Replies to This Discussion

Permalink Reply by FairMktValue on October 21, 2013 at 5:15am

http://gomarcellusshale.com/group/butler_county/forum/topics/rex-en...

Phil, I believe it is the earnings call above that I posted above. Down in the questions section I believe. Did not get any response on that post so I figured nobody cared. (or most people don't like to wade through a lot of the ebita and stuff like that) lol

My wife is hollering at me to do something right at the moment (can't stand to see a poor guy sittin around) - when I get a chance I will see if I can dig that out of there.

Cheers

Permalink Reply by FairMktValue on October 21, 2013 at 12:15pm

Phil,

Started digging through the conference call - can't find the specific reference I was looking for - may have been in the prior call.  But there is a lot of interesting stuff in there that I sort of skimmed over the first time. For instance:

Ronald E. Mills - Johnson Rice & Company, L.L.C., Research Division

In -- refresh my memory, but isn't -- in this area, aren't your -- most of your leases, there are no Pugh clauses, so Upper Devonian equals Marcellus in terms of holding leases in this area, which seems to be a benefit in a couple of other plays that are talking about multi-stack pad [ph]?

Thomas C. Stabley - Co-Founder, Chief Executive Officer and Director

Absolutely. I mean, any of the acreage that's been drilled in the Marcellus now holds the Utica and the Upper Devonian and any other pads or units that have been drilled to the Burkett are holding the other 4 Horizons as well. So I think we have less than 2% of our acreage that has any type of a Pugh clause on it

Ahhhh... Pugh Clauses .... one of my favorites. Perhaps I should start another thread just on them. Prolly a bunch already in the General Shale Discussions but Butler Co. does have 4 proven stacked plays so maybe ....

Cheers

Permalink Reply by Jon on October 21, 2013 at 1:17pm

It seems that the logical answer is that ohio has a better infrastructure than butler county. It's tough to believe that it's that much better, that they sent all of their drilling equipment there though. I leased with shell, they still seem to be drilling around west sunbury, but still it sounds like nothing compared to ohio.

Permalink Reply by Philip Thackray on October 22, 2013 at 11:36am

FMV,

I think it would be hard to get a horizontal or vertical Pugh clause into a lease in this current leasing environment.

 

Ron,

The geological makeup of the Ohio Utica is different than the Utica and Marcellus in W. Pa.  When the moving land masses crashed into the base rock (xx zillion years ago), the Utica in Eastern Ohio was more affected by the event (see the picture) than the Pa Marcellus and Utica.  This created more "structure" causing some areas to perform much better than others.  Some speculate that in the more southerly counties (where things are heating up), the lack of the Clinton sandstone allowed more O&G to remain trapped in the Utica.         

Permalink Reply by FairMktValue on October 22, 2013 at 12:28pm

Ya Phil, a Pugh Clause at this point in time is like spittin into the wind. Too late. This area is pretty much leased up. So even if you could get one - not much chance of leasing it to someone else.

I just don't like the idea of giving up 3 out of the 4 plays for the price of one. But the best I think I can do is maybe.....  get a bit more bonus upfront... and no deductions on the royalty.

Ahh well....never gonna beat em... just keep on sluggin....

Cheers

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