Check this out, it does not seem that the wells in any part of the Utica are not going to be productive and a money maker.
'Time spent sufficiently impressive'
I'm not impressed up here in the north.
Subjective I guess, yeah but no is still my subjective impression.
I try not to judge either but to defend / reinforce value in my investment is another thing.
This is an interesting thread. Suffice it to say those that think they know, may not. Hang tight Michele, I don't know where you are exactly but there is activity..... even North of Lisbon Mike.
As far as pipelines, not only has Hilcorp built the Hickory Bend project out to Kensington... a very large Kinder Morgan Pipeline runs through the county north of Lisbon. Pretty sure that is very attractive to the producers.
Dr. J, pipeline infrastructure is attractive to producers but it does not trump geology. If you have the world's greatest pipeline network but it starts in an area of marginal production then you don't actually have the world's greatest pipeline network.
I use the term 'marginal' because thus far we haven't seen any evidence to the contrary. Hilcorp's Mahoning wells are not good. They're not bad to the point of being worthless, but they aren't good. I can only base my opinion on what data exists right now. If Columbiana/Mahoning was going to be a great area you'd see CHK drilling like gangbusters, because that's what they do. The lack of information is in it of itself information. This is not to condemn any area, because science and engineering can change over time. It's just a sort of state-of-the-play snapshot for this moment in time.
To me, the state of the play is a result of / due to the management of the play.
Won't know about marginality (I think I just invented that word - kind of like it too) until development and production permit such evaluations.
To me the development pace (since the large geographic area of the northern tier here in Ohio lies in wait / languishes for attention) is the only thing that I could call marginal but would choose the word anemic instead.
Only IMHO as it always is.
Choking a well back to the point where payout is pushed years down the road is abnormal. At the pace they are going the wells in Poland are not going to reach a profit for maybe 60 months. That's atypical of flow management. So that tells me something about the relative profitability of those wells. Again, we have very little information at this time so I can only make an educated guess based on what's out there. There's a reason you don't see a ton of mineral or royalty buyers flooding that part of the play. Follow those guys and you'll have an idea of where the best stuff is going to be.
Hilcorp invested an awful lot of money in the Utica. It doesn't make sense that they'd actively diminish their returns to the point where the wells were uneconomical for half a decade. Something smells here.
I take it then the wells are choked back.
But, you can't say they're choking the wells back pushing payout years down the road either, Dexter.
You don't know how long they intend to choke them, so it's another assumption.
Only looks to me like one assumption on another.
Maybe that's the way you / others in your business typically prognosticate - I don't really know - what I do know is that I wouldn't - unless I had a reason to do so.
In my mind such a reason may be 'asset management' and another closely related one might be 'market conditioning'.
Could be the mineral and royalty buyers you refer to keeping an eye on are waiting for the 'conditioned market'.
Maybe Hilcorp also wants to sell and spread the associated risk ?
Hard to tell what motivates business.
I was responding to the comment about lack of infrastructure north of Lisbon. Simply not true. As mentioned Hilcorp's Hickory Bend project runs from New Middletown to the Grubbs well in Salem Township ( that would be north of Lisbon) and then joins the second phase of that pipeline and continues to the Kensington plant.
The Kinder Morgan pipeline runs across the county north of Lisbon and it is being utilized.
IF you have your ear to the ground in Columbiana County and are paying attention, there is activity.