Chesapeake slowing down?

 

I live in western PA and there has been alot of activity by Chesapeake with multiple wells within a mile to several miles of my place.  I had been contacted by them ( as my lease is with them ) and they had intended to drill on my land and some surveying etc had been done etc.

Now, it seems they "have put it on hold until further notice".  I really wasn't told why however I know they are struggling with cash flow problems.  This was to be a utica well. 

So, has anyone had similar experiences since CHK financial woes started?  There is no issues I can think of otherwise unless they are strickly going into Ohio and are going to end drilling in PA for a while based on what they have found ( which as far as I know in my county, Beaver, it has been all dry gas with only rumors of oil or natural gas liquids.

I'd be interested to hear if it appears CHK is cutting cost across the board by not doing lots more drilling and instead bringing some product to market or if they are just running for eastern ohio and the oil instead of gas.

 

Thanks!

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Permalink Reply by craig on May 21, 2012 at 9:18am

yep, CHK is looking for income and Ohio is where it can be had in a timely fashion.

Permalink Reply by mlb on May 22, 2012 at 4:09am

I agree.  They are likely just HBP here and will come back later.  10 billion in debt plus tack on 3 billion more and yes they can't afford to pull dry gas here ( if that is all there is and nothing to confirm other than speculation, maps etc. ).  I am thinking it may be actually now a few yrs until they get back this way but many variables to consider.  Construction of the pipeline will be telling to some extent.  If it does not happen soon that may be telling also. 

 

Tks for replies.

Permalink Reply by mlb on May 22, 2012 at 7:16am

Just spoke to them and yep, it will be a couple to three years before they are back unless suddenly gas prices soar.  Main reasons for up and moving on are:

1.)  Cash flow issues.

2.)  Wells are all dry gas here ( contrary to what we have may have thought/hoped/heard ) so they are moving west. )

So that is the answer, basically what I thought and what others posted.  Ohio will be the place to be for the most part it appears.

Good Luck!

Permalink Reply by craig on May 22, 2012 at 11:13am

Personally, I wouldn't hang much on what you are told. One thing I learned early on, never, ever pay much attention to what they say....pay attention to what they do. Sometimes they are the same, but usually they are not!

Permalink Reply by Hunter on May 21, 2012 at 9:04am

If the shift in the ohdnr wet/dry gas window was to the west, why are there so many permits in Jefferson county? The last map showed eastern harrison county in dry gas area and all of jefferson??

Permalink Reply by Hunter on May 21, 2012 at 10:04am

I apologize, I asked a question but it shouldnt have been in mlb's topic.  I have posted question under another topic that was more specific to eastern ohio and the oh dnr latest wet/gas map. thanks

Permalink Reply by mlb on May 21, 2012 at 9:06am

Might be but we are suppose to be in a wet gas zone.  I have no 1st hand knowledge that they have found that.  Plenty of drilling and permits here but they just stopped cold on this project.  About 3/4 mile out the road they are currently drilling...although if funding was already in place plus permits they may have decided to at least hold that unit by production. 

As my question noted, they have had to borrow about 3 billion just to keep going so I tend to think that is the major reason.  I will call my chesapeake man and see if he can explain it better.

Thanks

Permalink Reply by Area Man on May 21, 2012 at 9:41am

Could also be access to infrastructure - doesn't matter what you find if you can't sell it.

Just food for thought, I'm not sure either way.

 

-Area Man

Permalink Reply by craig on May 21, 2012 at 9:16am

I'm also in Beaver County ....I believe a new rig is arriving as we speak in Beaver County, being setup off of State Line road. Then I heard that one of the rigs that is here now is moving somewhere else....well, at least the crew that mans it is moving. I believe the rig movement we see now is a direct result of having to tie up as many 'about to  expire' leases as possible, and there are a lot of them expiring in the next 12 months in Beaver County. 

I am under the impression that they are still learning exactly what is underneath us, with each well they drill.  Seems funny that they come roaring in here for the Utica, then after they drill 6 or so Utica wells scattered across the County they start applying for Marcellus permits along with new Utica permits....to be drilled from the same Utica pads. Shell is reportedly testing 3 or 4 different plays just North of us. 

To me this all points to nothing but good news for us, especially in the long term. 

What we really need is for CHK to get started on the North Beaver Pipeline for obviously needed infrastructure and which i believe will be soon started.

On one other note, I just heard, pretty much from the horse's mouth, that Mason Dixon has been fired by CHK. Anyone have any dealings with them recently?

Permalink Reply by dood on May 21, 2012 at 3:47pm

Today, I heard that Chspk (and others) has recently became very concerned about the Utica.  It is apparently not as uniform as the Marcellus as far as consistency in the liquids production.  Apparently, recent finding have indicated that the Utica might not be as rich as they first thought because some of the wells have hit dry gas.  This if forcing a lot of the focus back on the Marcellus in the Bellmont County-OH, South Marshall County-WV and Wetzel County -WV. 

Permalink Reply by Billy Park Whyde on May 21, 2012 at 4:22pm

My question is why are they even messing with chancing with hitting dry gas when they could be in the western Utica  hitting profitable oil and move eastward into the oil and wet gas window? I think Devon is going to work that strategy . 

Permalink Reply by Bluflame on May 22, 2012 at 4:00am

US,

  As of last week, CHK had not permitted any wells in Belmont county, Marcellus or Utica. However, several others are active: XTO, Hess, Gulfport among others. I speculate that activity will increase sharply in Belmont when Mark West completes their pipeline through Belmont Cty feeding processing facilities in Harrison Cty.

  CHK has significant leased land in Belmont and is constructing a field office in St. Clairsville.

BluFlame

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