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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Replies to This Discussion

Permalink Reply by Cindy Loy on August 20, 2013 at 9:02am

Garfield, I'm not sure what you mean by "foreign gas." You mean we have a say on whether they sell the gas overseas or not? Or do you mean something else? Don't mean to sound dumb, but I sort of am about most of this stuff.

Permalink Reply by Philip Brutz on August 20, 2013 at 9:29am

Cindy,

The following is from my lease with Gulport:

"No other pipelines shall be authorized without Lessor's written consent, i.e. no foreign gas shall be transported on or through the leased premises"

 

In this case "foreign" means gas from outside of the drilling unit.

Permalink Reply by Jim Litwinowicz on August 20, 2013 at 9:46am

Cindy; Foreign gas is gas that is produced elsewhere other than the unit in which your land is located.  That means they cannot build a pipeline to carry gas from another township or state across your property without negotiating another contract with you.  Protects you from having numerous ROWs across your property.

Permalink Reply by Cindy Loy on August 20, 2013 at 1:32pm

Oh, okay. I'll look for that. Thanks.

That reminds me though. I do have a small pipeline at the north end of my property. Looks like a 2-3 inch diameter that comes out of the hill and travels above ground for about 100 ft. then disappears again under the road. I have no idea who owns it, where it comes from or where it goes. It has nothing to do with the well on the hill though.

How would I go about finding out who it belongs to? I've always thought it looked a little dicey.

Mike MurphyPermalink Reply by Mike Murphy on August 20, 2013 at 11:12pm

what does all this decussion have to do with the title that AUBREY IS BACK IN OHIO U NEED TO START A NEW DISCUSSION ON UR TOPIC NOT GET WAY OF THE TOPIC 

Permalink Reply by Cindy Loy on August 21, 2013 at 4:47am

Hi Mike,

Well, if you follow the discussion back a page it did start out to to be about Aubrey being back. I'd just learned he'd bought part of the lease on my land from Enervest.

I'm totally new to all this though and people used a couple terms I didn't understand. I didn't see the need to start a whole new thread just to ask what they meant. It is the nature of discussions to meander, but I did wander OT about that little pipe. Sorry. It just popped into my head.

Permalink Reply by Garfield on August 20, 2013 at 11:35pm

I think it means that only the Gas from Your Well will be pipelined off of Your property..and no large high pressure pipelines.. but don't quote me.. I'm still green on some of this stuff as well!

Mike MurphyPermalink Reply by Mike Murphy on August 20, 2013 at 11:40pm

IT MEANS ONLY PIPELINES TO DO WITH PRODUCTION ON UR PROPERTY ARE ALLOWED TO BE LAYED ....NO OTHER PIPELINES ARE ALLOWED ,,,,,U HAVE TO BE RECONTRACTED FOR ANY OTHER ROW ON UR PROPERTY

Permalink Reply by Booger on August 22, 2013 at 7:42am

not sure what to think about McClendon's return..........did chk's royalty rip-offs begin under his rule?........his idea?........I wonder how he will treat new lessor's when it comes time to pay royalties.

Permalink Reply by bo boboski on August 22, 2013 at 9:01am

You would think that he will have to honor the requirements set up in the oridinal leases that he"s bought. If it calls for absolutely no deductions of any kind, that"s the way it"s gotta be.  Of course. He can also just do what he wants, deduct what he wants, sell the product from the wellhead to one of his other companies he started,pay royalties on that price, then sell it again to a midstream co. for a better price, like chk. does.  Dare people to sue, then if he loses, he only has to pay what he was suppose to pay anyway!  Landowners just have to HOPE they are dealing with an  Honest, ethical , O&G company! If there are any?

Permalink Reply by Doc on August 23, 2013 at 1:24am
If a company bought an existing lease, they bought the terms of the lease. This is why the terms of the first lease are so important. Do your research on the past performance and practices of the individual in charge of the company trying to lease. Why would you expect them to change their spots. There are clear patterns. Be cautious.
Permalink Reply by Booger on August 23, 2013 at 7:06am

I agree the terms of the lease are important........but when the royalty payer refuses to follow the terms of the lease, then those terms tend to lose their value.

as far as doing research on past performance - chk didn't always rip off the land owners on royalty (at least to the great extent they do now)........so if you signed with them before they started this practice -OR- they buy your lease from another company, then you still stand the chance of getting screwed....even if you did your homework.

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