Replies to This Discussion

Permalink Reply by Wayne D on February 13, 2012 at 2:29pm

It will be interesting to see the language used for exempt wells . I am still surprized that 640 acres are still  being held with a single vertical well .  Maybe this will encourage the gas companies to S*** or get off the toilet .

Permalink Reply by Wayne D on February 14, 2012 at 4:56am

Do most people agree that " truly exploratory wells " " the local impact of such wells is relatively minor " ? I have seam most of the damage to secondary and dirt roads  already done just with pad preporation ,and vertical drilling . 

Permalink Reply by Brian V. on February 14, 2012 at 6:53am

It amazes me that Corbett signed the impact fee bill. He had been against it for quite some time. As to the loop hole. I don't see any issue with it, if it is sused on truly exploratory wells. I can't believe that PA has not addressed spacing, unit size and some type of Compulsory Integration/Forced Pooling.

 

I am on the fence with unit sizes. On one hand if the surface impact could be reduced by having units up to 1200 acres I think that would be a great benefit, however more land could be HBP and royalties seem like they could get watered down further for smaller interests withing said unit.

 

I am completely in favor of Forced Pooling. If you look on LANDEX at how some of these units have taken shape it is painfully obvious that people are being left out of production and those properties will likely never be able to recoup the money lost by being excluded. I have seen properties excluded for 1) not being under lease at all or 2) being leased to someone other than the operator and the operator not being able to acquire the lease or work out a trade of some type. Those properties could be included down the road but they will have already lost out on royalties for the time that they were not included. NY's forced pooling allows for the mineral owner to buy into the well out of pocket or take a penalty phase of 300% and then receive full royalty interest to their share of the well. They also allow for competitor's who own leases within the unit to buy into the well as a partner and be able to pay out their mineral interest royalty to the property owner. This opens the door for competition.

 

All in all until gas prices go up. which could take quite some time, there really won't be much interest. I have read that most companies are dialing back big time in the Marcellus. I haven't seen anything that indicates Shell is doing anything to slow down in Tioga County. I realize they are not producing much in proportion to what they have unitized, but I certainly would be backing down operations with what prices are right now. 

 

Anyone heard of any offers out their recently. I read on the Bradford Co, page that someone stated they couldn't get an offer better than $500/acre. A buddy of mine called Talisman and was told that they are not expanding their lease hold in the Marcellus at this time. He said they are only focusing on securing leases in their proposed units for the 2012 year. Chesapeake has fallen off the map here and Anadarko seems to be not returning calls. Williams is long gone. It's amazing how quickly things can change. NY seems to have missed the boat for the time being.     

Permalink Reply by Wayne D on February 14, 2012 at 8:05am

friend of mine just ( last few months) signed in bradford co for 3200 . he and some other locals had quite a few acres to offer as a package .

Permalink Reply by Ann Ticopa on February 14, 2012 at 9:08am

Not a complaint about the direction the thread has taken.  However, my reason for the original comment was to let people know that non-producing vertical wells might not "count" when impact fee money is distributed to municipaliites.   

Permalink Reply by Brian V. on February 15, 2012 at 4:39am

Sorry Ann, I had a lot on my mind and just laid it all out there. I'm interested to see how the County Commisioners will vote as to the Impact fee. I'm not crazy about a portion of the impact fee going into the states general fund. I believe any funds generated out of the Marcellus should stay within the impact areas of the Marcellus. That makes to much sence for politicians though.

Permalink Reply by Ann Ticopa on February 16, 2012 at 6:46am

Afaik, no impact fee money goes into the general fund.  Which is no guarantee that the dedicated funds won't be raided sometime down the road.  (I attempted to upload the Distribution section of the HB1950 Summary, but no go.)

I too am interested in what the commissioners will do.  Two areas of concern have surfaced.  In Bradford Co., a commissioner has questioned whether the impact fee money will fall short of what the gascos are presently spending of road repairs.  In several Pittsburgh suburbs, it's that the preemption of local zoning power has removed their ability to protect residential property values.

The state has relased an approximation of the amount the impact fee will bring in the first year.  Using that, the distribution section of HB1950, the DEP SPUD data, and the DOT liquid fuels population/highway miles numbers for municipalities, it would be possible to arrive at an estimate of what each municipality would get.   That plus information on current expenditures by the municipalities would enable commissioners to make an informed decision on what would be best for their individual counties.  

Permalink Reply by Brian Day on February 14, 2012 at 9:35am

I half wonder if Shell has a different philosophy about Marcellus development.  They may be looking to export LNG to Europe as well as developing other chemicals from their holdings with wet gas.  I am not sure that perhaps Cheasapeake has a more speculative investment strategy when purchasing leases.  Cheasapeake may have overextended their vast capital a bit and need to juggle their acreage or even try to sell some off.  Bradford County has more Cheasapeake leases I think and may find its current lease holder changing after a big sale.

Permalink Reply by Billy Park Whyde on February 16, 2012 at 6:59am

 Lately we have seen many a company cut back on the idea of gas production  here is another example http://blogs.star-telegram.com/barnett_shale/2012/02/energy-firm-cu...

 For what its worth I think that the gas development might be hindered until gas prices increase which will also give the gas companies the chance to point a finger at the impact fee as the evil. 

Permalink Reply by Ann Ticopa on February 16, 2012 at 9:00am

The gascos may have underestimated how fast the price of gas would decline.  But they have been in the business too long not to have anticipated a drop and had plans in place.  Looks like ~$2.50 was the financial "stop loss" for moderately productive northern tier development.      

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