Comment

Comment by JohnL on March 21, 2014 at 3:16pm

I see Hilcorp has recorded over 100 new O&G leases in Mercer County over the past 3 weeks. Seems like they have really picked up lately.

WTF- there seems to be more Coolspring TWP leasing recently. Have you heard any rumors?

John

Comment by Elnathan Cory on March 17, 2014 at 3:51pm

Hilcorp may have something! Maybe the stratigraphy in PA is not prone to the earthquake problem that is occuring in Ohio and thats why they leased so much over here and are going to drill a lot here this year. Hopefully this will drag all the others over here too! This earthquake problem has not occured in Mercer, Butler, Washington, Greene, or any other counties in WPA as far as I have read. 

Comment by Jim Litwinowicz on March 13, 2014 at 2:37pm

Is this a good/bad sign for the proposed Shell cracker plant?  I'm not sure but I think there are two positive aspects to it. One, Shell wouldn't be selling its shale assets if they thought the price of gas and constituents was going rise in the next couple of years. But a low price of the feed stock for the cracker plant would be a good thing.If they feel prices will remain low for many years, that would give them confidence in the feed stock supply at a stable price point.

In addition, a few months ago, the CEO of Shell stated they cannot afford to build all three projects they were considering. They have since cancelled one in La.  Selling lease assets may help raise cash to build the cracker. 

Comment by Jim Litwinowicz on March 13, 2014 at 12:57pm

It seems that large multi-nationals are not nimble enough to be successful in shale gas.  They move to slowly to acquire properties, they do not control costs as well, they are slow to adapt to new fracking/drilling/completion techniques like smaller nimble companies.  They have so much bureaucracy that it takes too long to get permission to make the necessary moves. Further they have a Board of Directors and investors that demand a high ROI on a quarterly basis. Dealing with multi-nationals is almost as bad as dealing with governments.

Smaller companies can move much quicker.  The right info gets to the decision makers quicker and they are empowered to make decisions with less deliberation. Unconventional shale gas is still in its infancy.  Only those that can adapt quickly to the changes that come along will succeed.

Comment by Samuel J. Orr on March 13, 2014 at 12:54pm

I typed rather fast and apologize for the obvious errors in my post below.

Comment by Samuel J. Orr on March 13, 2014 at 12:52pm

Patience: 2 to 5 years may be necessary for the price of natural gas to increase along with the demand. LNG shipments to Europe will happen but plants to liquify natural gas need to be built along the Atlantic coast. These plants are expensive and will take time. Pipelines also need to be constructed to carry gas to these facilities. Locally, more pipelines need to be constructed or extended in Mercer and Venango Counties. 5500 cubic feet of natural gas is one barrel of oil equivalent or 1 BOE. Gas is $4.50 / 1000 cubic feet or $24.75 / BOE. Therefore O&G companies will maximize their returns on investment by drilling only where they believe there is oil in commercially viable amounts. If such wells produce  some gas in addition, thatis icing on the cake. Oil has an additional advantage because it can be hauled from the wellhead in trucks. Therefore, the lack of pipelines is not much of a problem if a well produces oil. Per BTU, a company can sell an Oil BTU for 4 times what it sell a Gas BTU.  Market conditions are what accounts for the lack of interest in drilling wells in areas wherethe geology suggests that only gas is likely to be found.

Comment by deer spotter on March 13, 2014 at 11:30am

Shell to reduce United States investments by 20% in 2014

Comment by JohnL on March 13, 2014 at 11:25am

JR- you might want to scratch Shell off your wish list of companies to buy up Halcon's Mercer County leases. I hear that Shell has 80,000 acres in a Butler and Lawrence counties due to expire this year. I'd say odds are not in favor of them renewing any of them. I wonder what impact this will have on the cracker plant?

jl

http://money.msn.com/business-news/article.aspx?feed=OBR&date=2...

WTF- this article supports small companies like Hilcorp. They must know something the rest don't. It's hard to keep up with all of their permits. Seems they have shifted some toward the SE part of Mercer County.

Comment by WTF on March 13, 2014 at 8:36am

The CALM before the STORM!!!    To all you doom and gloomers, If you think there is no activity going on in Mercer County try this. Go into the MERCER COUNTY GOVERMENT homepage and click land records search, Then click on search records next click on sign in as a guest. Click on the acknowledgement (this is free). After that fill in a company name where it asks for last name/firm name. Try Hilcorp or Chevron or SWEPI or Bounty minerals or etc. next fill in the dates you would like to search from. Try going back to October 1st, 2013 to todays date. Click on search results. You will be amazed at the amount of activity that is taking place in this county in the last five months. We need to keep calm and wait for the storm to start!

Comment by JohnL on March 12, 2014 at 8:27am

JR- I couldn't agree with you more. There seems to he a lot of doom and gloom on this board lately, but as you said Hilcorp seems to be the only player in Mercer County right now so I guess there's some glimmer of hope.

I'm encouraged by what I see happening in Mercer County (especially with Hlicorp) but at the same time I'm realistic about anyone's chances of being part of a drilling unit, including me.

John

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