What is the right price for new lease/renewals.

Reading posts to Micheal Reids Q, in the general discussion. What is a fair offer TODAY , the past is just that. If no one has noticed people are leaving, not coming to Tioga Co. Many commercial buildings that were rented to gas field co's are now empty, camper lots empty. The Northern half of the county is Shell's. No one else is coming. Talisman is letting leases expire, dissolving partnership agreement with Shell for Jackson Twp, due to bad profitability.We are tier 2 acreage, Northern half is not even that. Production #'s are marginal at best for many of the early wells. If you think less than 2k is a insult, you are living in the past.08-10 many players in area, price of gas in 08 $12-14, seismic testing not complete, the world was running out of gas, oil. Enter the Bakken, Eaglesford, Utica. Now on a positive note, Shell is here hopefully for the long run, gas prices are rebounding from historic lows, technology is getting better. So I say again what is a fair price? If nothing else my rant is sure to liven up our county group once again.

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Replies to This Discussion

Permalink Reply by M - on August 1, 2013 at 4:17am
Thanks.... We are on the border so Senica is still in the game also.
Permalink Reply by Gringo on August 1, 2013 at 6:42am
After listening to the conference call for Shells 2nd Q results, I get the feeling we are possibly on the chopping block. The analysts tried to pin them down on what acreage, but to no avail. 2.1 billion dollar write down on North American shale assets, wonder if East has land in Florida for sale.
Permalink Reply by paleface on August 1, 2013 at 8:27am

 Shell is busy in Little Marsh.

Permalink Reply by Ann Ticopa on August 1, 2013 at 11:25am

Yes, but Shell specified their <b>wet</b> gas assets as the primary disappointment.  Which rules out Tioga County.  They could be referring to their interests in the Gulf area, or British Columbia, or Western PA, or ? 

Permalink Reply by paleface on August 1, 2013 at 2:36pm

 There supposedly bringing a big rig from the Pittsburg area should be here Monday to drill the Neal pad.It is interesting there bringing rigs from western PA to Tioga county.Maybe the Utica was here all along and they didn't have to leave?

Permalink Reply by Ann Ticopa on August 1, 2013 at 5:44pm

The DEP Formation Report for TC has multiple entries for Neal D 815 1V 117-21530.  Two say it's Black River Limestone and two say Trenton Limestone.  The most recent permit was to drill deeper, issued 7/1/2013.  Also in Chatham Twp is Watkins 820 117-21652, listed as a Trenton Limestone well.  That permit was applied for 7/23/2013. 

I don't know who ended up with the 2000 vintage Phillips T/BR leases - or if it's relevant - but the copy I have specified unitization (only) for Onondaga , Oriskany, or deeper. 

If you generate the Formation Report for SWEPI, you'll find that they do drill Utica wells ... but only one in TC. 

Permalink Reply by paleface on August 1, 2013 at 10:26pm

 They drill a TBR well than they drill a Utica,that seems to be the system so far.Gee's well was drilled total 14990.00,the Neal well is targeted for 18200.00.If Neal and Watkins works out like the Gee well they will revisit most of the well pads in the area and drill a TBR/UTICA.Thats my understanding of what there doing so far. 

Permalink Reply by paleface on August 3, 2013 at 9:56am

 Jim what well pad is closest to him?

Permalink Reply by paleface on August 4, 2013 at 6:57am

 Jim I think Shell wants to have people signed before anymore TBR/Utica wells hit in the area.

Permalink Reply by Darrell Weaver on September 2, 2013 at 4:45pm

What happens to a auto renew lease and shell does not pay the bonus at the end of the primary term..........

Can shell still be on the hook for the first lease with no deduction clause...........or do you think they will give you a surrender letter without asking 4 it............????

 

Will they try to resign with a deduction clause lease with a lower royality.............???

Permalink Reply by Ann Ticopa on September 2, 2013 at 5:40pm

Darrell: According to a recent quote of a Shell rep, the ERI leases they bought did allow for deduction of post-production costs. And, they had started doing that this year. So, unless you had an addendum prohibiting it, you might want to check.
Don't know first hand, but am guessing they would want to increase pool size to 1,280 in a renewal.

Permalink Reply by Darrell Weaver on September 4, 2013 at 10:06am

I have a no deduction clause in addendum......I hope they drill prior to 10/14......I like my current lease

 

Also heard thru grapevine Shell is talking to BP

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