Replies to This Discussion

Permalink Reply by Elnathan Cory on January 9, 2013 at 4:24am

I am sure M+P is working on this because it is to their benefit as well as the Sandy Lake Twp group. Halcon is one difficult company to deal with in my opinion. 

Permalink Reply by Berk on January 9, 2013 at 4:36am

From Halcon's December investor's briefing: Read the last couple sentences. I copied and pasted the below right from their document. 

   

Acreage: It is very difficult to take several swathes of differing land rights and apply valuations thereto that, in aggregate, can be taken to the bank. That reality must be kept in mind when reviewing these approximations.

• Williston, 136k acres @ $7.5k = ~$1bn
• Woodbine/Eagle Ford, 200k acres @ $7.5k = ~$1.5bn
• Utica/Point Pleasant , 130k acres @ $7.5k = ~$1bn

The Williston acreage spans a number of sweet spots including 'the prolific Fort Bertold area'. Additionally, Halcón's Williams County acreage is just north of where Continental (CLR) announced Monday, December 3, its game-changing Three Forks 3rd bench well, Charlotte 3-22H, with some likely positive consequences for Halcón. Overall, $7.5k/acre should be low-side for the Williston acreage. As for Woodbine/Eagle Ford, $7.5k/acre is low compared to prices paid in the recent past. In the Utica, the current price for non-core acreage is about $5k/acre and core segments like Point Pleasant can be valued at $15k/acre in line with recent monetization transactions by Chesapeake (CHK). Against these parameters, the $7.5k/acre should be conservative for Utica/Point Pleasant.

Permalink Reply by ShaleAdvice (Steven C. Townsend) on January 11, 2013 at 4:51am

Brett,  Send me an email invite to discuss your options. 

Permalink Reply by john on January 9, 2013 at 6:48am

I was at the meeting in Stoneboro on 1-7-13. Basically they said Shell is the only player in those four townships and Shell will not work with landowner groups so we had 3 options.  1. sign and get out of the CX -Energy marketing agreement completely and deal with Shell individually.  2. sign and get out of the agreement with CX but keep M+P on as legal representation to work a deal with Shell on an individual basis or  3. Stay in the group and see what happens, which they stated they felt Shell would be the only player in the foreseable future due to all the land HBP from old Vista leases that Shell purchased. So basically i think most of us are out of the group in one way or another.

Permalink Reply by Elnathan Cory on January 9, 2013 at 8:19am

I guess everyone in that area will be in touch with Shell at some point. Good luck and no matter what you will be leased by some company sooner or later.

Permalink Reply by Jim Litwinowicz on January 11, 2013 at 5:07am

john; pretty good summation of the meeting.  Shell is leasing is in those four townships but will not do a group lease.  They will negotiate with individual landowners.  Cx felt that it would be best to allow people out of their agreement since Cx couldn't do anything for them and didn't want to deprive them of the opportunity. The landowners have the option of having M & P represent them or go on their own.

Each landowner will get separate offers with varying numbers and addendum.  It will be up to them to decide if the lease is acceptable or not. I wish them all the best of luck and hope they all get an offer that satifies them.

Good luck.

Permalink Reply by Berk on January 11, 2013 at 5:11am

Jim,

What's with the wall between Mercer county and Crawford county? Why is there activity in northern Mercer county but absolutely dead in southern Crawford?  Any insight?

Thanks

Permalink Reply by Jim Litwinowicz on January 11, 2013 at 5:29am

Halcon has tow permits on the southern edge of Crawford near the Ohio border. Range has one near Cochraton. There may be some infrastructure issues. maybe the leases in Crawford are too scattered for units as of yet. I know a lot of land in Crawford has yet to be leased.

Permalink Reply by JohnL on January 11, 2013 at 6:01am

Jim-  can you share any information regarding Halcon and the Sandy Lake twp members?  I heard that it was discussed at the January 7th meeting.  I have been unable to get even a return phone call from M&P. 

Permalink Reply by Jim Litwinowicz on January 11, 2013 at 6:12am

All I know is that M & P has been working on the gas storage issue and thinks they have it solved but not sure if Halcon will accept what they have done. Hope to know more in a week or so.

Permalink Reply by JohnL on January 11, 2013 at 1:58pm

Jim- that seems to fit the rumors that I'm hearing that M&P has resolved the underground storage issues and that Halcon is on the fence as to whether they want to proceed with leasing in Sandy Lake twp. Given Halcon's track record so far who knows what will happen.

Permalink Reply by Brett Allen Morgan on January 11, 2013 at 2:35pm

For what it is worth another one of my neighbors who has 29 acres just received their check from Halcon 2 days ago. Also one of my clients from Greenville said his friend who lives in Greenville was paid also. In addition I was looking over the Halcon report from the 2013 Global Energy Conference that Berk posted. What I found interesting was the History Time line on page 49. All through the time line it remarks about different acreage acquisitions being closed. What particularly caught my eye about that was the fact that in June 2012 the Time line says that Halcon "Closed the acquisition of 27,000 net acres in Ohio prospective for the Utica Shale for $164 million" But NOWHERE did it say that PA acreage acquisitions had been closed. That seems to indicate they are not through with acquiring leases here yet. I find that hopeful for many of those outstanding leasing to be funded.

Attachments:

• Halcon_GoldmanSachs_vFINAL2.pdf, 4.1 MB

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