Halcon applies for Mercer --> Venango Co pipeline
Halcon has applied to construct a 17.5 mile 16" pipeline through Mercer Co to Venango Co, terminating near Wallace Corners in Venango Co. Interesting that they are going to construct this pipeline since they have announced no drilling plans. Seriously doubt they would go through that big an expense for just the Allam well. Perhaps they will drill some additional wells as the pipeline nears completion.. No completion date in the article. Also gotta wonder if some of the other players in the area have agreed to pay for or utilize the new line. This may open up eastern Mercer and spur some activity in Venango.
http://www.ncnewsonline.com/news/halcon-proposes-pipeline-through-m...
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Replies to This Discussion
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Permalink Reply by Jim Litwinowicz on
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Jesse; hard to figure these guys out. They leased an additional 3000 acres in Venango in mid- 2012 just before the infamous 'sh!ty wells' statement by Floyd but after they had drilled and fracked the Allum well.
Putting in this line means they will drill additional wells. Thats too long and to much money for just one or two wells. And I suspect that Hilcorp, Chevron, and/or Shell, or some other E & P, will contract capacity on that line.
Good news for the area, just don't know how good.
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Permalink Reply by David Perotto on
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Dont forget Range and Seneca. Both have leaseholds in Venango,
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Permalink Reply by tnc on
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What I don't get they mention sugar grove township, the map of the pipline does not come close to sugar grove.
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Permalink Reply by Samuel J. Orr on
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Jim:
I will summarize my thoughts on the HK pipeline permits but recommend you read my posts and those of others to the Mercer county Comment Wall;
Halcon needs to sell its non-core assets. None of the acreage that would be serviced by the pipeline is to be found among what Halcon considers its core acreage. To the contrary ,Floyd Wilson has referred to the area as "goat pasture". The Allam Well test results were OK but not great.However there were multiple technical difficulties in completing the well, and fracking techniques have likely improved since the well was drilled. I think the Geology in the area is Good. If the Geology is bad, the presence or absence of a pipeline is irrelevant. Good Geology with a conveniently located pipeline nearby is far more valuable than Good Geology without any such available pipeline. Halcon's financials are terrible especially with the currently depressed price of crude oil. I believe they have no intention of constructing the pipeline, and no financial ability to do so were they so inclined. The permits are likely assignable and will likely be assigned simultaneously with Halcon's leasehold interests to another O&G company. I think Halcon's procurement of the permits makes sense, because the permits enhance HK's ability to market their non-core acreage, and likely enhance the amount of dollars they will be able to receive when a sale is completed. (I think I expressed myself a bit better in posts made to the Mercer County Comment Wall where others have also posted relevant information and opinions.)
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Permalink Reply by Barry D on
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Jim,
If Halcon is planning to sell it's acreage having a pipeline in place would be an added selling point.
If Halcon sells the acreage but keeps the pipeline it provides revenue to a cash strapped company.
There have been rumors that Mr. Wilson is in negotiations to sell his Utica lasehold. Having a pipeline in place may be part of the deal. I know the company continues to collect right of ways in Ohio too.
But, of course it's all speculation.
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Permalink Reply by Samuel J. Orr on
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The pipeline costs a lot of money, money which in my opinion Halcon does not have. It might take 2 years (my guess) to complete.
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