Comment

Comment by sldouglass on March 8, 2013 at 6:54am

You have a point. I would not be surprised to find the Atlas has sufficient control of some areas to make them uninteresting to other producers. At some point in time it will need your property and that time is hard to predict. Meanwhile, you might guess that opportunists will try to pick up unleased properties cheaply to be able to make a deal with Atlas. As an individual owner you will not be without bargaining power when Atlas, itself wants to lease, but there is still strength in numbers. I suspect that at some point a deal with NWPALG will be attractive to Atlas and it might be useful to have the benefit of whatever bargaining power NWPALG has [adding your land to that bargaining power]. I would suggest that the cost of joining with the group is relatively modest compared to the potential benefit. There is the possibility that you can do better on your own, but to me, that seems doubtful. Certainly there is no point running after Atlas crying, "Please lease my land!" It would seem to be best to wait until Atlas comes to you or to NWPALG and avoid the middlemen. That may take a few months or many years. But if Atlas wants to show its current leases as real assets, it must fill in the essential blanks.

Comment by Dave Siekkinen on March 8, 2013 at 6:25am

I own land in Crawford county, but am surrounded by held-by-production properties (Atlas).  This is why I was unwilling to fork over the cash to join the NWPALG.  I do not realistically expect much to happen anytime in the near future, at least in my neighborhood.  I suspect much of the county is a similar patchwork of hbp properties.

Comment by Joseph-Ohio on March 8, 2013 at 5:55am

john doe

There's got to be a bend from vertical to horizontal there.

Those bends I've been told are about 500' radius.

If you slope the horizontal downward toward it's termination point and built a chamber at the termination point then dropped another vertical into the chamber and then frac'd. the horizontal, it would seem to me that the frac'd horizontal would drain into the chamber where a pump jack could lift the resource to the surface.

I'm thinking the radius could prohibit the deeper vertical from acting like  a pool itself (depending on the pressure overcoming the 500' radius before draining back down into the deeper part of the 1st vertical).

Just thinking out loud here - no clue if it is all even possible to build out / economically practical.

Comment by john doe on March 8, 2013 at 5:38am

1.4 mmcf if that number holds without much dropoff well,, its not a horrible number.

285 feet of Utica shale is better than good.

No information on how much wet or oil, from what I gather, is just need to figure out how to move whatever is there to the surface...A simple  pumpjack???

what about the other formations I see the vertical part of the well went much deeper than the horizontal depth.

I bet Range did some core samples deeper we will never know about,BUT what about the deeper layers.

I am sure we have more positives so I am not too discouraged...

Comment by Berk on March 8, 2013 at 5:21am

Come on folks this is the first of many to be drilled lets allow time to take its course and not sell out to the first person that knocks on the door. We the people of Crawford county have been through a lot more than this since the early 1800's, wars, floods, tornado's loss of family members. Until about 18 months ago most of us never heard of the Utica shale and we were living our lives. If it's here it will come if it's not then we didn't have anything to sell in the first place.   

Comment by Samuel J. Orr on March 8, 2013 at 3:52am

I do not think you can pass legislation that retroactively destroys contracts. For example I sell my land and somebody has a new technology that I do not know about that not only detects but extracts gold from my land. Without disclosing this to me, he buys my land. A legislature might pass some legislation that would affect such types of transactions going forward, but not to already done deals IMHO.

Comment by Bob Jenness on March 8, 2013 at 1:23am

Sam Douglass,

For those holding 12.5% royalty leases with RRC, Halcon, Chevron, or Shell, the Lippert well is all you say it is - just the first of many that will provide some nice royalty payments to those HBP leases.  

For those unleased landowners waiting for the "market" to come to them, the SeekingAlpha release tells us that what will come is not a free market, but a monopoly.  If  were planning to wait for a fair lease, it may be telling us that there's now only a very small probability that what we're waiting for will happen in the next hundred years.  

There's one alternative I didn't mention directly in my last post, but perhaps you and the Landowner groups should be thinking about it if I've read it right...

All the HBP acreage is based on vertical wells and most or all are shallower than the Utica.  We've read here that the leases mostly provided for HBP for all time and all strata, even though  a vertical well produces from a 300 ft circle at a single depth.  RRC, Atlas, etc. may have known about the future of Horizontal when those leases were signed, but the landowners (and probably their lawyers) almost certainly did not.  The obvious fix for this unfair and deceptive leasing practice is to identify and limit the HBP acreage and strata by legislation in PA.

Here are some questions that can guide this discussion:

1. Of the 10s of thousands of unleased acres committed to all the landowner organizations, how many cannot be reasonably unitized due to neighboring HBP land?

2. When was the first view of the promise of Horizontal Drilling available to oil company insiders?

3. How many HBP wells were drilled after that date and are now producing minimally or not at all?

4. What new technology developments can either PA or US "encourage" ( similar to the way we're now encouraging both horizontal drilling and wind/solar) to reduce the required entity and unit size to produce from currently unleased parcels?

5.  If we consider the business model for all organized and unleased acreage, how much value was subtracted from it by reducing the estimated lease bonus from $5000 to $500 per acre?

6. How does the prospective Utica landowner value math compare to the current actuals and prospects from the Bakken?

7-??. More questions to be added by forum readers...

Thanks, all for your continuing patience with this "depressing" discussion.  I know well that it's always depressing when something happens to reduce the value of crops in the fields, and our O&G crop just got flattened by a monopoly storm.

Comment by Joseph-Ohio on March 7, 2013 at 3:01pm

Thanks gary.

Comment by gary smith on March 7, 2013 at 1:19pm

joseph,right across the causeway from andover, halcon is drilling.right between linesville and hartstown . two well sites there. 358 west of greenville wells drilled and being drilled. atlantic pa .north of greenville,shell has drilled. not fracked yet. .

Comment by Joseph-Ohio on March 7, 2013 at 12:58pm

Thanks for the reply sldouglass.

I can understand it all but it's not going to stop me from trying to learn all that I can.

It shouldn't stop any landowner.

I read it all as part and parcel of the 'landowner beware' environment we're trying to navigate.

Thanks again.

J-O 

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