Replies to This Discussion

Permalink Reply by Philip Thackray on September 10, 2013 at 12:51am

FMV,

How did I meet the guy steering the drill?  I know the land owner.  I also had a tour of the XTO Hicks road cryogenic plant.  That place looks like space dock for the star ship Enterprise!

Lot’s of variables for sure FMV but is possible that the Net Present Value of a well’s income stream in time may be greater if the sales start a few years from now.  Of course, it could be less also.  The dates 2016-19 span a time when I think a LOT of infrastructure - transport, export, power stations, transportation use, crackers, perhaps gas/NGL to diesel/jet fuel etc – might have a strong effect on prices.  There is 3 gallons of ethane per wellhead Mcf currently being “rejected” into the methane stream and sold as natural gas.  If ethane rebounded to a $1.00 a gallon, that alone is quite a bit of upside.  But the Mark West pipeline to Sarnia, Canada (cracker plant) will not do that.  Perhaps a local cracker will.  Similar stories could be told for each of the wet components.

Or we may just continue to out produce demand and prices will be in the tank for years.

 

Cheliped

What FMV said plus very limited infrastructure, pipelines, cryogenic plant, compressor station .. what else I don’t know.  Everything I have heard about the wells that Shell has drilled is good but they may still leave the area for other reasons.

Regards,

Phil

Permalink Reply by Philip Thackray on November 8, 2013 at 5:39am

Rex has added two more Upper Devonian / Burkett wells to their company presentation.  See page 16 here.  The Stebbins 2H and Perry Township 1HD

Phil

Permalink Reply by FairMktValue on November 8, 2013 at 12:31pm

Phil,

Am I correct is saying that the per day numbers for all the wells look pretty good?

Permalink Reply by Philip Thackray on November 8, 2013 at 3:07pm

FMV,

I think that the "super rich" numbers are hyped.  As you go west - towared the younger "super rich" areas the Marcellus and Upper devonian shale are thinning.  The production volumes "thin" as well.  Rex's best wells are to the west - Lynn N&S in the Marcellus and Stebbins 2H in the Burkett are to the east in keeping with the latest Range information.  Where you are in Middlesex is very hot - perhaps not real "wet" but I think just "BTU" will have great value.

Regards,

PHil

Permalink Reply by Philip Thackray on November 9, 2013 at 1:35am

Correction:

"Rex's best wells are to the West" should read: "Rex's best wells are to the East"

Phil

Permalink Reply by GM on November 9, 2013 at 4:45am

Have you guy's heard any production numbers out of XTO's marcellus wells in the Butler, Forward, Connoq, Penn twp's? 

Permalink Reply by Philip Thackray on November 9, 2013 at 10:04am

I do not have any per well numbers and if I did, I’m inclined to let XTO release those as they are required to do so or choose to do so.

In general, I have heard the following.  XTO is very happy with what they are seeing.  XTO plans to drill 50 wells next year (that one is a bit hard to believe but there it is).  The load at the Hicks road plant is near the limit of 125 million cubic feet per day.  In the spring they will build out another cryogenic plant on the unused half of the Hicks Road plant.  Rumors of plans for plant #3 (and #4?).  NGL’s are leaving by truck to Houston, PA and the Gulf Coast.  Repeat: that is what I have heard.

Regards,

Phil

Permalink Reply by FairMktValue on November 9, 2013 at 11:36am

Phil, and anyone else that might be interested......

http://seekingalpha.com/article/1812872-rex-energy-management-discu...

Rex earnings call transcript - quite a bit more "color" as they call it on the Upper Devonian/Burkett.

Rex appears to be very pleased at this point - and in 2-3 years I think they are "dancing in the streets". lol

As for XTO - I would say what you "heard" is likely very close to the mark.

50 wells drilled next year - if they can come up with the rigs, I can believe it. Lotta infrastructure in place already.

Hicks Rd plant - I believe that quadrupling production is built into their plan long term. Recall a Butler Eagle story when they first opened - plant mgr stated something to that effect.  I can confirm the tankers leaving the plant . Seems every time I am up Rt8 that way I see them pulling out on to 8. Big shiny ones, not water trucks! 

XTO will be "dancing"first. lol

Very positive news for Southern Butler Co. methinks.

Cheers

Permalink Reply by GM on November 9, 2013 at 12:41pm

Thanks Phil & FMV, confirms what I have "heard" as well. Didn't mean to hijack your topic, thanks again.

Permalink Reply by FairMktValue on November 9, 2013 at 12:59pm

"hijack" - Not a chance - we need lots more people posting !

That makes three of us that have heard about the same thing.

That makes it almost a "true fact" !!  lol

Cheers

Permalink Reply by Philip Thackray on December 1, 2013 at 5:08am

Upper Devonian update from Range presentation Oct 29, 2013:

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