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Comment by Jack Young on November 6, 2013 at 3:06am

Latest facts and a rumor from the Marcellus and Utica Shale

• Shell could close down drilling in PA and Texas.

• We heard that Shell may be auctioning off all of its equipment in the Texas and PA. Shell may be closing down all its on land drilling in the U.S. and focusing on offshore drilling.
• As the result of this information, we called a couple of companies that have been working with Shell to see if they are still working for Shell. All companies have said that they are not doing any new work for Shell now.
• If you’ve been following the acquisitions of Aubrey McClendon, he’s buying Shell’s leases in OH.
• It’s important to note that the Shell business unit responsible for the cracker plant is separate from the exploration and production business unit. Based upon previous rumors, it seems that Shell’s cracker could happen in PA.

http://www.shaledirectories.com/facts-rumors-70-november-2,-2013.html

Comment by Samuel J. Orr on November 6, 2013 at 2:43am

Maybe the good news will be that HK will sell the rest of their Utica acreage in Mercer, Venango, and Crawford counties to Shell. Yes we all may have to wait a few years but at least Shell is  a first class company with plenty of money.  A unwise move on Floyd Wilson's part to trash his Pennsylvania Utica acreage if he wants to sell it. He even described the culture in NW Pennsylvania as being inhospitable. Even if he believes that, it was not something I would have expected a CEO to say.

Comment by james on November 5, 2013 at 9:28am

Strange how things change from one extreme to the next, I also have seen Bounty Minerals spending millions to purchase mineral rights recently. I know Ohio has proved to be a better bet recently, but Mercer county still has a lot of companies spending a lot of money. I guess we will see what happens, Crawford county looks like it is the worst of the 3 counties with nobody showing any interest at all there.

Comment by JREwing on November 5, 2013 at 9:12am

James, maybe because the Allam was the best thing that they had to talk about at the time, then along came the Kibler well.  As far as leasing goes, you're correct however they are also letting a lot of leases expire that were assigned from Sylvan.  There's no doubt that there's some mineral value below us, just maybe not as much as HK had anticipated...

Comment by james on November 5, 2013 at 8:49am

I thought they were talking how great the Allam well was earlier this year??? They were still leasing property around that well just a few months ago.

Comment by JREwing on November 5, 2013 at 7:46am

If you thought the 3Q report was bad, he actually called the wildcat wells, the wells in the north (Mercer, Crawford and Venango) wells "shitty" in the question/answer portion of the conference call.  I think Mercer and Venango just got bumped down to Tier 2 acreage as well.  I totally agree...stinks

Comment by Bob Jenness on October 28, 2013 at 10:53pm

Someone also said that the dollar value of such good things is subject to NPV math.  Not to deprecate the more subjective values, but I had those before I'd heard the words Marcellus and Utica.  Let's also not forget that he running expenses of waiting is the primary weapon in the opposition's war of attrition.  Or do you know of a white knight, Sam?

Comment by sldouglass on October 26, 2013 at 10:05am

Someone said something like:

"Good things come to he who waits."

Comment by Bob Jenness on October 25, 2013 at 11:49pm

All,

If I net all this out, the O&G value of my land is way down in the last year.  That's just market reality from all the bad news, and it's real dollars in my net worth calculation.  If I do a NPV calculation for a reasonable estimate of what it might lease or sell for in 26.3, 35.7, or 100 years, that doesn't dramatically increase the numbers.  The picture gets worse if I try to factor in the risks of a viable replacement technologies like methane hydrate or creeping solar.  What we need is a white knight with the following attributes:

Startup corporation without the overhead of glowing commitments to greedy investors.

World Class Skills in O&G E&P.

WellHead electric generation and/or liquefaction technology to eliminate the need for massive capital to build pipelines.

Willingness to work on "not-quite-Rockefeller-like" profit margins. (maybe even a co-op?)

Unfortunately, I suspect all such world class white knights are jousting in Africa or Europe or elsewhere.

So now instead of waiting for a generous sandman, I'm waiting for a white knight.  My life didn't really change much, did it:-)

Comment by Jack Young on October 25, 2013 at 3:46pm

It's unlikely that the Lippert well production is being restrained. Saying the well wasn't "effectively stimulated" doesn't mean it could be refraced, or even that it could have been fraced better the first time around. It's industry-speak for "we didn't get much". The Lippert well isn't likely to be reworked or even revisited. If Range does more drilling in the area, I suspect they'll look elswhere and try to find conditions where their stimulation methods will be more likely to be effective. It's a combination of the rock and the method that determines whether a fraced well is productive. And either one can generate bad results. They won't refrac the Lippert well - the odds are just too long.

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