Replies to This Discussion

Permalink Reply by Jack Young on July 16, 2013 at 3:11pm

$500/acre in Hector Township is the highest price I've seen for any sales this year. I'm aware of a $25/acre sale in Hebron Township, but that property was held by an old storage lease. Given the poor drilling results in the county so far and the complete lack of leasing activity for several years, the $500/acre figure is probably pretty reasonable for good quality open acreage. That would be top dollar right now.  

Permalink Reply by Tim on July 17, 2013 at 4:07am

How much for sale at that price?
I couldnt buy enough.....

Permalink Reply by Jack Young on July 17, 2013 at 4:19pm

The tract in Hebron was over 100 acres. Hector has seen several deals, the one that I cited covered 50 acres. If you bought all the OGMs you'd like, what would you do with them since nobody is leasing and the wells to date haven't been profitable? There's a reason prices are low - sellers aren't all stupid and buyers all brilliant.

Permalink Reply by Tim on July 17, 2013 at 5:21pm

Illiquid markets w lack of transparency provide opportunity, but also can work against those who do not have time on there side. You mentioned in the past the majority of the wells are horizontal; to date, I have confirmed one, with the balance being shallow verticals. Can you provide data, permits, well #s, and production data to support your claims? How are shallow wells suppose to produce as efficiently as deeper horizontal? I'm unsure of your position and motivation, but you come across as very bearish on the prospects for the area, although there is plenty of gas in the ground.
Certain areas take more time than others to reach their potential, and that's a function of many factors.
Can you give greater insight into your holdings, company affiliations, and the like?
I cant recall one non-negative comment you have made regarding potter ct.

Permalink Reply by Jack Young on July 18, 2013 at 1:32am

Your questions show how little you know about Potter County. First, my family is the biggest private OGM owner in Potter County, and has been for years. Nobody has more to gain from high prices there than us. Second, there are numerous resources available to you if you want to see how many horizontal Marcellus wells have been drilled in Potter County to date. I'd start by checking under the names Triana, Shell, Penn Virginia, PGE, Seneca and East. I'm not on this website promoting anything, I'm trying to be helpful and honest. If you don't like that, just ignore my comments.

Permalink Reply by Tim on July 18, 2013 at 1:47am

Not sure where I claimed I was an expert, or had extensive knowledge of Potter. From our earlier dialogues, I am asking extremely basic questions, so I'm obviously here seeking information.
I will look up those wells.
How many utica horizontal wells are there in Potter?
What do you make of the pipeline activity in the county, is it merely pass-through and meaningless to local development?
What are the problems with the horizontals? Does commodity price come into play in the county?

Permalink Reply by Jack Young on July 18, 2013 at 3:02am

There haven't been any horizontal Utica wells drilled in Potter County to date - the conventional wisdom is that it's too far east for the Utica to be productive. Nobody can say for sure, of course, but nobody has felt tempted to test the theory either. The Marcellus just doesn't seem very productive in Potter County - even if gas prices doubled, I'm not sure any of the wells drilled to date would have been profitable. Many maps now show the core of Potter County as a virtual Marcellus dead zone, surrounded on three sides by better rock and thicker shale. Again, I'm not completely convinced of that myself since the center of the Potter hasn't been tested heavily, but if the industry believes it then there won't be any drilling or leasing activity until someone decides to risk the money required to test the theory. Any current pipeline activity in Potter County is for transportation through the area - nobody would be building gathering lines for non-existent wells. To date, Potter County hasn't shown an ability to make money from the various shales present, hence the lack of activity and low prices. I hope that will change, but until it does people with OGMs there need to be patient.  

Permalink Reply by Tim on July 18, 2013 at 3:42am

Thank you

Permalink Reply by Chris on July 23, 2013 at 8:04am

Jack

Are you aware of any leasing activity in Potter Co. at this time. I know many leases are getting ready to expire. Any info would be appreciated.

Thanks

Permalink Reply by Jack Young on July 25, 2013 at 7:19am

No, and we have tens of thousands of acres open already. There are a few spots where you might be able to get a lease for a particular tract, but there are no broad leasing efforts that I'm aware of. Something may come up, however - it wouldn't surprise me if someone had a small seismic-controlled leasing play again one of these days. But if that happens, prices and royalties will be low and the area very limited.

Permalink Reply by Chris on July 25, 2013 at 7:48am

Jack

Thanks for the info.

Permalink Reply by Janice L. Hancharick on July 30, 2013 at 5:01am

This has been an interesting thread of conversation.  I understand why the spread of bad-mouthing Potter and McKean keeps prices low.  However I've often wondered where the talk originates ... whether O&G, and/or investment companies want landowners to find the low ball offers acceptable etc..

It's  true this region is not the Marcellus "Cadillac of Shales", but the Utica IS thick and not overcooked.  In other words the profit potential is there.  Today's headlines from various OGM professional sources are also touting the profits available in the Upper Devonian layers, and in the Needmore play which underlies the Utica.  Looks like our subsurface resources come at many depths, w/varied thickness, and all getting more accessible (with profits) as technology and infrastructure advances.  For what this region has $500 AC is grossly unreasonable unless the $$ is needed tomorrow to save the farm, and then what?

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