Current Events/News Releases

Today Carrizo Oil & Gas announced that it is entering the Utica Shale Play by way of a Joint Venture with Avista Capital Partners. There are 15,000 acres involved and Carrizo is paying $1,500 per  acre for ONLY 10% interest. You do the math. What would the value per acre be for 100% interest?

http://www.msnbc.msn.com/id/44727794

Randy

Views: 93722

Replies to This Discussion

Permalink Reply by Philip Brutz on January 9, 2014 at 4:18am

  • Solar Energy Poses A Threat To The Shale Gas Revolution?

http://seekingalpha.com/article/1935161-solar-energy-poses-a-threat...

Permalink Reply by Shower Bath on February 7, 2014 at 6:47pm

Read the story and understand the charts and you will understand the economics of the Play, and what your payback may be based on your location.

http://seekingalpha.com/article/2004691-utica-shale-antero-revises-...

SB

Permalink Reply by Shower Bath on February 18, 2014 at 4:07am

Gulfport Energy's 4th qtr. financial/operating conference call is scheduled. Listen in and learn.

http://ir.gulfportenergy.com/releasedetail.cfm?ReleaseID=826202

SB

Permalink Reply by scott peterson on February 18, 2014 at 4:24am

Webcast not avail yet. Any details you can share? Stock is up nicely so assuming some positive news.

Permalink Reply by Billy Park Whyde on February 18, 2014 at 6:51am
Permalink Reply by Shower Bath on February 28, 2014 at 1:17am

Current stories on the Play.

http://www.ohio.com/blogs/drilling

SB

Permalink Reply by Shower Bath on March 9, 2014 at 1:04am

"Utica shale play smaller than thought" - with comments from Larry Wickstrom.

http://www.cleveland.com/business/index.ssf/2014/03/utica_shale_pla...

SB

Permalink Reply by Shower Bath on March 12, 2014 at 5:33am

Ohio Gov. Kasich would collect $874 million from shale wells in next three years.

http://www.cleveland.com/business/index.ssf/2014/03ohio_gov_kasich_...

SB

0i7okn54zwbdoPermalink Reply by 0i7okn54zwbdo on March 12, 2014 at 7:51am

Might not be Kasich collecting it after next November...

Permalink Reply by Shower Bath on March 13, 2014 at 7:36am
Permalink Reply by Philip Brutz on March 13, 2014 at 3:45pm

http://online.wsj.com/news/articles/SB10001424052702304071004579407... 

Chesapeake Accused of Underpaying Gas Royalties

Outcry Prompts Pennsylvania Governor to Call for Investigation

By

Tom Fowler

 TOM.FOWLER@WSJ.COM

 

March 11, 2014 8:28 p.m. ET

 

Glenn Aikens, shown near a natural-gas well site on his property, has received royalty checks from Chesapeake Energy for as little as 10 cents. Brett Carlsen for The Wall Street Journal

Pennsylvanians who embraced the natural-gas drilling boom that has swept the state are starting to sour on one of the biggest names in the business: Chesapeake Energy Corp. CHK +0.28% Chesapeake Energy Corp. U.S.: NYSE $25.21 +0.07 +0.28% March 13, 2014 4:00 pm Volume (Delayed 15m) : 15.28M AFTER HOURS $25.24 +0.03 +0.12% March 13, 2014 5:04 pm Volume (Delayed 15m): 75,040 P/E Ratio 35.01 Market Cap $16.69 Billion Dividend Yield 1.39% Rev. per Employee $1,595,370 03/11/14 Chesapeake Accused of Underpay... 03/05/14 Chesapeake, Encana Charged Wit... 02/26/14 Chesapeake Energy Swings to Lo... More quote details and news » CHK in Your Value Your Change Short position

Some property owners are accusing Chesapeake of shortchanging them on royalty payments for pumping oil and gas from their land. The public outcry has grown so loud that Republican Gov. Tom Corbett, a longtime industry supporter who has received campaign contributions from the company, wrote an open letter last month asking the state attorney general to investigate.

Chesapeake declined to comment on the royalty disputes, but said in a recent letter to the governor that it is abiding by the terms of its contracts with landowners.

In Bradford County, a rural area in northern Pennsylvania where a lot of the drilling has taken place, anti-Chesapeake sentiment is running high, said Doug McLinko, a county commissioner. "Bradford County is a pro-gas part of the country where we support hydrocarbons 100%," he said, "but we don't support everyone who's doing it."

 

'I'm paying them to take my gas,' according to Glenn Aikens, who says his royalties don't cover the added taxes for owning commercial property. Brett Carlsen for The Wall Street Journal

Landowners typically receive monthly royalty payments when a company extracts oil or gas from wells on their property. The payments usually are a fixed percentage of the market value of the oil or gas or the proceeds from selling it.

In some cases, energy companies deduct the costs of transporting, processing and marketing the oil or gas. The size of these deductions, and whether Pennsylvania law can limit the deductions, are at the heart of the royalty disputes.

Disagreements over royalties are common in the industry, and Chesapeake is hardly the only company facing them. But Chesapeake's deductions and fees appear to far surpass those taken by other energy companies operating in Pennsylvania, including Anadarko Petroleum Corp. APC -0.80% Anadarko Petroleum Corp. U.S.: NYSE $81.57 -0.66 -0.80% March 13, 2014 4:01 pm Volume (Delayed 15m) : 3.51M AFTER HOURS $81.36 -0.21 -0.26% March 13, 2014 7:51 pm Volume (Delayed 15m): 47,871 P/E Ratio 51.63 Market Cap $41.42 Billion Dividend Yield 0.88% Rev. per Employee $2,609,300 03/05/14 Fred Krupp and Charles Davidso... 03/04/14 Anadarko Sees 2014 Capital Spe... 02/18/14 Anadarko Sells China Assets to... More quote details and news » APC in Your Value Your Change Short position , Mitsui E&P USA LLP and Statoil AS STL.OS +0.93% Statoil ASA Norway: Oslo kr163.00 +1.50 +0.93% March 13, 2014 4:25 pm Volume : 4.68M P/E Ratio 13.00 Market Cap kr514.97 Billion Dividend Yield 4.29% Rev. per Employee kr27,857,400 03/13/14 Heard on the Street: Waiting f... 03/10/14 New Iran Oil Deals Won't Allow... 03/06/14 Triple-Digit Oil Price Needed ... More quote details and news » STL.OS in Your Value Your Change Short position A, based on royalty checks from the companies reviewed by The Wall Street Journal.

Mary Moon, a property owner in rural New Albany Township, said the deductions Chesapeake takes from her and her husband's royalty checks are twice the size of those taken by the other companies that own stakes in the multiple gas wells on her land.

Chesapeake deducted about 37% from Mrs. Moon's most recent check for expenses such as the cost of shipping the gas to a big interstate pipeline and for processing the fuel. Those deductions cut her royalty payment for one well to $1,372 from $2,207. The well's other owners, Anadarko and Mitsui, each deducted 18% from their share of the royalty payment, their checks to her show, while Statoil didn't take any deductions or fees.

Statoil declined to explain how it calculates deductions, except to say it treats each lease differently. Anadarko said marketing and transportation costs vary but that it abides by lease terms. Mitsui, a unit of Japan's Mitsui & Co., didn't respond to requests for comment.

Pennsylvania law requires that companies pay landowners oil and gas royalties of at least 12.5%, but a 2010 state Supreme Court decision opened the door for deductions to cover costs that can bring payments below the 12.5% threshold. Based on the ruling, Chesapeake and other gas producers in the state in some cases charged landowners thousands of dollars retroactively, some landowners say.

The company's deductions have caused such an uproar that state legislators have introduced a bill to clarify the current law's somewhat vague language about royalty payments and reinstate the 12.5% minimum. The Environmental Resources and Energy Committee of the state's House of Representatives is scheduled to hold a hearing on the bill this month.

In a letter to Gov. Corbett last month, Chesapeake Energy Chief Executive Doug Lawler said most of the company's Pennsylvania leases allow for deductions. When royalty disputes arise, the company tries to reach a deal with landowners if it can, his letter said, as it did last year by settling a class-action lawsuit over one kind of deduction.

Larry Moffett, a lawyer representing landowners in the lawsuit, said the settlement will cost Chesapeake $7.5 million by current estimates, but that the figure will probably rise, depending on how many landowners join the suit and are eligible for reimbursements. It could ultimately cover several thousand people, he said.

Traditionally, royalty payments have been free of additional costs and fees, said David Sikes, a past president of the National Association of Royalty Owners. But over time companies have started to require landowners to cover a portion of transporting, processing or marketing oil or natural gas. On average, U.S. property owners get less than $500 a month from oil and gas wells on their property, so the cost of hiring a lawyer to argue over deductions can be difficult to justify, he said.

Glenn Aikens, a farmer in Litchfield Township, said royalties from his three wells have been so tiny they don't even cover the added tax he owes now that his land is classified as a commercial property because of the drilling.

He received several small checks from Chesapeake last year, including one for 10 cents and one for $1.10.

"With the differences in taxes, I'm paying them to take my gas," Mr. Aikens said.

Write to Tom Fowler at tom.fowler@wsj.com

 

 

Permalink Reply by Philip Brutz on March 17, 2014 at 1:41am

Shell to restructure shale assets in U.S.

Future of Beaver ethane plant unclear



Read more: http://www.post-gazette.com/business/2014/03/14/Shell-to-restructur...

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