Replies to This Discussion

Permalink Reply by George Donovan on August 28, 2014 at 3:17am

Jack 

The no decline Burkett well in Alegany twp that you're a part of is only 11 miles from Sharon twp.and we are 36 miles from the restricted Neil well. I  know things can change a lot in a short distance. I agree that proven Middlebury and Chatham are priceless and at current prices can payoff in a few months with a Neil type well. Unlike you we have most all our eggs in one basket in Potter and Mckean and unfortunately NY. We remain optimistic.

Permalink Reply by Jack Young on August 28, 2014 at 8:26am

No argument there - I should point out that the Burkett well you mentioned is a long way from profitable. The decline has indeed been slow, but it started out quite modestly so isn't anything to get excited about on its own. If gas prices increase at some point at least we know there is some gas there. But until someone drills a better producer you wouldn't want to pay much for that area's Burkett potential.

New York is indeed a sad place to have oil and gas rights - we have plenty there ourselves, and the odds are we'll never live to see them get developed. I'm not sure that the geology for the deeper shales is very good up there regardless, so it's not a great loss. But still frustrating.

I'm optimistic in general, but try to be realistic too. I'd hate to have someone spend a bundle buying oil and gas rights in an area like Sharon Township and blame me if the investment doesn't come through. There's clearly value there, but it's a much riskier proposition than the better parts of Tioga County.

 

Permalink Reply by George Donovan on August 28, 2014 at 11:30am

Thanks Jack,

  I have a couple of questions on comparative geology. The  Oriskany wells at Keeneyville  area in Chatam and Middlebury twps and the Oriskany wells in North Sharon and Oswayo twps seem to be within 300' TD of each other and very similar. Can we assume the deeper Utica Geology could be similar too?

My second question is on the Alegany Burkett well not declining. Am I wrong in thinking that that well is under extreme choke to not decline or is there another explanation? Thanks in advance

Permalink Reply by Jack Young on August 28, 2014 at 2:47pm

The way the basin lies the Oriskany is at depths that are fairly similar across almost the entire northern boundary of Pennsylvania. The Utica is a good bit deeper (2,000'?) in Chatham Township than it is in Sharon Township, however. There's not a fixed relationship between the two formations, and depth is only a tiny factor in the Utica prospects of these areas anyway.

The Burkett well in Allegany Township is declining, and I'm not aware of any choke being applied to it - certainly East had none when they were the operator. Daily production is down about 40% from the start. What keeps the decline appearing limited is that the pipeline it feeds into seems to take less gas in the winter, and that lets the well recharge a bit. There have been months when the well is making only about 15% of what it started out doing. But these apparent seasonal restrictions are limited. Some winters have been more problematic than others.  

 

Permalink Reply by Jack Young on August 28, 2014 at 3:04pm

Just looked at the actual monthly production figures for the Allegany well. Except for the rare month when the well is catching up, it's down closer to 60% from the initial production rate. It's only the catch-up months that get to my initial 40% decline estimate. The poor months can be down 85%, but I assume that's a seasonal pipeline issue. It's a nice little well, but little is the operative word. The gas production isn't enough to show a profit despite the gradual decline. But it's better that all but a handful of the Marcellus wells in Potter County, so I'm not complaining.

Permalink Reply by buggs on August 28, 2014 at 9:58am

Jack:

You seem to have quite an understanding of Shell and their movements, I'm curious as to where you obtain your information.

Permalink Reply by Jack Young on August 28, 2014 at 2:27pm

We were joint venture partners with East for years, and then with Shell. We have leases with everybody who's a player. And I stay on top of things with all the contacts I've made during 34 years in the business. It's not tough to make some informed guesses when you have all that. Am I always right? Of course not. But I seldom make claims unless I'm pretty sure they're accurate.  

Permalink Reply by buggs on August 28, 2014 at 2:36pm

You provide lubricants & fuel for industry I'm guessing ...

Permalink Reply by Jack Young on August 28, 2014 at 3:07pm

No, we drill and produce shallow oil and gas wells and farm out our deeper rights to other operators. We make most of our money on royalties these days, but things change over time and operations have been important too at various times.

Sorry the discussion got into Potter County so much - wrong place for that.

Permalink Reply by N Bohl on August 29, 2014 at 3:43am

Does Jack or anyone else have any thoughts on what the drilling boundaries will be for Swepi for the Utica? Personally I am most interested in the Southern boundary - it seems not to extend further North than Deerfield/ Farmington line? and not South of Wellsboro? Maybe along Charleston but only the most northern part and through Richmond or Covington?

Permalink Reply by Chester Field on September 9, 2014 at 4:01am

With some of the 2010 5 year leases coming to an end does anybody know what the price for leasing is going for in middlebury center Tioga County?

Permalink Reply by Steven R. Rothenberger on September 30, 2014 at 4:37am

Frank  Did anyone ever answer your question regarding pricing per acre in the Middlebury center area?  I have been approached recently about leasing my acreage in Harrison Twp. 5 Years at $1250.00 per acre with the right to renew for an additional 5 for another $1250.00 or a 10 year lease for $1500.00 both with 13.5% royalties paid on the Gross production at the wellhead with no deductions.  Anybody else getting offers

Joe

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