Replies to This Discussion

Permalink Reply by DSFS on September 19, 2017 at 5:05am

Proctor twp,Wetzel County Wv.

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Permalink Reply by LAMAR R KING on September 19, 2017 at 9:07am

your gas price looks right[sad to say] for july and august prod.

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Permalink Reply by H.W. Plainview on September 25, 2017 at 4:35am

It's very possible that your "Oil" is actually liquids. On average, a barrel of natural gas liquids trades at about 50% of WTI Crude. And WTI has been hovering around the $50 mark during the period in question. 

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Permalink Reply by DSFS on September 27, 2017 at 12:54am

EQT takes another swipe at it's royalty owners. I had a lease with Stone Energy . Received checks for 10 months before their sale to EQT. Stone checks had no deductions per their lease on any check. The very first check from EQT had 25% in deductions. Had our atty contact them and they decided to not honor the lease but only to talk a bunch of legal jargon that they are "entitled to the deduction" Avoid these guys if at all possible. Can't be trusted!!!

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Permalink Reply by Daryl Brown on September 27, 2017 at 10:38am

Not trying to make light of your situation but your angst over price has nothing to do with EQT.  The market is what it is........  In fact just so you're prepared and it doesn't ruin your Christmas the price for October production looks to be near $1.00 before any deductions so don't go do something crazy for Christmas and put it on your card thinking you'll pay if off in January with your royalty check.  I'm not kidding prices in the region are just simply anemic.  Hate to be the spoiler but Sept - November are looking pretty poorly.  

Btw - Stone Energy went bankrupt so before you sing their praises too loudly consider their end.......  just sayin

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Permalink Reply by DSFS on September 27, 2017 at 10:45am

Daryl- You must work for an OIl company. A lease is a lease. I don't care rif Stone went bankrupt you idiot. Its a NO Deduction Lease .

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Permalink Reply by Daryl Brown on September 27, 2017 at 10:49am

I'm not questioning you on that issue.  If that is the case you should definitely pursue the matter and I wouldn't blame you one bit.  I'm not against you my friend.  You know your business better than I and you have the lease in your hand.  I am not your enemy.  I am however telling you the truth about pricing.  The price for natural gas in particular is sad in WV so just prepare yourself now for what is to come.  It will improve in time but for the next 3-6 months you're going to be disappointed when you open that email or envelope or whatever.......   

My Stone comment was strictly to say those guys may not but the ultimate in E&P success............  

Peace Brother I'm your friend.........

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Permalink Reply by Bernie Horabik on September 28, 2017 at 12:50am

DB

Is the negative differential getting worse for EQT because I though it was shrinking with all the new pipe?

NYMEX has hovered around $2.90 so with a negative differential of 50 cents you would think folks would net something above $2.00 for a sales price?

Confused?

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Permalink Reply by Daryl Brown on September 28, 2017 at 2:10am

Bernie,

The Dominion index for September was $1.70ish and the TETCO index was just above $1.60.  Those two indexes for October will be roughly $1.10 - $1.15.  (I cannot give exact prices as these are trademarked by PLATTS)  Prices for November look to be roughly $1.00 discount to Henry Hub so there are a few more months of pain before any potential impact from the new pipes starts to manifest itself.  The Cal 2018 pricing looks to be roughly 50 cents behind Henry but keep in mind these are just where futures are trading today and actual settlement prices could vary greatly.

To answer your question the new pipes are anticipated to improve "in basin" pricing but production is also ramping up very vigorously so there is a fair amount of consternation as to whether these new pipes fill up quickly or if they remain underutilized which should result in discounts being much less than historical averages.  One thing is for certain that not all NEW PIPES are created equal and some of these pipes are being built to markets that may not be able to consume all the new supply thus there could be "gas on gas" competition in these delivered markets.  Some of that gas the Marcellus will be running into is cheap Canadian supply as well as Rockies supply that has nowhere left to go except these same destinations.  To illustrate my point the price for gas in Canada recently traded below 10 cents and in some cases actually traded negative such that they were paying people to take it.  That is an extreme situation caused by many factors that should be short term in nature but to my point the Canadian supply that will compete with Marcellus and Utica in the US midwest can and will be very competitive so buckle up it may get bumpy.  Probably a lot more information than you wanted to know, but I could go on for days about the fundamentals of the region.  The Marcellus and Utica are unquestionably the two premier basins when it comes to natural gas so one thing seems to be certain is that producers will continue to drill with an eye to the future when demand in the gulf coast is set to ramp up materially when LNG facilities become operational in a few more years.  Also, our good friends to the south (Mexico) seem to have a real thirst for US supply as well.  All good news for the US so hopefully you will all see prices improve and lots of new drilling in your region.  

EQT in particular is an exceptional operator.  I do realize there are royalty owners who may be disgruntled with them as they are with any company but all in all they are a great operator and very good at what they do.  One thing mineral owners don't often appreciate is the quality of the well that is ultimately drilled on their lease.  Some guys can stink it up by doing a poor job with drilling and completion thus the mineral owner never really gets the full benefit of the minerals, but the EQT team does have a reputation for being exceptional and that is something you can take solace in when you are leased to them.  No one can control price but all can control quality!!!

Love to answer any additional questions you may have or at least provide my take..........

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Permalink Reply by Daryl Brown on September 28, 2017 at 5:08am

Josie,

Thank you and happy to share.  The best of the best in terms of resource potential is the northern Marcellus without a doubt.  There are a couple of factors however that are negative in terms of that location.  

Firstly, there are several new pipes/expansions that will add incremental takeaway options to the northern Marcellus.  The first is Atlantic Sunrise (Transco pipeline) that will add 1.7 BCF of takeaway in late 2018. One half of the 1.7 bcf/day (850K) makes its way all the way to the gulf coast but unfortunately 850K does not and it stays in the NE where there seems to be ample supply that is often priced very cheap.  There is a potential for 2 other projects - Constitution and Penn East but both pipelines face major hurdles with regulators.  Constitution has been essentially blocked by NY State officials that are rogue and have one desire which is to see any pipeline effort fail.  NJ regulators are currently holding up the Penn East project but that one probably has a chance to make it eventually but will be 2020 in my opinion at the earliest.  NFG Northern Access (unknown date) and Nexus (late 2018) are also projects that could provide some additional takeaway options for producers, but these also run into the cheap Canadian supply from Montney Shale in western Canada.  Beyond these options the northern Marcellus really doesn't have a way to grow materially and looks to be in a maxed-out situation beyond 2020 time period.  

Great rock and very economic to develop but no real way to gain incremental market share.  The region is very complicated and truly hard to understand how it all plays out from a price perspective but the capability of the region to grow production is astounding.  It is a world class resource!!!  Arguably the best natural gas play in the world.

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Permalink Reply by Daryl Brown on September 28, 2017 at 5:37am

Josie,

That is great to hear and I am hopeful that you will soon see some very meaningful revenue.  I agree Shell is a great company to be leased with and they are certainly doing a fine job of exploiting the acreage you're in.  I'm curious if you know were the Shell wells Utica or Marcellus.  I'm thinking you must be in Tioga county correct?  Shell has test the Utica in that region sometime back but this could be some of their first full scale development efforts if these were indeed Utica wells.  The longer laterals and multi-well pads have really changed the economics for the producers but have also increased the production as well which contributes to the oversupply problem the region has historically been plagued with.  Too much of a good thing is a real problem.

Very happy to make your acquaintance and thanks for sharing the "on the ground" perspective.  I'm sure you saw the CHK news about their Rambo well.  These things are just monsters.

Permalink Reply by Bernie Horabik on September 29, 2017 at 12:10am

Are there any pipelines better than Dominion South that EQT to get the gas out of Greene and Wetzel?

Those #s are horrible?

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