Replies to This Discussion

Permalink Reply by Joseph-Ohio on April 30, 2014 at 6:48am

Style Shmile.

Permalink Reply by Joseph-Ohio on April 30, 2014 at 9:47pm

From what I understand - selling it after buying it (not all that long ago) is exactly what they're doing.

If it looks like a flip, walks like a flip, talks like a flip.......guess what.......I'm thinking (in my most humble layman landowner's opinion) there is the highest probability that it actually is a flip.

What do all of the other affected landowners think ?

Permalink Reply by deer spotter on April 30, 2014 at 11:22pm

For BP to flip their northern Utica acreage first BP has to find a buyer. Second the acreage has to be sold for more than BP paid. Sorry but just looking at the facts.

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Permalink Reply by Joseph-Ohio on April 30, 2014 at 11:37pm

Guessing they probably had a buyer even before they bought.

Dirty business this - but backroom deals happen every day.

Don't forget I'm the biggest cynic that I know.

All as always IMHO.

We'll see (if our timeline permits us to see).

I'll also qualify - none of us know the facts - you and I included.

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Permalink Reply by Joseph-Ohio on May 1, 2014 at 12:18am

I'd like that - maybe we'll hoist a beer or two  one of these days.

Would much rather it be in celebration rather than in observation however.

J-O

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Permalink Reply by Kangoo on May 1, 2014 at 7:34am

Joseph,

We all don't know all the info, but please show me any example where a major oil/gas company like BP have done stuff like that just to flip land (including incorrect statements to the media and shareholders, which is illegal, and all the other stuff you are accusing them of.

A company like BP that is spending approx. $24 billion this year on oil and gas projects, why would they pull all these things (managers risking to end up in jail) just to make a few hundred million profit?

They invested money into this project, paid the landowners a fair price and unfortunately for everybody involved couldn't get well results that justify investing the billions of dollars needed for development.

Show me any example in the last 2 years where BP did not do what they said.

They said they would pay the landowners what was negotiated and it appears that this happened except for title issues.

They said they'd drill appraisal wells and then evaluate the geology/profitability and this is exactly what happened.

They are not saying that there is no oil or that the mineral rights are nothing worth (what certain people accuse them off), but are just saying that the wells are not profitable for them.

To me it seems like at no point they did anything to harm landowners, they spent a lot of their money and it didn't work out, so they move on. That's business. No conspiracy and nothing else...

Maybe in one year somebody else will pick up the acreage and it will work. And maybe it won't.

Take a look at the history of the Barnett shale and how long (for decades) companies have tried to get profitable wells out of it.

That's just how the business works (failure is an inherent part of oil and gas exploration). No conspiracy at all.

 

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Permalink Reply by Joseph-Ohio on May 1, 2014 at 8:09am

Kindly do not accuse me of making accusations when I have not made any.

I merely sited certain events /occurrences that would / should give any involved landowner / thoughtful person pause to consider.

Flipping leases as far as I know is not against any law that I know of and there has been quite a bit of it going on in this so-called 'Play'.

Contracts in the business world are struck daily and if you are not one of the principals you have no idea what is being agreed to and (as an interested and perhaps affected outsider) can rule nothing out by the same token.

That was and is my point - don't read accusations into my comments / replies there are none - there are only my shared contemplations / questions / inquiries / puzzlements.

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Permalink Reply by Kangoo on May 1, 2014 at 9:16am

Flipping is not illegal, but they are a publicly traded company and are under much stricter rules regarding disclosure of information.

Announcing a write down of their Utica acreage if at the same time they already had a contract for selling it for big profit would clearly be misleading shareholders and could have serious consequences for management. What BP announces in their filings is not PR material to mislead landowners, but communication with their owners (the shareholders).

 

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Permalink Reply by Joseph-Ohio on May 1, 2014 at 9:31am

Thank you for sharing that Kangoo.

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Permalink Reply by Joseph-Ohio on May 1, 2014 at 9:33am

Thank you for your contribution U. S.

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Permalink Reply by Kangoo on May 1, 2014 at 9:42am

Thanks U.S.

However if they had one offer that allowed them to exit without a loss, they wouldn't have taken the write down.

Companies write down assets, when based on all their current knowledge they are less worth than their current book value.

And BP wrote down the total book value. This means they currently have no buyer and have no plans to develop the acreage for themselves.

Of course if/when they find a buyer they'll try to sell it for as much money as possible (you are of course correct on this), but for now they are not accounting for anything (they are being conservative on this).

Joseph,

This all is not meant as accusing you of anything....

I'm just trying to make it a bit clearer how big oil and gas companies are thinking and how they evaluate their assets and account for them.

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Permalink Reply by Joseph-Ohio on May 1, 2014 at 9:44am

And you have Sir.
Thank you.

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