Utica

Tell me all you know about it.... I have read a couple of articles that have said compnies like CNX/Dominion are not going to be putting up new wells this year because they are heading for the utica, investing(i think this is the right number) 1.1 billion dollars into exploring that.  The uticia is underneth our land as well...which do you lease first  and can you get a compny to lease both?

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Permalink Reply by craig on May 16, 2011 at 1:01am

In Beaver County Chesapeake has been/is only signing leases that include all formations, to my knowledge. 

Since you are in SW Pa, i'd have to think they don't want to miss the land grab where the Utica has been or is being proven to have oil/wet gas. Maybe infrastructure has something to do with them moving at this time, as well.

Personally, my gut feeling is that they now know that there is oil in the Utica in some places and they need to get as much leased as possible in the shortest amount of time to avoid paying high$$/acre prices that will be coming.

Permalink Reply by scott jackovitch on May 16, 2011 at 9:10am
I agree Craig.  The Buell well near me in Harrison county OH is rumored to be producing oil. Some are saying over 1000 barrels of oil and between 15 and 25 million cubic feet of gas per day. We are not far from SW Pa. I believe that CHK is keeping a tight lid on what they have found. In my opinion they will not release any info until they have grabbed up all the land they are after.  Once they have then they will probably release the info to raise the value of their leaseholds. There is a good link on the Ohio DNR mineral resources website which shows where they believe the line of gas,wet gas and oil lies within the Utica.
Permalink Reply by GBrewer on May 17, 2011 at 4:00pm

could you kindly post a link to that map?  thank you!

Permalink Reply by Robert Chiasson on May 19, 2011 at 10:37am

Here is the link:  http://www.dnr.state.oh.us/Portals/10/Energy/Utica/Utica_SourceRock...

The maturity info (gas vs wet gas vs oil) is on page 8.  Pages 5, 6, and 7 have estimates of Total Organic Content (TOC)

 

Permalink Reply by Quincy Spitzer on May 18, 2011 at 3:54pm
I am located in South West NY (Allegany County) I believe I am in The "WET" Utica Area. What are your thoughts about this geology vs the Harrison County Utica? Do you feel that NY will be the next area to get leased for the UTICA when they lift the ban?
Permalink Reply by NY Gas Rights on May 25, 2011 at 12:11am
No, the Utica is not going to be a strong target for any leasing in NY. It's only showing marginal results for Nornew. Western New York is a problem area becuase of all the shallow wells. The leaseholds now are only going to be filled in for the Marcellus in the Southern Tier.
Janice Lanphere HancharickPermalink Reply by Janice Lanphere Hancharick on June 4, 2011 at 12:41pm

Zach, In the past couple weeks I received numerous calls re: lease renewal offers in the 4-County area to which you're referring.  A few on the NY side have been on leases that don't expire for 1 to 1 1/2 yrs. from now.  Offers like $5 more per AC on original offers that didn't top $50 are out there.  Rights owners that are disinterested get an additional one time offer of  a lump sum ... $1,000.  Landmen say the wordage has changed abit, but don't elaborate!

Other tactics are much crazier.  The fact that these renewal offers are being put out there so early seems indicative that NY activity will be back on track sooner than later.  Last known deadline is July 1st.  Unleased rights owners are being told the moratorium will go on forever so if they want "anything" ... in other words they are being poor-mouthed when they really have valuable OGM's.

You are correct in recognizing  our area HAS "wet" gas, meaning it contains many components that can be separated out in the processing stage and marketed apart from the natural gas.  This has been confirmed by those actively drilling in 4-County's region. It results in a much more profitable outcome for gas companies ... why not rights owners?

We're fortunate that this region is also a known oil producer.  In professional drilling journals this week , it was announced that the newest technology to extract oil and gas at the same time with greater efficiency has recently come into play and will make a stronger positive impact on our shale play than previously thought.

Utica has become an accompaniment to Marcellus in our region for at least 2 reasons: our Marcellus only runs 50' - 150' thick, and they can be drilled on the same wellpad. 

The extent to which pipelines have expanded across our state lines (NY/PA) is an excellent sign that wells will be drilled more than ever and the product will get to processing plants and markets at a faster rate.

Will the public radar ever be as sharp as the companies'?  I doubt it, but we're learning their tricks and staying hot on their trails or tails (take your pick!) to do the best by our various Group members.  A lot is happening!

 

Permalink Reply by Quincy Spitzer on June 4, 2011 at 5:58pm
Good Evening,  I also believe that the technology is getting better everyday to convert natural gas into liquid gas to use in vehicles etc..I dont think we that far away from seeing natural gas fill up stations for vehicles and equiptment.  It looks like to me that the south western area of Allegany county may be the sweer spot, however most of the county looks good for the Utica. I was approached by a local Oil & Gas co to lease for 50 per acre w/ 15%. I am not sure what the very near future holds for us with the Moratorium, only time will tell. 
Janice Lanphere HancharickPermalink Reply by Janice Lanphere Hancharick on June 4, 2011 at 6:56pm

Zach, part of the info I shared in my last comment came from drillers active specifically in 4-County's region. Yes, Allegany is sweet!  $50 @15% is so out of line. It's already June 4th.  Just see what happens on July 1st.

Don't sell the value of your AC short. 

Permalink Reply by Jim Litwinowicz on June 4, 2011 at 7:14pm
Can you tell me what journals are talking about new technology? And what this new technology is?  If they can get more/both oil and gas, that would be big news.  I have been told that lease in the 4 county area are at $2500/ac and up.  But the NY moratorium may have an affect on NY offers.  I'd wait til July 1 and see what happens.
Janice Lanphere HancharickPermalink Reply by Janice Lanphere Hancharick on June 5, 2011 at 9:28am

Jim, Besides running the 4-County Group (Cattaraugus & Allegany in NY,  Potter & McKean in PA), I use the following list of sources to keep as up-to-date as possible.  I share highlights with GMS and those in the Group's area.

Wall Street Journal, Oil & Gas Journal, PA Environment, Marcellus Shale Coalition, Penn Energy, Bloomberg News, Green wire, Marcellus Drilling News, America Energy Forum, & a Google Alert site just for shale plays and related news.  It is the latter that ties me in to newspapers throughout our country.  There are others I read but these will keep anyone busy!

As for the technology, as you peruse these sources you will learn there is much that doesn't reach the public right away.  I don't believe anyone can know it all, partly because the facts change so rapidly.  I often count on GMS to educate me as much as I share what I've learned.

5 wells on a wellpad is totally do-able, and Marcellus-only leases only work in THICK  plays.  Utica is oft combined nowadays.  The layer below it is the Herkimer I believe, but let's keep the companies focused on what they can handle now.  

Permalink Reply by Jim Litwinowicz on June 4, 2011 at 7:25pm
<I>It results in a much more profitable outcome for gas companies ... why not rights owners?</I>  It does result in higher profits for the landowner.  Thats why you get a percentage of the royalty...the more money they make, the more money you make.  It is also why it is more important to get a higher royalty % in your lease than it is to go for a higher bonus.

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