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Permalink Reply by Heidlebergman on December 11, 2015 at 10:42am

Some speculated this would happen. They were mostly frowned upon. In 2008 the major Appalachian players were still reluctant to invest in the unconventional shale plays. The transmission companies were just as reluctant. If the traditional E&P companies (the ones operating prior to 2005-2008) had stayed the course and been the ones to develop the Marcellus...things may have been done differently. These companies were run by older gentlemen who had been through the ups and downs of the gas fields, they understood the land, existing infrastructure, the politics, their approach and management style was less risky, perhaps too apprehensive...their position was replaced by companies who embraced the high risk high reward model...thus our current situation. I play fantasy football and I always have that one obscure player that hits it big one game and I didn't start him. What happens?...you get stuck playing him every week hoping he will duplicate that one big game...and he never does. Next thing you know your team is 2-7 and you can't do anything right. I think that happened to a few companies...they were so afraid of missing the big game, they lost the whole season. A lot of wasted money, wasted capital, and manpower that could have gone into improving the infrastructure and developing long term growth plans. I think it was inevitable that prices would drop...but this low? There were people saying that these companies needed to tighten up and quit wasting money...you get the point.

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Permalink Reply by Sherre Boyanowski on December 11, 2015 at 11:04am

The State Government also has something to do with this. Pa doesn't have laws in place to govern the Marcellus gas. We don't have allowances as in other states. A test is run on a well and the government agency then tells the O&G company how much gas they can produce from that well without depleting the resources.  Pa doesn't have this in effect and some are running wells wide open. If there was a control in place the prices would be much higher.  This is some of the next legislation that needs to be put in place. 

All said and done for September production, from Chesapeake, we were paid 7 cents per mcf.!!!! That was from the 9 wells we are in from 3 units. These wells produced 3 bcf for the month. Granted, Chesapeake only markets 1/3 = 1 bcf. Still, $559, check is not much for that much gas. We would be better off leaving it in the ground.  They are depleting the resources.  Stat paid 88 cents. Not much better, but you don't see deductions they take before figuring the price of your gas.

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