Shell's 3rd Utica well in NW Tioga PA set to report..........

Happy New Year to All!

Production reports will be hitting for PA before we know it.  We already saw the results for the Neal and Gee wells, and this report will add the Synnestvedt well in Osceola township, Tioga County, PA, Shell's third Utica well in this area.  There are many looking to this well to see if the Utica does in fact reach this far north, and what type of production it has given since being drilled.  
Obviously, most, if not all of you have seen the below map.  And there seems to be quite a heavy weighting to that 'point pleasant' line, as some major line of demarcation that is not to be questioned for any reason.  However, I have yet to see concrete evidence that supports this thesis.  As a matter of fact, if the Synnestvedt well, which is well north of this 'line', is commercially viable, we have to question the validity and concern of this 'line' as a hard border.  Taking it a step further, if this well, which is on the border with NY, produces even close to the Gee well, we have to question this foregone conclusion and consider the entire northern acreage just north of the point pleasant as commercially viable and green-lighted as drillable for the operators.  This will open the door for north west Potter county and tracts in McKean county to be intensely leased.





Back to the Synnestvdet well results:  there seems to be some thought that it is on a choke.  I would not be surprised to see the well come in around the 7.5-11 mmcf 30 day IP, as it serves a few purposes on Shell's behalf.  First and foremost, they have more acreage to lease in the nw quadrant of Tioga (all you holdouts out there waiting for more money, higher royalties, and lower deducts, and i happen to agree with y'all!). So if you were Shell, would you rather report another huge Neal well, or another very solid Gee well?  
Also, if Shell is aware that the point pleasant is not meaningful for dry gas, due to reporting a giant, lease deals in northern potter get more expensive as well.  So again, it pays for them to not report a massive well on the northern border of tioga.  
Perhaps there are other reasons that it is on a 'choke', and not just purely for economic reasons, whatever the case may be, it is much more important to know the wide-open production as that gives us a better picture of what the actual potential is across the play.  That production number just might be another 6-12 months away.
Let's take a look at a few more maps.  Hmmmmm......upper devonian, another target formation.   Western and north western Potter are within its boundaries as well as south eastern McKean......... 

Inline image 1
And below, this is from EQT as well, you can visit their IR page, from their december 2014 preso, you can see these maps.  This is what they are considering commercially viable maps for the utica, no surprise, their lines DO NOT take into consideration the all knowing point pleasant line.  There is also another operator that has mentioned that the pp is meaningless for dry gas production, no surprise its not part of their press releases.
Inline image 2
 
I hope this post solicits a healthy conversation on the new Northern Utica and how the trend develops over 2015.  Expectations are for permits to begin hitting across Potter for a few Utica exploratory wells.  Hancock pad?  Leasing continues to be robust in the county, with prices at their highs for the last 5 years, last I heard they were from $2,000 - $2,500 bonus, with royalty rates as high as 15%, no deduct, either 5 year, or 5 + 5. 
Obviously, with just solid production report from Shell's Synnestvedt, an entire area north of the pp line will be opened to leasing activity and a once previously held belief will be discarded, one that seems to have been already discarded internally by a few, if not many, operators.
 

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Permalink Reply by N Bohl on January 5, 2015 at 1:02am

I will have to look it up to make sure of the depth but it is a SWEPI site named Lopatofsky 287. It is exactly in the center of the County and this is a permit issued about a month ago.

Permalink Reply by Jack Young on January 4, 2015 at 6:57am

One thing to remember is that the industry has known about the Shell results in Tioga County for some time, and nobody rushed in even when gas prices were substantially higher 6 months ago. You can explain this by looking at the limited pipeline capacity in the area, the high cost of completing Utica wells and the supply/demand imbalance for natural gas nationally. I'm not sure we're going to see any more new players show up in Potter County until/unless somebody gets a well there that beats the Tioga County results. If a company didn't jump in at $4 gas, why would they come at $3 gas? My feeling is that we need to be patient and work with the companies who are interested in the area already. Once they have the acreage they need they'll hopefully try a few test wells regardless of the gas price, and then we'll know what we have there.

Permalink Reply by Tim on January 4, 2015 at 7:41am

Jack,

Do you have any facts to add to the discussion?

Have lease prices gone from $300 to over $2200 in the last 12 months?

Does anyone have any facts on the Hancock pad permit changes that hit the end of December?

Permalink Reply by Jack Young on January 4, 2015 at 10:56am

I just posted some facts. All you've been posted is promotional material designed to get someone interested in leasing your OGMs in northeastern Oswayo Township, which you fear may be north of the Point Pleasant line.

Convincing the people on this forum that the area is hot has no value - you need to convince the industry that they can make money in the Utica there under current conditions. That hasn't happened so far as regards the northern tier of townships in Potter County.

I expect a slowdown in leasing activity in Potter County and a reduction in offers (bonuses and royalties) once the 2014 budget money is all used up. But better news on prices and production can turn that around, of course. Let's just hope we get some.

I'd like to see Oswayo Township attract some attention too. Posting on this forum won't make that happen, however.

Permalink Reply by Tim on January 4, 2015 at 11:35am

Jack,

Since I have been reading your posts, you have only bashed the entire play.  What's your agenda?

I have been trying to discover factual data on why the point pleasant line holds so much weight, as to date, I have found nothing to support that notion.  Again, you do not have any facts, or you are so close to the companies, you cant state them.  I prefer you do not respond to my threads unless you have FACTS to contribute to the discussion, I do not have any interest in your opinions as they are only and always self serving.

Let's check my facts:  if the Synnestvedt well is commercially viable, it will open up new regions to leasing activity.  Are we not here to share data, and thoughts?  Is the Synnestvedt well not north of the pp line?  

Did i not post the research report on pipeline projects in the northeast and how the differential will be gone sooner rather than later?  Was that my opinion, are an analyst that gets paid $$$ to write those reports?

Jack also knows that operators do not make decisions on spot prices, these are decade long plays, not 3 month plays.

Jack also said to lease at $300, price not going up.  Jack also said to lease at $1,000, cause it wont get any better.  Well the current market is north of $2,000, that was some advice you gave.

Jack also said make a deal with your current company, cause no one else will ever care about Potter.  Jack also doubts the utica is any good in Potter.  Oh yeah, this one takes the cake Jake, unless a well bigger than Shell's neal and gee hit in potter, the companies are not gonna care.  That is the biggest B.S. comment ever.  Jack, there are many commercially viable wells below 26mm ip, and below 12mm IP, and you know that.  

My question to you is why do you keep feeling the need to post comments that you know to be false?  

Permalink Reply by Jack Young on January 4, 2015 at 12:37pm

Wow.

I'm not going to even try to reply to the substance of your rant. You have acreage in an apparently poor area, and I'm sorry nobody wants to lease it. I've never posted anything I don't believe, and I have 30+ years of industry experience in McKean and Potter Counties to back up my comments. We've drilled hundreds of wells, signed hundreds of leases and have hundreds of active royalties. Literally. You seem to know almost nothing about the business, yet you want to lecture me when what I say doesn't serve your purposes. That's pathetic.

If I was you, I'd either stay patient and hope that your area proves profitable one day, buy acreage somewhere more promising, or find a new hobby. But most importantly, if you want to attract industry attention, spend your time pitching the operators who have money to spend, not other landowners. I try to be helpful here, since I have acreage all over and leases with most of the major players. But I've got the advantage of having no motive for posting other than to be helpful. You don't want my perspective on things, so don't ask. And good luck trying to convince the whole industry they've been missing out by not leasing your property.

Permalink Reply by Tom Brian on January 5, 2015 at 2:42pm

Shell's Synnestvedt, pad in Osceola Twp Tioga Co. is piped into an old north penn distribution ( UGI )  line is being run straight into neighbors gas meters, it is not likely all the gas from this well can  go through this pipe and this is only  1 of 4 fracked wells on this pad.  2 marsels and 2 utica, so first reports  won't mean a thing as far amount of production is concerned, only shell  will know for sure the rest of us can only wonder.                                                                  

  

Permalink Reply by paleface on January 6, 2015 at 3:48am

 Tom Brian's post is spot on he nailed it.

Permalink Reply by G S Gass on January 6, 2015 at 6:40am

Tom,  

Thank you for your "boots on the ground" explanation for the choked back production.  Although UGI's distribution system (which was originally constructed back in the 1930s Tioga County gas boom) has been maintained and upgraded to satisfy local residential and commercial customer demand, it lacks capacity and maximum allowable operating pressure (MAOP) to transport initial production volumes out of these new wells.  Hopefully, good results will justify infrastructure buildout to tap into Dominion and/or Tennessee transmission systems.

Permalink Reply by Tim on January 6, 2015 at 8:18am

thanks Tom, Great color!

Do you happen to have any information regarding the Watkins?  Heard there are 3 utica wells drilled, 2 possible 3 have been fracked.  There seems to be some chatter on one being flared soon....any word?

Permalink Reply by Tom Brian on January 6, 2015 at 9:49am

Copy and paste or click  no first hand info on this one. likely not up to date.

http://wellwiki.org/wiki/149542

Permalink Reply by Frank Synnestvedt on January 13, 2015 at 10:50pm

Hi, its 1 Utica , 1 Burkett, and 1 Marcellus all horizontals and fracked and right now only the Utica is flowing into a UGI 6" pipeline also we have a vertical.

Frank:) 

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