He's BACK! Look out Ohio. Aubrey is back.

From Upstream Online (link)

Controversial former Chesapeake Energy chief executive Aubrey McClendon is getting back into the oil and gas business and is staking his comeback on the US play he described as the best thing to happen to Ohio since the plough — the Utica shale.

Sources suggested McClendon is close to buying at least one major acreage package and may have wrapped up another, and is already deploying his signature army of landmen leasing under the names of shell companies to hide their tracks.

The co-founder of shale giant Chesapeake was ousted from his own company by activist investors, but has reportedly raised $1 billion in a matter of weeks to back his new privately held operator American Energy Partners (AEP).

Offset and legacy operators, landowners, leasing agents and industry sources painted a picture of McClendon lodging high bids for major parcels to put together a strong position in counties such as Guernsey, Belmont, Harrison and Noble — an area south of Chesapeake’s focal point that has boasted some of the best wells in the play.

McClendon won the bidding for about 50,000 acres put on the market by Shell, which appears to be unloading most of its acreage in Ohio to concentrate its efforts on the Marcellus and the Utica in western Pennsylvania, where the Anglo-Dutch supermajor has looked at building an ethylene cracker to process production.

Sources who screened the Shell package, which included parcels in Jefferson, Guernsey, Harrison and Belmont counties, characterised the acreage as fragmented and trending toward the still unproven oil window of the play and said the supermajor was unwilling to piecemeal out the more prospective blocks.

Those sources suggested McClendon had reached an agreement to buy the entire package but had not closed the deal yet.

Shell declined to comment, other than to say its Appalachian basin “portfolio and strategy is unchanged” and it did not comment on ongoing commercial matters.

 

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Permalink Reply by mark ondrusek on August 16, 2013 at 2:36am

sounds good for beaver county and the cracker plant! 

Permalink Reply by Trapper on August 17, 2013 at 2:09pm

Good for Lawrence,Mercer,Butler,and Venango Counties too!

It appears Shell sees more $$$ in the Marcellus than the Utica.

Permalink Reply by searcherone on August 16, 2013 at 2:37am

Frank, this is a great find. Thanks for posting.

Seems to shed light on the current and past couple of weeks of leases, attempted leases, and deals between companies in southeast Ohio.  So unleased landowners be sure to dream big and get better than 20%.  Just my humble opinion.

Permalink Reply by craig on August 16, 2013 at 4:28am

Frank, when was this originally written. Just curious.  

Thanks for posting.

Permalink Reply by Noah Brenner on August 16, 2013 at 5:00am

It came out today in Upstream -

http://www.upstreamonline.com/hardcopy/news/article1334603.ece

It's a weekly oil industry newspaper but it requires a subscription

Permalink Reply by craig on August 16, 2013 at 5:14am

thanks!

Permalink Reply by searcherone on August 16, 2013 at 7:31am

Noah, I  see you wrote the article.  So can we on GMS interview you?

What can you tell us about your sources and who the people and groups are in southeast  Ohio guiding landowners into what will ultimately be a deal with Aubrey?  What kind of money and royalties are being offered to unleashed landowners through Great River and other groups?    Just asking since you are the writer of the story that most landowners on GMS can't read.

And I totally get it about  journalism, copyright, and profit.  So can you enlighten us more?

Permalink Reply by Noah Brenner on August 16, 2013 at 11:40am

Almost everything I know is in the story-

The Great River lease that I have seen in Belmont was $6400 and 20%- I have no idea if it is a good lease or not. Only an experienced oil and gas attorney could tell you that.

Orange Energy Consultants, which seems to have created Great River is a very capable land company out of Dallas and, from what my sources told me, is well respected within the industry.

My sources indicated there were others leasing for McClendon out there but I don't know specifically who those groups are. If they are offering similar terms in a similar area I don't think its out of the question to think that your lease could end up with AEP.

Since the story was posted here I was able to confirm that AEP was the buyer of the Enervest package and the latest version on www.upstreamonline.com reflects that.

If your land abuts the Enervest stuff or a Shell lease I would think that it would be an attractive place to be but I also wouldn't expect to get the same price per acre as Enervest did. In the shale business scale is everything and 1 acre in a 5 acre block is not worth the same amount as1 acre in a 100 acre block.

I would also expect different terms in different areas. Some places are more proven then others. I wish I could tell you what those areas are but different companies see the play in different ways and might assign very different values to a property.

I will say that what looks to be shaping up as the southern wet gas window around Guernsey Noble Harrison and parts of Belmont and Jefferson is what people talk the most about in industry circles. But it doesn't mean one good well won't change everyone's mind next week.

As for my sources- They were pretty varied - a lot were in Ohio - but in all I talked to people in five states who are involved in various parts of the oil and gas industry.

I wish everyone good luck on their leasing. It's an incredibly important decision and one that should be done with as much information as possible and the advice of a good attorney. 

Permalink Reply by Garfield on August 19, 2013 at 5:38am

BAD BAD LEASE!

Contains "Market Enhancement" Clause!

It's NOT a Gross lease it's a NET LEASE and open ended at that!

We can't monitor their hidden "expenses" and besides all gas is processed and we can't be paying for processing and transport out of the landowner's pocket!

Their pockets are DEEP and they're getting 80% and they can't do it without us!

Anyone signs a market enhancement clause must be out of their mind or ignorant of the facts!

Don't be taken!

No Ad Valorem!

No Compression Stations!

No Foreign Gas!

No Gas Storage!

Permalink Reply by Sonny Cramer on August 22, 2013 at 3:03pm

Hello Garfield

0i7okn54zwbdoPermalink Reply by 0i7okn54zwbdo on August 16, 2013 at 4:36am

Can't keep a good landman out of the oil patch for very long.

Permalink Reply by gary SWF on August 16, 2013 at 5:25am

Just spoke to a person in the Oil/Gas business in Houston........He said the story appears to be true from what he is hearing.........

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