Replies to This Discussion

Permalink Reply by Todd on January 6, 2015 at 1:17pm

Thanks Don!
Here's the link:
http://www.salemnews.net/page/content.detail/id/583126/Chesapeake-r...
Is it me or do the Numbers not add up?

Permalink Reply by Don C on January 6, 2015 at 3:06pm

Thanks for the help Todd.   Why would CHK have to pay a bonus again if its HBP?

Which numbers do you mean?

Permalink Reply by Todd on January 6, 2015 at 3:18pm

The city probably has a Pugh clause in their lease so any property not pooled in a production unit is open for a new lease after the original expiration (primary term).
$1,252,903 bonus payment for 211 acres equates to $5938/acre not $3500/acre.
Can anyone clear this up?

Permalink Reply by David Perotto on January 6, 2015 at 3:23pm

I read it as a small amount of the 211 is unitized and producing (recall 28 acres mentioned). The remaining acreage was not HBP and will be in another unit.

Permalink Reply by Don C on January 6, 2015 at 3:33pm

Does it sound like CHK setting Salem up for an offer they cant refuse?  Free water? I don't know....Im confused.

Permalink Reply by David Perotto on January 6, 2015 at 3:42pm

yeah, now I get it. That payment would be for over 300 acres. The reporter has something mis-reported.

Permalink Reply by Indiana Smith on January 11, 2015 at 7:09am

The city sold water to CHK to frac the Huffman well a few months ago.  Not sure how it was measured or if they ever got paid for it.  It was never reported in the news.  They set up a pump at Spring Valley lake and ran a line on top of the ground to the Huffman well.  It would be interesting to see how much they made.  I think they were contracted to sell at $5 per thousand gallon (or was it $7.50?).  I think a well usually takes about 4 million gallon to frac a Utica well, but this one was about twice as long as most.  So they should have made $20,000 to $40,000 for the water....

Permalink Reply by Kathleen on January 12, 2015 at 4:56am

Seeing this is going to make the 1st ALOV group very happy, right or wrongly. They're up April 2016