Vista Resources applying for drilling permits in Venango County (80)

Someone posted that Vista wants 80 permits in Venango County.  My thought is they just want to hold your land with a conventional well (shallow).  From my understanding Vista is not too active in the unconventional wells, if at all.  Any thoughts from the experts??? Happy Holidays!!!!!

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Well if that is what they want to lease than they should agree to:

Limited to the Medina Sandstone Formation (From 200' above top of the Lockport Formation to 100' below the bottom of the Queenston Formation).

That's not all they want. You sign a lease without that Addendum or something close to it and they will assign the other formations. Getting at least $2000 an acre and 5.5% "Overriding Royalities" (12.5%+5.5%= 18%). It may take them years to get that but they probably already have an idea of how long. Of course a company like shell may just buy the whole company. Like they did with East Resources.

Tim:

100% correct! Vista like all O&G companies will try to lease property on the most company favorable terms it can get. Standard O&G company leases are landowner unfriendly. They were drawn up by well-paid O&G attorneys to benefit the O&G company. Before signing any lease one needs to read and understand what strata are being leased. One also needs to understand what each term of the lease means. I would advise every landowner who is presented a lease to consult an attorney who is well versed in O&G leasing. I think you have described quite clearly what Vista or any other driller of conventional wells would do unless the lease excluded specific "deep gas strata". You seem to know a lot about the geology. Can you recommend a book, or perhaps a website where I can familiarize myself with the local geology? My property is in western Venango County just up over the hill from Utica, and a bit east of the Georgetown Road which is old 285.. I have received conflicting opinions about whether one should lease the "shallow gas" or the deep gas first. I believe that the Marcellus is insufficiently deep in my area to be commercially viable, but if I leased the "shallow gas rights", I would wish to reserve the Utica and any deeper strata. I will end by  again stressing the need for a landowner to be represented by a knowledgeable attorney before signing any lease!     

Tim,

I agree with you and Samuel, 100% correct. I would like you both to read my last post.

 

Samuel,

 Best place to start is Pa. Department of Conservation and Natural Resources. I started with the Educational Series 8 (ES 8). It's written for school age kids so I could get a grasp of it! I probably read it at least 3 times and still use it for reference. Than I started looking at about everything on their site. You'll find better data points for Venango than I did for Washington. 

  Than I started to google about specific formations.  Keep in mind that when you find old reports, I have stuff from early 1900's. Even stuff from far away states  have useful info.

  This is not just a hobby but a second job!  Thing is so far this second job paying better than my fulltime one.

Tom,

Believe it or not, we understood all of this before we replied. We have so many Medina wells around us its crazy. Yes, in our area the Marcellus is above the Medina. Also, the Marcellus is so thin here its value is all but non-existent. We were truly only looking to reserve below the Medina.

It would have been wonderful if Vista's initial response would have been something on the order of what you posted. That would have been the beginning of negotiations!

I still think you will ultimately get a lease and probably a rather decent onet. Leasing budgets for this year are pretty well used up. I have a hunch that most, if not all, of the exploratory wells will have decent production numbers after they are drilled, fracked, and rested. When enough wells have proven results, I believe O&G companies will loosen their wallets and leasing will pick up. I am hoping to see some really substantial leasing activity in July or August 2013. It could be a bit sooner or a bit later. These are just my speculations, but they are not unreasoned.  

Marcellus non existent?  What are you basing that comment on?  Please expand?  What makes you think that. Have you checked out the maps from Penn State?  Maybe not as thick as some areas but from what I can see, viable.  

The Marcellus is present but it is not very deep or very thick in Venango County.  It will be economical one day, probably at $6-8 gas.

From what I know, the Marcellus has varying thickness in Venango. Some areas it is > 100' thick, others < 50'  And what is there is wet which is good.  What most likely will happen is that companies that drill horizontals into the Utica will also drill into the Marcellus. Once you have the pads, the pipelines, and other stuff in place it is more advantageous to drill both strata. Add in the potential for drilling the Upper D and maybe even the TBR and it could be quite good over the next half century or so.

UPDATE ON VISTA  IN VENANGO COUNTY!

Since I was the one who started the conversation about Vista's holding 131 of the  300 new O&G drilling permits for 2012 in Venango County, I have done further research. Fully 104 of those 131 permits are located in the extreme southeast corner of county in Richland Twp. Population of that twp. was I believe 777 in 2008. Maybe wrong about the year. Land area of the twp.is 22.4 miles. Perhaps some of you Venango County natives are familiar with Richland Township. If you know why Vista would apply for so many permits in this part of Venango County, please post. Even educated speculations are welcome. 

It could be something as simple as that is where they have leases about to expire. Any idea if they have been signing new leases here? Could be because they know a new pipeline is going into Richland/Rockland. Maybe its that seismic has shown this is the best area for shallow wells, which is what Vista does.

Looks like shallow oil.  Operators tend to drill these wells in programs of 10 to 100 wells for economy of scale.

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