As natural gas companies buy, trade and sell leases with one another, property owners often don’t know who might show up to inspect, survey or drill on their land. When renewal time arrives the property owner might be presented with a very different deal. More on the Post-Gazette.com website.
Jim Cramer preaches that the United States has enough resources to become energy independent and interviews T. Boone Pickens on energy independence topics.
More at CNBC Mad Money.
Consol Energy has agreed to sell half of its 663,350 acres of Marcellus Shale in Pennsylvania and West Virginia along with half of its existing wells to Noble Energy for $3.4 billion.
More in the Post-Gazette.com.
According to a report on FuelFix.com, Marathon Oil will acquire 141,000 net acres of Eagle Ford Shale holdings in Atascosa, Karnes, Gonzales and DeWitt counties, Texas for $3.5 billion.
An article in the Columbus Dispatch reports that the State of Ohio considers leasing state park lands for natural gas production from the Utica Shale. However, they only own the mineral rights to about 1/3 of the land and the mineral ownership for many more parcels is unknown.
The Pennsylvania Game Commission hopes to generate millions of dollars in revenue by expanding the natural gas leasing program on Pennsylvania Game Lands. More in the Wall Street Journal.
A post on the Seeking Alpha blog details how successful Chesapeake Energy has been at rapidly leasing enormous acreages in all of the major natural gas shale plays in the United States. They author calls them a “land acquisition machine”.
A letter published in The Ithaca Journal complains about the many foreign companies who have purchased major stakes in United States gas shale companies.
The Texas Army National Guard wants to buy 22,232 acres of land over the Eagle Ford Shale and owners of the land under consideration don’t want to sell because they want to keep the land for potential oil and gas royalties. More in the Houston Chronicle.
The American Right of Way Associates will hold an Eagle Ford Shale Training Class on Saturday, January 29th in San Antonio, Texas. The class is titled “Right of Way Acquisitions & Land Title Training Program”. It teaches the skills necessary for right of way agents and title agents to serve the various oil and gas companies working in the Eagle Ford Shale play. More at PR.com.
The Texas Railroad Commission’s Rule 37 is the subject of an editorial in the Fort Worth Star-Telegram. The author explains how this rule that regulates the spacing of oil and gas wells seems to be used to as a way to avoid dealing with Barnett Shale holdout landowners.
“If we go back in time to the days before drilling and mining, real estate transactions were fee simple transfers. However, once commercial mineral production became possible, the ways in which people own property became much more complex. Today, the leases, sales, gifts and bequests of the past have produced a landscape where multiple people or companies have a partial ownership of or rights to many real estate parcels.” Quoted from the Geology.com article.
Last year Chesapeake Energy paid out nearly $300 million in Barnett Shale royalties and this year plans to drill over 300 new wells.
A rock layer below the Marcellus Shale could prove to be another incredible source of natural gas. The Utica Shale is thicker, more geographically extensive and has already proven its ability to support commercial production.
This National Geographic article from October 17, 2010 is not “current news”, however, it includes some interesting perspectives related to drilling for natural gas from the Marcellus Shale beneath State Park lands in southwestern Pennsylvania. Issues include: environmental impact, development footprint, who gets the royalties and more.
SeekingAlpha.com has a really interesting article on the wellhead side of natural gas economics that most people will be able to read and understand. The title is: “Estimating the Breakeven Costs of Shale Gas“.
Ohio didn’t get very much action when landmen were leasing the Marcellus Shale. However, now that the Utica Shale – a rock unit below the Marcellus – is getting attention, leasing activity in eastern Ohio is finally taking off. More in the Columbus Dispatch.
Encana Oil and Gas announced that their two Marcellus Shale wells in Luzerne County were not commercial and that they will immediately stop drilling in Columbia County and Luzerne County, Pennsylvania. They have 25,000 acres under lease in those counties. More at The Times Leader.
Columbia and Luzerne counties are in the eastern part of the state where the rocks have been metamorphosed to a level where much of the natural gas has probably been driven off or destroyed.
An article on the Platte County Reord-Times websites explains the consequences faced by a “hold-out” landowner when forced pooling is instituted on a Niobrara Shale property.
Companies competing for select properties over the Niobrara Shale play in eastern Wyoming spent a record amount of money at a recent state lease sale held by the Wyoming Office of State Lands. More in BusinessWeek.com.
How much is an acre of natural gas shale rights worth? Perhaps the best way to determine that is to calculate how much the big companies pay when they buy assets from one another. Shouldn’t they have a better handle on the value of the gas than just about anyone? Sometimes the prices will surprise you. An article in Daily Wealth looks at big transactions and sees prices of $10,000 and $12,000 per acre in the Eagle Ford. That could be considered a “retail price” and when they buy it from a landowner they expect to pay a lower “wholesale price”.
Paupua New Guinea has a wealth of natural gas resources and could bring in billions per year as they are developed. The challenge there could be developing good lease and royalty arrangements with thousands of people who own very tiny plots. More in an article on the SFGate.com website.
Will natural gas companies shut-in some of their wells in response to low gas prices? A Reuters article reports that Exxon does not plan to shut in the former XTO Energy wells but ConocoPhillips has shut-in some wells.
There are a number of reasons why some companies do not shut-in wells. These include: the possibility of even lower prices in the future, difficulty restarting the well and obtaining original production levels, long-term supply agreements and more. For more details see the “Industry and Market Structure” page of NaturalGas.org (fifth paragraph from the bottom).
An explosion of natural gas from shale is swamping the market with an abundance of new gas, upsetting investment models for LNG terminals and making gas cost-competitive with coal. More at The Hill.
Lots of people have leased their acreage for potential gas drilling and are curious about how much their royalties might amount to. We now have a tool to estimate gas royalty income based upon a few assumptions. You just type in your royalty rate, an assumed natural gas wellhead price, an assumed well production rate, the number of acres in the production unit and the number of production unit acres that belong to you – then push a button.
A Catholic cemetery association has leased over 1000 acres of land giving Huntley & Huntley a five year option to drill for natural gas. More at the Lebanon Daily News.
Who owns the mineral rights beneath your property? That can determine what drilling companies can do and what rights a landowner has when drilling begins. More in an article on the ArkTimes.com website.
Drillers are now starting fewer wells – but those wells are a lot more expensive. State revenues from natural gas drilling are increasing. Electric utilities are switching from coal to gas. An article at Herald-Dispatch explores these and more.
BusinessWeek.com.When an oil or gas well is drilled it withdraws fluids from beneath lands surrounding the well. This gets more complicated when a well is deviated to horizontal below the ground and penetrates beneath many land parcels. Pennsylvania might have a bill this fall that requires groups of landowners to enter into certain extraction / compensation arrangements even if some do not agree. More at
Marcellus Shale landowners challenged Range Resources on deducing transportation and processing costs from the production value of natural gas before making royalty payments. More at OilPrice.com.
