Lawrence County 2014

Another year is upon us and we are all starving for information pertaining to the "gas biz" in our county.

Hilcorp appears to be poised for an extremely busy year.

Shell seems to be dragging it's feet for some reason , even though the Cracker appears likely to become a reality.

Hopefully more infrastructure projects will become known as the year unfolds.

Please share any news with us you may uncover over the course of the year.

Good luck to us all and may 2014 be the year that puts us on the map!

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Replies to This Discussion

Permalink Reply by james on September 17, 2014 at 1:47am
Landowners are screwed if they want to sign a good lease right now, unfortunately Hilcorp and Rex are not paying much or competing with each other so the prices are going to suck until another company comes in and drives prices up.
Permalink Reply by james on September 17, 2014 at 2:09am
The only way prices are going to go up is if landowners reject the low offers they are currently offering, they tell everyone that they have thousands of acres and can drill without you, but why did they approach you if they don't need you? They need the landowners more then most of us need them, no landowners signing up for low leases makes it tougher for them to complete their units. They just try to scare landowners and make them think they will be left out, maybe someone with only a few acres might be left out but most landowners will get a better lease if they are patient IMO.
Permalink Reply by Rich on September 17, 2014 at 5:01am
I have 24 acres along with 28 acres that my 2 neighbors have. We are sticking together to get the best deal we can. They will have to deal with us eventually. And after hearing that the Marcellus wells on the patterson well has such a high BTU it has to be mixed with the two Utica wells befor the put it in the lines!! They are making a lot of money!! And they have those wells chocked back over 20%!!
Permalink Reply by Trapper on September 17, 2014 at 5:22am
Good luck to you and your neighbors.
What is the btu of Patterson gas? I don't recall ever hearing that. Do you think those two tanks are for NGL? I hear that tankers come periodically to empty them yet there is no reporting on Dep site.....hmmm.
Permalink Reply by Rich on September 17, 2014 at 6:30am
Hey trapper! Wasn't told what exactly the btu's were. Just that they were so high it has to be mixed with the dry gas from the Utica.
Permalink Reply by Trapper on September 17, 2014 at 6:59am
Thanks Rich. Maybe those are brine tanks then. Shame the liquids are being sold so cheap!
Permalink Reply by Rich on September 17, 2014 at 7:51am
Your welcome. Let's hope we all have that problem. That's why your royality % is so important.
Thanks Rich
Permalink Reply by Rich on September 17, 2014 at 10:12am
Hi KAR. One good thing is there is MILLIONS of dollars in the ground here! And there business is gas & oil so for them to do there business they need OUR gas and oil! We know it and they know it. So they can drill where ever they want! They have to come back sooner or later!
Permalink Reply by KAR on September 17, 2014 at 10:43am

Evening Rich,

I think there is a lost thought here... There is no law saying these wells need drilled. Money spent has already been spent and are sunk costs... If the O&G companies run the numbers and deem a well un-economic it will not be drilled/completed. That means the landowners get absolutely ZERO royalties, bonus payments... etc. In the end I don't blame anyone for trying to get as much as they can... I know I would. However, if it costs too much and profits can't be made no one will get anything because they are definitely not going to spend money to lose money. 

Permalink Reply by Trapper on September 17, 2014 at 11:10am
That's OK , if the price of doing business gets too high in north or little beaver , there are hundreds if not thousands of contiguous acres in new beaver borough now leased by Rex that they can drill away on! I just happen to have a beautiful piece of old strip mine that would just love to host a pad! ;-)
Permalink Reply by Rich on September 17, 2014 at 11:26am
KAR hey, I agree that any buisness has to make money. Or it's just not good buisness! But as a buisness owner my minimum profit to justify the investment is 30%. These are the same standards by which the O&G co. Conduct buisness. With that said they are making a lot more than 30% on there investment . That's why I know they are not going anywhere! I have talk to landowners in other shale plays and some of these people got 10-12,000 per acre with 25%royalitys. And those shale plays are no were close to being as prolific as the ones we have here. So I can say with almost 100% certany that they will pay a lot more then what they are offering now!
Permalink Reply by Jim Litwinowicz on September 18, 2014 at 2:50am

Rich; You may be right but I doubt it. When you see the big numbers in other shale plays you have to look at the timeline of those offers. The Barnett and Hainesville shales got huge numbers ten years ago for a couple of reasons.  One, the price of nat gas was over $12/MCF and a lot of experts were predicting $15-20.  At those prices, companies could pay high bonuses and royalties and still make huge profits. The world is in shock that the price is now at $3.50!

Further, back then HVHF was still new and  no one knew there would over 35 shale plays in 26 states that they could develop.  They didn't know the Marcellus would become the second largest gas field in the world. There are so many fields now in play that it has reduced the offers for leasing dramatically.

Last but not last, it is competition that drives prices up. When there were several companies looking to lease in the same area, prices went up.  But now in W Pa, most areas are leased and the companies have defined areas where they operate.  That means they have no competition within those footprints so they have reduced their offers. And there is so little unleased land that no new companies will move in.

I feel bad for those that listened to Fang and Ron and did not sign when the offers were higher.  Those two and a few others kept saying just hold out and prices would continue to rise.  But if one looked at other areas, they would have seen that prices spike when companies are competing and then drop quickly once the have defined footprints.

Maybe you are right and they will offer more to some holdouts. There may be a few success stories for parcels in critical locations but I think they will be rare. Best of luck to you and anyone else that hasn't leased.

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