looks like an entire revisit of the Flat Castle plan in NC Tioga co. Pa. the long lateral plan is too much for a new conservative management team and a company that has lost so many key employees that showed cutting edge technical skills under Ben Hulberts leadership. we all owe the old Eclipse a nod for bringing the whole e&p industry an incremental step forward. Montage is already setting up to be just another follower. sad day for technical risk taking and very cool engineering challenges.

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regarding previous comment about newest reservoir management approach. ran into a crew last night sub contracted to Rockdale,a small recent startup here in SE Tioga co. they are in flowback on Marcellus wells. the guys specialize in reservoir management techniques and are being increasingly employed by many companys. i learned alot about the technicals being applied on a well by well basis even on the same pad. no doubt we'll hear alot more how eur's increase and decline rates flatten by optimizing well control via technology. very interesting nerdy stuff.

Bo. i never looked into that. i might guess they are mostly private. frankly i don't like the metrics of that particular business mainly due to potentially tieing up capital for long periods of time without returns. taken the same amount of money applied elsewhere would have yielded exponentially more return and i would expect the market would reflect that in stock pricing. that would change if minerals were bought right and returns soon followed. also my opinion and only MY opinion, the mineral business itself would leave me feeling like it was shower time. too much bad ju-ju around here due to long ago OGM separation.

The Mineral sector is chugging along ... The grandaddy of them all TPL has been on a very good run over the last few years ..... VNOM is highly regarded by Creditte Suisse , has a current payout in the 6% range ... KRP has been growing quickly , payout in the 9% range .... VNOM and TPL are Permian , KRP is spread out .... TPL has a water outfit that is doubling in size every year ... Their base in the Delaware  needs a lot of water and needs to get rid of even more water ............... 

 VNOM and TPL have rebounded very nicly from the energy meltdown in DEC ...... 

 VNOM is mostly owned by FANG 

there is a huge difference in the financial metrics between these types of companys and a pure speculative OGM play. each reduces risk by using already producing propertys verses buying OGM's. then waiting for developement. TPL for example since 1888 has many diversified income streams on old land ownership positions. they do however represent a much lower risk to investors and a liquid investment if one was interested. an example of what i mentioned here locally was an elderly couple sold OGM'S to a company within Dominion's storage field several years ago for 1500 an acre. no rental payments go to the buyer, Dominion recieves rental. the royalty is 12.5% minus deductions.  years have now passed while purchaser has recieved nothing and no developement expected for who knows how long. probably a good decision for the couple in this personal situation since several hundred thousand dollars are available to them while in ill health situation. this is just an extreme example of a bad  OGM investment since i am sure others have been more successful. your examples are a good way to highlight the span of risks, from low to high, in this particular space. one thing not discussed is the long term effect mineral separation has on community and familys. folks from WV may have perspective on this. it is evident here and increasing. my opinion.

I own rights to several parcels in NY , just north of the border ... NY politicians have 'stolen' my rights to date ........

 On a slightly different note , a broker in Tioga Pa continues to email me listings , I have noticed a softening in prices ......

 I believe they will continue to soften ......

 Across the Nation , it seems the glory days of land values is weakening . as the money has tightened . 

Mineral stock  KRP got a couple of upgrades today 

Cabot who has done just about everything right cannot get their share price moving ... Tough to invest in gas stocks lately 

exactly. Cabot would have to try to fail with their excellent acreage. that's why Encap may have to stay in Montage for a while. selling their 60% position in any significant amount would drive the share price down quickly. a full cash buyer would solve their problem, or Flat Castle sold separate. sum of parts worth more than the whole. Montage web site talks about strategic acreage increase but that could be just blah,blah, blah.

Plenty of outfits  share prices are being discounted versus  land values , the market doesn't seem to care , and I also sense land values have softened considerably across the board .Even the mighty Permian seems to have softened with water concerns and EUR's overestimates 

How would you describe today`s climate for E&P companies?  First they over produced and caused a glut, then midstream pipelines were needed for takeaway capacity, then markets needed to be created which seems to be have done...now what is hampering more spirited growth?   When will this industry take-off again?

Producers / Energy in general are out of favor on Wall Street ... 

 Production keeps growing , yet inventories remain low ...... 

 Permian is growing quickly and its 'stranded' gas will not be stranded for long ..... 

 STACK which trends gassy is also growing ...... 

 Finally to cheer up Gas Bulls , Canadian Gas  sold for below $1 last summer ........... 

 That being said I continue to be fully invested in the sector 

e&p's i believe will have to operate under a low price environment using internal cash flow for expansion for the forseeable future. the industry is now in the factory like developement stage where the bulk of assets have been more realistically priced and the "hot" money has begun to dry up. the power/gen use side begins to dispatch coal gen when NG begins going over 3$ which reduces demand on that side. coal is still @ 30% grid power, so it competes. thermal demand is slow to increase as pipeline buildout to NE is politically constrained. LNG is the projected growth area for foreign sales but will also be price sensitive at somewhat higher levels. until latest nuclear tech. is accepted over renewables, e&p,s will continue producing by cost optimizing and increasing well production via technology. more production for less dollars spent allows the demand side to increase while allowing profitability in a lower price environment. low prices with increasing demand and profits all must combine in commodity production models. however it is not a great investment space because of tight margins. huge volumes @ low prices.


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