Venango County is in WET GAS!!!!!!

I reside in Cranberry Township, Venango County, PA.  We are clearly in the "Wet Gas."  This wet/gas line has been modified from original assumptions   I believe it has moved east due to the recent drilling and testing throughout the county and the bordering counties. This should make it very profitable and easier to transport.

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Permalink Reply by Lance Nimmo on January 31, 2013 at 1:56am

Fang, I think you are on to something here. I have to chuckle at the people who think the $4 acre was what the original companies thought it was worth. The picked the low fuirt first, and then worked their way up the tree.

Permalink Reply by Jim Litwinowicz on January 31, 2013 at 6:02am

Fang; I agree with most of what you said. They will play games to get the best prices and terms for themselves, not the landowners. But there comes a time when most land is leased and the companies have established their areas of interest.  They will then not compete with each other and prices will drop. Its good to hold out as long as a substantial number of others are also.  But if you hold out too long and are among the last you may get a lower bonus and/or royalty and worse terms.

Many areas have already reached that point.  In Greene and Washington Co, many people have leases that are expiring and are getting very low offers. Prices have dropped in Beaver where CHK is king. I expect Lawrence Co offers to drop soon.

Mercer, Crawford, and Venango have enough unleased land and enough companies still leasing that prices should hold there but this is all my opinion. If you have an offer with substantial acreage (>50 acres) consider the risks if waiting and ending up with an offer much lower than $3000.  If you can afford the risk of losing half the offer than by all means wait as long as you want.  Just don't cry that you got screwed if you end up with a lower offer.

There are lots people on this site that will tell you they waited too long and left a lot of money on the table. Each person must make their own decision and I will not tell anyone when is best to sign.  Only they can decide that based on their individual financial situation and then hopefully live with no regrets if someone else gets more or if they waited too long and got less. Flat out telling people to wait is wrong for know one can predict with any certainty what future offers will be.

Permalink Reply by Jack F. Moreoil on January 31, 2013 at 6:24am

Jim; I agree with you 100%.....you are spot on. Everyone has to make their own choice whether or not to sign or wait.  If you wait too long, you may miss out on higher bonus and royalties; but again...who really knows what the future holds!  

 My recommendation is to concentrate on the royalties; but you do want to get a decent bonus.  Just be smart and don't let greed get the best of you.  Also, please seek a good oil and gas attorney before you sign any contract.  If a landman says the contract language cannot be changed; walk away from the deal.  That is BS!  Everything is negotiable within reason.

These are just my 2 cents....for what it is worth

Feel free to ask for help

Permalink Reply by p umpjack on January 31, 2013 at 2:08pm

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as the infrastructure develops so will the technology

 

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Permalink Reply by Jim Litwinowicz on February 1, 2013 at 5:50am

$4000 is a pretty safe bet for you since Halcon already paid $3850.  You keep saying they will pay a lot more .... $150 ain't a lot more.  And why should people wait two years and risk having their offer drop just to get $150 more?  Even if you take the Shell offer of $3000/acre is it worth the risk to wait two years to get a $1000 more when you may also get a $1000 less.....or worse?

History is not on your side.....nor is it on my side. I actually don't have a side because I don't pretend to know will offers will go.  I merely tell people to consider all risks and decide for yourself when to lease. I never tell people that there is any certainty offers will go up or go down. Each must look at heir own situation and decide for themselves.

Our groups do not require anyone to sign any offer.  If they don't like it don't sign. If you think you can get more by waiting, don't sign.  Sign only when you are comfortable with the total lease.....bonus, royalty, and terms.

Permalink Reply by Jim Litwinowicz on February 2, 2013 at 10:01am

Fang I also said that there is enough unleased land in  Mercer, Venango, and Crawford that prices should ho;d.  Several different companies are still bidding, they may even go up. But in Beaver and south prices are dropping. Lawrence and Butler may have peaked and may drop soon.  By your advice people in those two counties should hold out to the end. I say they need to consider all factors and then decide what is best for them.

Permalink Reply by John Stanton III on February 2, 2013 at 12:08pm

Jim, Who are these companies that are leasing in Venango?  I  know several landowners who will sign if offered a good lease.  

Permalink Reply by Lance Nimmo on February 1, 2013 at 3:16am

Jim, I think it come down to acreage too. If you have 100+ acres, I don't think the sky is falling. They have a lot more to lose than the land owner.

Permalink Reply by John Stanton III on February 2, 2013 at 12:05pm

Jim, You mention that enough companies are still leasing and that prices should hold in Mercer, Crawford, and Venango.  Who are these companies, and where are they leasing??  It was my understanding that most companies have moved from the leasing phase to the development phase.  

Permalink Reply by Jim Litwinowicz on February 2, 2013 at 3:48pm

John; didn't mean to imply that one could go out and sign a quality lease tomorrow.Companies often reduce leasing activities late in the year and resume leasing after new budgets have been established.

There are at least seven companies drilling wells in the area. As soon as they have better data, they will resume leasing......as long as the data is good. And with that many companies all active and none having dominance the offers should be pretty good.

The NAPE is next weekend. Maybe a new company or two will be interested in these counties.  After all Halcon has stated in their presentation to Barclays and to energy reporters  that this an excellent area with wet gas.

Permalink Reply by John Stanton III on February 2, 2013 at 3:23pm

Another permit for a deep well in Richland Township...

Permalink Reply by Brian on February 3, 2013 at 2:48pm

Chevron was just adjusting the depth they will be drilling the 2H well on the Brosius pad.

They adjusted the TVD of the second well by about 20-30 feet, probably based on what they saw when they were drilling the 1H.

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