Chesapeake and the Deutsche Bank mortgage

I know it's still a fairly long time horizon, but does anyone have any insights or guesses as to what will happen when the five year period ends on the leases Chessie purchased from Everflow Eastern in 2012 and mortgaged to Deutsche Bank?

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Permalink Reply by Dexter Green on September 15, 2015 at 3:42pm

If they don't renew those leases then said leases will no longer be collateral for the mortgage.  

1s7k1qp9wk1t7Permalink Reply by 1s7k1qp9wk1t7 on September 16, 2015 at 1:59am

Brilliant!!!

Mike MurphyPermalink Reply by Mike Murphy on September 16, 2015 at 5:22am

I think CHK will be selling a lot of Utica leases in the near future .......they are about broke and are not renewing any leases at this time from everything I read .... they are in talks with some Asian companies looking to buy up leased acres .....most companies are not renewing leases

Permalink Reply by Summer Johnston on September 16, 2015 at 2:26pm

What likelihood do you think Chessie has selling those leases in Mahoning and Columbiana? BP can't sell Trumbull.

So that'll leave Total E&P out in the dark too, right?

Mike MurphyPermalink Reply by Mike Murphy on September 16, 2015 at 2:48pm

Northern Columbiana, Trumbull, Mahoning and Ashtabula are not economical to

drill  so don't figure the leases up there will be renewed or sold ...no wells drilled in Ashtabula and a handful of duds in Mahoning and Trumbull ....those leases are not very marketable and investors in this market are only interested in good acreage.....If that acreage was any good Aubrey Mc Clendon would have been there scooping up every acre he could and BP would have never closed up shop and wrote off the acres they have.... your out of the pickle up there Halcon the only idiots up there and their about to go belly up   there is no new well development happening up there,,,,,go to ...uticashalemaps.com and u can see what I mean look at production reports for the producing wells in Trumbull and Mahoning counties all duds

Permalink Reply by Joseph-Ohio on September 16, 2015 at 3:36pm
Summer,

Do you know if there have been any offers made on the Trumbull leases as of yet ?

Maybe they haven't been sold because the offers just weren't up to snuff with the sellers ?

In other words, worth more to the sellers than what the potential buyers offer.

Or maybe no available money to buy with.

Also, as I understand it, the leases are collateral for mortgages in Trumbull.

On that basis alone, I would bet the leases in Trumbull will be renewed (or sold) before they time out.

Also, as it is now, they have control of many acres of land rich in natural resources which I've always believed to be the primary objective ( from the beginning of all this). I don't believe they'll give all of that up myself.

Regarding economical or non economical - that yardstick changes with many variables. Also, as I understand things, hardly any wells are producing much these days since the bottom fell out of the price for a barrel of oil and natural gas selling as cheap as it is.

From what I read / see / hear on these pages and elsewhere seems to me that they continue to drill but not sell.

I think they're preparing / just getting ready for the future market right now.

JMHO

PS : BTW, curious, are you a Johnston from Johnston Twshp. Trumbull County ?
Mike MurphyPermalink Reply by Mike Murphy on September 16, 2015 at 4:22pm

JOEY better look around there are no rigs drilling in any of those three counties there is no big infrastructure projects up there either

and there wasn't any when prices was up a year ago  maybe Halcon  who is on the verge of bellying up   your living on a hope and a dream like I told u before ....not economical then and not economical now or in the future everyone of the wells Halcon drilled are duds and BP left town one permit in Ashtabula that has never been developed not been a new permit issued up there in over a year in all three counties

BTW

what have u been smoking like to get me some of that

Permalink Reply by Joseph-Ohio on September 17, 2015 at 12:16am
I don't smoke anything.

Rig counts keep falling in this poorer market - even you should see that.

No $100.00 per barrel oil to drive more development - even you should see that.

What do you smoke Mr. Mike ?
Permalink Reply by Joseph-Ohio on September 16, 2015 at 10:51pm
What do you think happens if they (the original lessee) defaults on the mortgaged leaseholds ?

The mortgage holder owns the collateral (the leaseholds) until the lease times out or they (the mortgage holder) extends them I would guess.

Do you think the mortgage holder would loan more money (to the original lessee or a new / different lessee) to enable them to extend the leases (or maybe buy the original leases) while maintaining an interest in any new development ?

They can cut the baloney a lot of different ways can't they ?

I wonder.
Mike MurphyPermalink Reply by Mike Murphy on September 16, 2015 at 11:18pm

don't know the terms of the loan but people default on loans every day then the lender takes the collateral and salvage what they can to recover the lose  the banks were snowballed in to thinking it was a good investment when prices were up now they have to live with the bad investment  since the bottom fell out ..........CHK has money borrowed against all their acreage in Ohio that's why they are trying to sell it off right now ......but acreage with little to no potential will probably not be renewed or sold off and life will go on  the first 5 years was a learning time now they know what is good and what is junk and  will be weeding out the junk acres and cutting the fat the companies that did lease in those northern counties mostly jumped on the wagon late in the game and leased up there with hopes it would play out to be good but found out with a little exploratory drilling it is not worth the risk up there

Buying leases up there would be like buying a car with 2 flat tires and no muffler

Mike MurphyPermalink Reply by Mike Murphy on September 16, 2015 at 11:45pm

currently there are 19 rigs running in Ohio not one rig running in the three counties up north .....wonder why.........maybe they are waiting on 200 dollar oil and 10 dollar natural gas

Permalink Reply by Joseph-Ohio on September 16, 2015 at 11:58pm
They're certainly waiting for something - and it looks to me like they have reasons to wait - there's a lot of things going on - a lot of variables - and those variables are varying too.

Maybe waiting for precedents to become established in courts ?

Maybe the next election ?

Maybe money ?

Maybe a lot of other things ?

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