Do you want China to profit from your land?
Read your business paper/column, please. Chesapeake come into an area, pays the highest amount heard of, runs all the other operators out, and then sells their interests to China and India to finance their next move.
They have done it with their Barnett holdings, Haynesville holdings, Eagle Ford holdings, and will be doing it with their Utica holdings.
There are plenty of other companies to work with that work with institutinal monies and the monies remain stateside - the biggest bonus check is not always the best bonus check.
Don't take it wrong, I do not have anything against capitalism, just communists practising it in my country, on my land.
No Chesapeake for me, I don't care how much money comes to my hand.
Chesapeake, Shell (East Resources), Chevron (Atlas), Exxon (PGE), all have said they are going to run the shale business. They have stated they will make it to where there will only be 6 operators in the Marcellus, do you think that will be good for the local economy? I have found smaller operators that have access to institutional monies that do complete the drilling, and they have better relationships with the landowners.
Think about it - I can't change your mind, I only want everyone to consider the ramifications of just accepting the biggest check they can get.
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Replies to This Discussion
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Permalink Reply by Nate on
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Sierra Resources is another large player in this play and they are an American business.
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Permalink Reply by Bill anders on
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Investment from overseas does not make a company a non-american business! It makes them a better American business.
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This is one of the more ridiculous comments i have read thus far. The idea that foreign companies investing in a working interest within American exploration and development companies being a bad thing is misguided to say the least.
These local operators you speak of should have a competitive advantage here if they did in fact understand what is going on here. Unfortunately, it has become blatantly obvious they do not. They have sat atop these formations during their entire existence here in OH, and have never even taken the chance to develop these fields. Why??? They dont know where or how to do it!
Partnering up with multiple majors throughout the world is one of the smarter moves an independent E&P can do right now. These shield them from a takeover by any major out there, considering no major would want to partner up with their competitors. CHK has shielded themselves accordingly, as well as gained access to fields across the globe.
It is your short sighted thinking that keeps the momentum of US industry from expanding. God forbid China invest in anything besides our debt. Get off the Kool Aid!
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There you go Bill, let's sell out. I have worked all sides of business. I raise capital for investments from areas all over the country and institutional investors. I have seen the Oil and Gas business develop over the past few years into something that is crazy.
Call it ridiculous, and from CHK, perspective, it isn't they can push everyone else out and use China's money to do it with, and you cheer them on.
The shale gas play is something new, it hasn't been sat on as you put it - it just shows your ignorance of the industry. Everyone, the little guys and the big guys all knew it was there, they just didn't know how to get it out.
It was a small company, Mitchell Energy, a wildcatter, that figured out how to get the gas out of shale plays - without the little guys, non of this would happen, because the other companies all went overseas chasing foreign money. Exxon, Chevron, Shell, all were "offshore" until the Marcellus. Why? they were too late for the Barnett. CHK was there, a little late, but there, and then sold their holdings to China.
They did the same in Eagle Ford, Haynesville, Collingwood - oops, left Collingwood due to bad showing - but the smaller operators are still there, making aa go of it.
The smaller companies were the instigators of the push, the big boys came in later and are trying to pushe them out, using foreign monies.
And, by the way, I also said I was not trying to change your mind, I was sayin I choose to no longer serve someone else my land on a silver platter, I will ook for and will find the guys to develop my property without CHK and China.
You, being defensive of CHK and the world investment stage are not my concern.
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you do understand you are speaking of an independent E&P company which began as a start up in 1986, correct? They are the epitome of a wildcatter that evolved into what we in America call a successful business. Luckily, they did not have short sighted oversight such as yours leading the way or the industry would not be expanding to extremes it has.
these joint ventures are also a Working Interest, and in return these foreign companies profit by giving a drilling carry in order to provide the capital to produce these resources in the best possible way.
who are they pushing out Craig, last time i checked they are one of the few players in town. Good luck having Bill and Joe's Local OH drilling produce your acreage, i bet they will do a really good job.
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Forgot to mention this is generally a minority interest, in which they retain full control of operations. So yes, they are using foreign money to create jobs, royalty streams to U.S. Landowners, Tax revenue at the local, state, and federal level, as well as decreasing our dependency on foreign oil. What bastards!
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For some reason Bill you seem to look at CHK as the only game in town. The biggest, yes. But the best fit for most people? Not likely. Unless you like having your royalties come from a company that markets their own gas thus paying a gas prices that is lower than industry standard. Lets also mention that they have 1.5 million acres in Ohio. When are they going to drill your well with that que. Also let's not forget how this company and its honest practices up in Michigan left many farmers bankrupt after they bought equipment using the promise of Chessapeake paying the signing bonus on the land they leased to them. Only to see chk pull out of town and renig on all those contracts. http://blogs.forbes.com/christopherhelman/2011/01/31/chesapeake-ene...
My point is this is like going into a marriage and I just can't seem to trust all the things my CHK girlfriend is saying to me. Sure she's sexy but she'll drop me in a heart beat for the next hot guy she sees walking down the street.
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Been to Ohio Nate, I would take my chances on anything sexy walking by...as far as farmers in Michigan buying equipment before they were paid on an option agreement...cant fix stupid.
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Permalink Reply by Finnbear on -
This brings to mind an old saying - something about not counting your chickens before they've hatched.
A lease "offer" from an O&G like CHK is just that, an "offer". Until the lease is filed with the govt and you have the cash IN your bank account it remains an "offer" and isn't worth the paper its printed on. If a farmer bought equipment based on money they did not have yet then they are the foolish one and they and the foolish bank that loaned them the money deserve to get stuck. This is called "living beyond your means", spending money you don't have, and it is a large part of why our economy is in the shape its in today.
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Something that my mother taught me is Never Count your Chickens before they are hatched. There will be many that signed contracts that will never see the riches they had hoped for.
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Obviously, you don't read well Bill, and your eyes being enamored with CHK have you blindede to the reality of the situation.
I never took anything away from CHK, they have done a good job at taking foreign monies, placing them in US soil and making a buck off of it.
They hire lame landmen, from brokers, so they have no vested interest in them in the future, just like offering tons of money to run the local operator who is drilling out of the game, then drop the leases, and the farmers were the ones holding the bag.
The farmers made a mistake of signing with CHK in the beginning, they should have supported their local guy get the leases he need and had the development. Oh, and if this doesn't sound familiar, it was Collingwood in MI. I believe Nate posted an article.
Apparently you are enaamored with CHK, or worse, you work for them, but again, I am not here to change your mind, I will not sign with them, and I will find Bill and Joe that can. And I will find the neighbors to go with Bill and Joe as well, and we will get the development.
CHK has million acres in OH. If you look at drilling million acres in a year term, even at 640 ares per unit, that is 468 wells each year. Now, that is going to be difficult to get done, unless CHK unitized larger groups, does not fully develop it, and ties it up by HBP'ing chunks to sit on, as you accuse the smaller guys of doing. If the smaller guys had the acreage, and were just sitting on it, then CHK would not have a position at all, the land would have all been leased.
CHK, not at all what you talk them up to be.
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Permalink Reply by scott jackovitch on
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Craig I agree that Chk will most likely sell off a lot of their leaseholds to a foreign partner. However your statement about the farmers not supporting the local guy could not be farther from the truth. About 5 years ago a local Ohio based drilling company came through my area leasing thousands of acres and telling us how great everything was in our area. If you ask them now they will tell you that my area wasn't very profitable for .them and they were most likely not going to be doing any drilling. Yet in the meantime CHK has drilled one well which is reportedly producing 1000 barrels of oil per day and another well just a stones throw away from that one. Both of which I can see from my property. The same property the local driller told me wasn't very profitable. Sometimes the proof is in the pudding. Where I am at the pudding is CHK.
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