Marcellus Coming of Age in Western PA

Range Resources has come out with 10 horizontal well results in Western PA. The 10 averaged 7.3 MMcfd of gas equivalent. These well have been broght on since October 2008.

3 of these well flowed 9 MMcfd of gas equivalent or more. The best did 24 MMcfd. Range Resources plan to have 6 rigs operating through the end of 2009.

Anybody have these on their land?

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Permalink Reply by Mmmarkkk on February 11, 2010 at 6:08am
I'm not looking for folks at this time. Just sharing some information on the trends. Glad to see the recruiting is alive and well up that way. Its been slow in H-town for a while. A year or so ago I was getting 5 calls a week, now not so much. Since I'm a 31-year experience guy in management and approaching key dates as related to retirement plan, I'm a little too expensive for most! Another year or so and I will have my retiree lump sum and medical locked in and might be more easily persuaded. I have friends in the accounting/finance recruiting business and this is the worst they've ever seen in terms of their business! I told them they need to find "engineers" and "shale" to replace the accountants and bankers they are used to dealing with!
Permalink Reply by Brian Day on February 11, 2010 at 6:44am
Forced pooling is a horrible idea from a land owner's poin-of-view. Drilling companies love it. See my blog on this website under the blog heading.
Permalink Reply by Mmmarkkk on February 11, 2010 at 12:42pm
Acutally, I've run economics for folks that show that forced pooling works out quite well for a landowner. You get THE BEST WELL drilled (vs having to drill shorter laterals or vertical wells where rates are much less than a very long lateral; and in the proper direction relative to stress fields which enhances production and recoveries); you don't have to pay for the drilling. Once the payors recoup their initial investment, you earn a full interest, not just a royalty interest.

So if you own 20% of a pooled volume, and you decided to lease with a 20% royalty, you would get 4% of the total revenue of the wells drilled. No upfront cost and no deductions. However, if you went unsigned owner in a forced pool, you would get 100% of your 20% after they recouped their drilling costs and after deducting operating costs. The unleased mineral owner would NOT be responsible for plugging costs and would not have any liabilities.

All of this assuming they use the Louisiana pooling laws as a guide. Nothing is being taken from you and generally you'll get your wells drilled faster and more effectively. The only folks who have a problem with it claim they are losing their "bonus" money. Key is that the real money comes in production payments, not in upfront bonus.
Permalink Reply by Ewing Walker on May 6, 2010 at 1:08am
The accidental release of gas and despoilation of wells , etc, is rare.

I would tell you of huge wells in many places that have caused no harm.
Could you give me an example of an untoward event?
I await your replay. Or are you just repeating enviro propaganda.

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