Replies to This Discussion

Permalink Reply by Lynn Wigglesworth on August 17, 2010 at 7:51am

East has never told anyone what's going on, and I don't think Shell is going to be any better about it. I'm getting disgusted with the whole thing; in my area East is just drilling and shutting in wells. Who knows if/when they ever intend to finish them so people can start getting royalties?

Permalink Reply by Sandra Earnest on August 17, 2010 at 8:18am

We have heard a bunch of junk. But nothing really from Shell. Our well was drilled in April. Just sitting there. We were told that is what they are doing until Shell took over. We were then told Shell was going to do a lot of training. We have been told the rare bats in Jackson Twp. are holding up the pipelines. No one from any company has officially let us know what is happening.

Permalink Reply by Lynn Wigglesworth on August 17, 2010 at 9:43am

There's a well near me (they want to put me in the unit, but I'm not leased yet). East drilled it over 2 years ago, but never drilled the horizontals (they didn't lease the area they need to drill under, like my property). There's no pipeline anywhere near this well, so it could be years before it's online. They have declared the unit, so they are holding all the leases; there's no real reason to finish the well right now. I think they are waiting for forced pooling so they can force me into the unit.

Permalink Reply by Austin Millbarge on August 18, 2010 at 5:20pm

In my humble opinion, East's intentions were very clear, but I think for a lot of people they never did their homework and instead thought they were business tycoons that could play hardball.

East has a long history of developing mineral projects, getting them put into place and then flipping them for a profit. They never have been a long time player like the large oil companies. Really they are no different than a real estate developer who buys raw land, cleans it up, subdivides, puts in utilities and then sells for profit.

East as I recall got about $300 million from a private equity fund and basically that money went to rushing in, putting in wells and leases and locking it all down, capping wells and creating a business entity for sale. With the purchase by Shell, they seem to have done quite well and I am sure there is ass slapping and high fives all around. Good for them.

The real money in business is in capital gains not revenue, that's why East was never really concerned with building pipelines and all that jazz. Getting wells in and locking in people was way more important.

So I think if you haven't signed up and got your bonus money, you are up a creek in a chicken wire boat. Because royalties for many could be many years away, if they live to see it. The smart people invested their bonus/signing money because that is probably all they will ever see. For the hardliners that want $3000 plus an acre, it isn't worth it because in Tioga the layer of shale is more narrow than other places. Those people will sit and rot.

For a company like Shell, it's an entity that lasts longer than anyone's lifetime. They will get the gas flowing in large quantities when they are good and ready. Could be now, could be 5 years, could be 30, could be 50. This purchase just goes into their asset pool and that asset pool will outlive any one of us.

The one plus is that this gas is close to east coast markets, but that is no guarantee of anything. Ultimately for now, it might still be cheaper to suck it out of the Persian Gulf or along the coast of Norway rather than bugger with it here.

Permalink Reply by Ann Ticopa on August 18, 2010 at 7:13pm

Imo you're substantially correct about East. (It was KKR that bailed them out.) But the situation for the unleased is as dire as you portray it. Shell hasn't reeled in the landmen

Permalink Reply by Ann Ticopa on August 21, 2010 at 8:21am

Oops, typo. Should be "isn't as dire".

Permalink Reply by paleface on August 21, 2010 at 7:59am

I think if a well is drilled and is producing with real good numbers the unleased people will have gas co. knocking on there doors with very good offers.

Permalink Reply by donna elliott on August 17, 2010 at 9:10am

I have some property in Tioga Co but don't live in the area. I have a lease with East and have e-mailed them twice and have never recieved a response. I do plan on calling them to see if I can get any information about the sale to Shell. The only thing I ever recieved was a short letter informing me of the sale. This board is wonderful, since I don't live in the area it helps to keep me informed. Thanks everyone for all the information.

Permalink Reply by Ann Ticopa on August 17, 2010 at 9:42am

Consider also subscribing to the Wellsboro Gazette. (I have no connection with Tioga Publishing other than being a subscriber.) And, you will sometimes find articles at the Elmira Star-Gazette and Williamsport Sun-Gazette web sites.

Permalink Reply by donna elliott on August 17, 2010 at 9:52am

Thanks Ann, our property is in Sullivan Twnshp and there is a gas line out at the road, property is on Dewey Holow Rd

Permalink Reply by Lynn Wigglesworth on August 17, 2010 at 9:48am

I heard that the sale DID go through. Shell changed the name of the company from East Resources Inc. to something like East Resources Management, but otherwise I don't think anything has changed. In my area (Delmar township) East is continuing to drill, and apparently fracing (I see the fracing trucks go by all the time). But as far as I know they aren't laying any pipeline around here, so there are a lot of wells just sitting, shut in.

Permalink Reply by Sandra Earnest on August 17, 2010 at 1:10pm

Shell took over the first of August. That is the information we have. Sandy