Have WPa Bonus and Royalties Peaked?

 

We're still waiting to sign and have lease offers in the wings....... should we wait a few more months or sign now? Will the $$$ go up? Has the interest moved to the Utica in Ohio and away from PA?

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2s72s0k9mm8gdPermalink Reply by 2s72s0k9mm8gd on December 14, 2011 at 1:34pm

Been wondering about that myself paleface.........................?

Permalink Reply by Jack Straw on December 14, 2011 at 1:48pm

Crude oil is fungible, it is an international market. There is the ability to bring a barrel of oil out of the jungles of South America and get it to China; there is the ability to bring a barrel of oil out of the sand dunes of Saudi Arabia and get it to a refinery in Texas. The supply/demand metrics for crude oil are global.

Natural Gas in North America is land locked. The supply/demand metrics for North America are restricted to the North American market. Currently, there is an oversupply of Natural Gas in North America.

Right now, Natural Gas is selling for $11-$14/mcf for delivery to Japan or South Korea.

Japan and South Korea have the infrastructure that allows them to receive (and re-gasify) large quantities of Liquid Natural Gas (LNG). Australia, Qatar and Brunei have the resources and infrastructure to liquefy and export large quantities LNG in purpose built cryogenic LNG tankers.

On a BTU basis, one Barrel of crude oil is the BTU equivalent of 6-6.2 mcf of Natural Gas. If Natural Gas in North America were to sell on a BTU basis against crude oil, Natural Gas would currently be selling for around $16/mcf (instead of the current $3-$4/mcf).

U.S. Industry are very slowly attempting to increase their demand for cheap Natural Gas. But, in this economy it is difficult to spend money on research and implementation and equipment. There are pressures to convert more power generation from coal to natural gas for electrical generation. But by and large the Government are ignoring the opportunities to help the industry - in fact Government seems to be impeding (or even vilifying) industry.

UPS and Fedex are converting delivery vehicles in certain areas to use Natural Gas as their fuel. Research is underway on technology for improved Natural Gas engines for Interstate trucking, large open pit mining equipment, rail locomotives and automobiles.

The problem is that in order to use Natural Gas in new ways, we need to have the National infrastructure required to provide fuel to the potential users.

Rather that our Government squandering vast taxpayer resources on uneconomic “pie-in-the-sky” wind farms, solar farms, solar cell factories, corn ethanol, wood chip ethanol, etc. – our Government could be actively encouraging and supporting the use of clean/green Natural Gas.

While Government touts electric vehicles as clean/green, these electric vehicles are recharged from polluting coal powered electric generating plants and filled with batteries that are either Ni-Cd (eventually toxic waste, requiring metals whose mining, smelting and refining operations are very polluting) or Li-Ion (eventually toxic waste, requiring a metal whose mining, smelting and refining operations are very polluting and is imported from China).

While Government touts hybrid vehicles as clean/green, these hybrid vehicles are filled with batteries that are either Ni-Cd (eventually toxic waste, requiring metals whose mining, smelting and refining operations are very polluting) or Li-Ion (eventually toxic waste, requiring a metal whose mining, smelting and refining operations are very polluting).

Our Government is giving subsidies for corn ethanol, resulting in higher prices for basic foods (particularly for the most poor), and whose production results in an increased need for nitrogen fertilizer (damaging ground water and producing a residue heading down the Mississippi and into the Gulf of Mexico - where it has resulted in an oxygen deprived “dead zone”).

To quote Pogo, “We have met the enemy and he is us!”.

All in my humble opinion.

One size fits most.

 

JS

2s72s0k9mm8gdPermalink Reply by 2s72s0k9mm8gd on December 14, 2011 at 2:09pm

The Enemy is not us.....it is the Marxist Puppet in the White House and all of his Communist Enterage!!!!!!

I totally agree with you on the government "green" crap.

Their philosophy is "You have to tear it down before you can rebuild it."

Permalink Reply by Dave on December 14, 2011 at 2:10pm

Jack- fungible?

holy cow where did the intellects come from on here? I thought we all only think of ourselves and upfront money stealing our kids future and such

brilliant response again jack thx 

0l1a6laz7smpfPermalink Reply by 0l1a6laz7smpf on December 21, 2011 at 6:17pm

I just read this...well put....and thanks for spending your time sharing with us here.  I have much to learn...and there are some here like you Jack that help us that don't know all this feel better to greet those that do!

Permalink Reply by Jim Litwinowicz on December 14, 2011 at 4:06pm

Paleface, another reason that oil hasn't dropped is because those prices you see quoted are for near term delivery, usually 60 days. These new finds are years away from any major production that would have any impact at all. And even as the US has cut imports a little, the world demand, mainly China, India, and Japan (since they shut down their nukes), has increased.  Add in the instability from the Arab Spring and Iran's crazy leadership.

Permalink Reply by Jim Litwinowicz on December 14, 2011 at 12:44pm

Not only the low prices but other plays like the the Utica that should give better ROI. Perhaps Endeavor has it sites set elsewhere....like maybe wet gas/oil zones here, Texas, Indiana, Colorado?????

Permalink Reply by DKinPA on December 14, 2011 at 1:09pm

Keep in mind that they pulled out of N. Central Pa and alot of the activity is moving twds W. Pa and Ohio.  Plus this is one company and does not indicate any substantial movement  regarding the industry as a whole because there are tons and tons of stories about companies making huge commitments into the appalachia basin.

0ym9x5ag7ury2Permalink Reply by 0ym9x5ag7ury2 on December 15, 2011 at 3:07pm

If you want to know how high the bonuses can go, do a study of the Texas Barnett Shale. I remember $20,000 per acre bonuses and 25% royalty for the hold outs.

Do a study on what's under the Marcellus in your area, that will help you understand the total potential. Range Resources called it a tripple play in PA, so what's in the Utica Shale, and how many layers of oil and gas are in the Devonian shale? I don't think the savy business people are going to tell you what you are sitting on. The average person doesn't have clue what is below them and thats the way they (Oil & Gas Companies) like it, Uh Huh,Uh Huh! I don't know whats on TV but I know whats under the old money maker below me.

My theory is that if this is the 2nd largest oil find in the world as Geologist have been quoted as saying (I've heard it, read it, and have it on audio tape), there has to be oil throughout the Appalachian Basin, it's a relatively small area. 

If you are surrounded by leased neighbors like I am, it might be wise to lease before the wells start taking the "product" or you get forced pooled (if you are in OH).

I think the worst thing we can all do is keep quiet. I talk about oil & gas with anyone that has land. Most are oblivious and thank me for the "education". The more people you talk to the more people will learn. I recommend this site as a starter for the beginner. By helping others you are helping out your local economy, not to mention tax dollars for the state. Its a win win situation.

A friend in WV said everyone in his area was hush hush and didn't talk about mineral rights as it has been for over a hundred years. He admitted that the O&G Companies were "picking them off" one by one.

Break out of your routine and study some geology and history (Texas & Arkansas). You can be the local expert when your mind has a picture of the oil & gas below your feet. Its there, they just don't want you to know how much you're sitting on.    Good Luck!       Ron 

Permalink Reply by DKinPA on December 15, 2011 at 3:43pm

Ron,  You are 100% correct that there is a very valuable commodity beneath our land and the gas companies don't want you aware of that fact!  Although prices are low now it is irrelevant to the long term stratagy that they have.......continual revenue for 30-70 years with a small initial investment.

In Pa because there is no forced pooling the holdouts are in a good position and are the coveted pieces to the puzzle for the gas companies....they want and need ALL acreage, it is too valuable to leave behind!  They won't be excluded.

 

The intent of the posters original question has been lost though, because it appears there may be a new set of offers coming soon in Northern Butler County.

Permalink Reply by mike4t on December 15, 2011 at 4:01pm

Please share....... what are you hearing??

 

Permalink Reply by SBRW on December 17, 2011 at 1:26am
Any uupdate Dkinda?

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