Was looking today at the core Utica Oil window in Guernsey County and was shocked to see leases being released by Eclipse and Ascent in Londonderry Oxford Wills Madison townships. I would think they would keep these parcels tied up but looks like not. Wonder if we are looking at a real cool down in drilling as the oil window is the best place to be since the asian LNG bust where prices have dropped through the floor for LNG
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leases are being extended central guernsey co. Center twp. Wills twp. Madison. bigger % of oil in them wells.
It appears Gulfport is doing the same thing in Monroe County...
To me - it’s a matter of $$
If a lease term is up...they either need to begin production before end of term, re-up at the same bonus to re-extend the term another round or re/sign at better terms - walk away.
Many of these leases being let go were signed in 2014-2015 (pinnacle of the market) so unless you can find money to drill it, your bonus payment would be $$$$. Offering better terms knowing some landowners will refuse worked for Eclipse a while from 2016-2017, but eventually they had to admit they had too much land and no hope of drilling all of it within 5 years.
Selling to someone else...again, just too much land not enough rigs and why buy short term when you can pick the best for pennies unsigned?
There is still production- and will be for 10+ years...it’s just a matter of cost. Land that was bought and being dumped now is cheap...an operator like Ascent can make $$ still at $2. When the operators need supply - they will have plenty of willing landowners signing on...just like the did in early 2000s with offers of $5-100 an acre and 12.5% leases. Just takes a few years to really reset expectations.
Sub standard intellect in charge...
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