighbors bigger parcels that are all leased by CHK in 2010, CHK does not appear to be interested in leasing now at least not for a good price, does anyone think that other companies would want to lease a property like this for a good price to be able to trade with CHK at a later time ?
Permalink Reply by David Mohn on February 23, 2013 at 2:42am

Hunter, if you are surrounded by large parcels that are already leased to CHK, in my opinion CHK will be back.   Maybe not this year or next but they will be back.  I believe and it is only my opinion Stark county will be VERY profitable for CHK.  We are still in the early stages of development of the Utica.  CHK knows what they are doing and they are drilling around Stark to find out how best to develope this play.  Once they figure it out, they will drill Stark County and in my opinion the wells drilled here in eastern Stark will be extremely profitable to them.  Again, this is just all my opinion. 

Permalink Reply by jason on February 23, 2013 at 3:08am

I am also in S.E. Stark County.I signed one small parcel with chesapeake in 2011 with ALOV. I then purchased another small parcel and received a letter from Chesapeake to lease that property for less money and a smaller royalty percentage. I called the landman from CHK and told him I already signed previously and would take nothing less. He told me he would up the bonus money by $250/acre but the royalty would stay at 15% when I already had  17.5% from earlier. I told him I would sign for the same bonus money but wanted 20% royalty. A month passed then I received a letter from CHK revoking all offers. This was early 2012 and haven't heard anything since.

Permalink Reply by jason on February 23, 2013 at 3:25am

Fang, I agree. CHK has drilled two wells close to me last year. So I think there is an interest in the area and I am in no rush to do anything with the vacant land.

Permalink Reply by Hunter 1 on February 23, 2013 at 4:30am
Jason,
Has their been seismic work done in the area of the property you are talking about, they did seismic in our area this past summer, one would think if they have done seismic they must have some plans within the near future
Permalink Reply by jason on February 23, 2013 at 4:39am

I am not sure if there has been seismic testing or not. I am in Paris Twp. and CHK's one well is less than a mile to the west of me and I am less than a mile east of Columbiana County, The other well is two miles south of me. What Twp. are you in?

Permalink Reply by Hunter 1 on February 23, 2013 at 5:31am
Paris twp. as well the closest drilled well is the smith well which is about 5 miles nw of me

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