Leases are beginning to expire. Who is getting renewed?

We have two leases north WVA-Mon County and on in Perry Township Greene County. One lease expired last year and was not renewed. The other is a long term lease going back to the 1970's-both with EQT. The Greene county lease is with Atlas(Chevron) and is expiring 4/2013. My question is to those with leases coming up-Do you expect them to be renewed or for those who have had leases expire-I would like to see some comments. Terms on our leases-bonus payment and term 3 years were excellent.  I don't see much activity in resigning. The three properties are combined 250 acres-70-70-110

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Permalink Reply by Frank Nesmith on July 25, 2012 at 7:09am

CHK is drilling in PA in Darlington Twp at McRoberts well right now. I thought that was all dry gas. Two permits there. One on a Bibbee well. northwestern corner of Beaver County. Thought they were going for oil. Any ideas why they are drilling there for dry gas, or is it really oil there?

2s72s0k9mm8gdPermalink Reply by 2s72s0k9mm8gd on July 25, 2012 at 4:08pm

I really don't think Shell would plan a Cracker Plant in a "dry gas" area. Remember this area has more than just Utica to drill into. This isn't far from the Patterson site as the crow flies either.

Permalink Reply by Denver Gallentine on July 26, 2012 at 9:33am

Hi,

     Your source said the CHK was moving from Mon county to PA and northern WVA.   Did he/she happen to say where in northern WVA. We have mineral  rights in Marshall Co. that has a lease that expires in 2013. We have just gotten a second offer to buy the mineral rights for $3000 per acre. I was wondering if Marshall Co was mentioned.  Denver

Permalink Reply by JK on July 26, 2012 at 11:54am

Denver,

I was told Northern WV and PA.

No specific counties were mentioned but your land is in that area.

Are you leased with chk? How many acres do you have? 

 

Permalink Reply by Denver Gallentine on July 28, 2012 at 4:27am

JK,

     We have 25 acres in Marshall Co. and another 3 acres in Wetzel County.  We are signed w/ Marshall Co land w/ CHK until 2013 and w/ CHK w/ the Wetzel County land untill 2015.  We also have land in Carroll Co. Ohio signed w/ CHK unlimited (signed by my parents in 1960's)  A well is going up w/in sight of the farmhouse, but I only have a 1/3 acre in the PU. I still waiting to get rich. Close, but not there yet.  Denver

Permalink Reply by Jack Straw on July 24, 2012 at 4:20pm

RE: "Leases are beginning to expire. Who is getting renewed"

I will offer an opinion, and it is only an opnion - as anyone who claims that they can accurately predict future prices are either delusional or filthy rich and need not spend their time here.

The recent "discovery" that new technology could unlock natural gas, natural gas liquids (NGLs), condensate and oil from shale source rocks has resulted in an oversupply.

The Law of Supply and Demand can be a cruel Master.

Natural Gas prices have dropped to below which it makes good economic sense to  currently drill and produce dry gas.

NGL prices are approximately half of what they were last year, their economic attraction has decreased.

Oil prices are off their recent prices, but still attractive.

 

It is my opinion that (at this point in time) a landowner should not expect to obtain good terms on a lease renewal or on a new lease.

My opinion (for what it is worth) is that it might be in a landowner's best interest to delay either renewal or entering into a new lease until Natural Gas prices recover to at least $4.50/mcf (currently $3.17/mcf) and (if in a wet gas area) NGLs recover to near their 2011 highs.

Eventually (and perhaps sooner than many expect) demand will catch up with supply; and the landowner will be in a better position to benefit from what lies beneath their feet, patience can be a virtue.

 

All IMHO,

                JS

 

 

 

Permalink Reply by Bluflame on July 25, 2012 at 12:39am

Jack,

  The good news is that NG prices have rebounded nicely over the last few months. If the trend continues (certainly no guarantee), we could get to your $4.50 threshold sooner rather than later. Of course, there are lots of restricted gas wells waiting to come on stream full-tilt if the recovery does occur!

BluFlame

015334grltd9mPermalink Reply by 015334grltd9m on July 25, 2012 at 1:11am

The World is beginning to suck it.

Permalink Reply by edward conley on July 25, 2012 at 1:01am

Does anyone have any info about a well referred to as Esther Clark on the bourder of Mon county and Wetzel county near Burton. I have been told that it has been fracked.

Permalink Reply by Donna Starkey on August 21, 2012 at 2:59pm

I also have been contacted by Chesapeake that I have interest in the wells on the Esther Clark farm.  If you have more information, please let me know.

 

Permalink Reply by edward conley on August 23, 2012 at 10:36pm

I will share info with you as i get it, please do the same.

Permalink Reply by Henry Edwards on July 25, 2012 at 3:49am

I was told yesterday by a person in the industry that the Administration is not allowing us to export LNG to keep the demand down for natural gas and to keep the price artificially down so it can compete with coal. The coal people are going out of business because they cannot get permitted so supply of coal is dropping. Natural Gas Driller are not drilling because the price is low. Since 50% of all electricity is created by coal. Do you see where energy prices for electricity are going if we have a cold winter, there is no coal and natural gas demand rises. Sound like a potential problem which is being created by the Administration. I hope all the voters out there are staying in tune with what could be a real problem for this country in many areas including national defense. Your comments have been welcome on the leasing.

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