A packed Tunkhannock Area High School auditorium buzzed on Wednesday evening with one topic: natural-gas lease profits.
The rush is on in western Wyoming County, with the Wyoming County Landowners’ Group and its more than 45,000 acres in the gas-filled Marcellus Shale region recently accepting a lease agreement with the Unit and Citrus oil and gas drilling companies.
Landowners signed for $2,850 per acre sign-on bonuses, minus consultant payments, for five-year leases with 17 percent drilling royalties. If the lands aren’t drilled within five years, there are two one-year extensions each for $1,000 per acre.
The deal was brokered by Jack Sordoni and Chris Robinson, both oil and gas drillers in western Pennsylvania. The terms of the lease provide them with 15 percent of the $590-per-acre sign-on bonus increase they brokered from the $2,260 per acre the land group initially negotiated.
http://www.timesleader.com/news/Wyoming_County_landowners_sign_brokered_gas-drilling_lease_deals_08-13-2008.html
Thursday, August 14, 2008
Wednesday, August 13, 2008
Oil: Iran Urges OPEC to Cut Output if Demand Slows
OPEC should trim its oil output if demand continues to fall in slowing industrialized economies, Iran's OPEC governor Muhammad Ali Khatibi said on Tuesday.
OPEC boosted output for the third consecutive month in July as prices peaked at over $147 a barrel. Top oil exporter Saudi Arabia pumped at the fastest rate for 27 years to meet growing demand. But other OPEC members opposed the move, saying that the hike in prices had been the result of other factors than market fundamentals. Iran and other members of the oil cartel blamed high oil prices on geopolitical factors, sanctions, weak dollar and market speculation. The price has since slipped $34 as record prices at the pump and the slowing US economy crimp demand. "If oil demand continues to slow then OPEC should adjust its output accordingly," Khatibi told Reuters in an interview in his Tehran office
http://english.farsnews.com/newstext.php?nn=8705231027
OPEC boosted output for the third consecutive month in July as prices peaked at over $147 a barrel. Top oil exporter Saudi Arabia pumped at the fastest rate for 27 years to meet growing demand. But other OPEC members opposed the move, saying that the hike in prices had been the result of other factors than market fundamentals. Iran and other members of the oil cartel blamed high oil prices on geopolitical factors, sanctions, weak dollar and market speculation. The price has since slipped $34 as record prices at the pump and the slowing US economy crimp demand. "If oil demand continues to slow then OPEC should adjust its output accordingly," Khatibi told Reuters in an interview in his Tehran office
http://english.farsnews.com/newstext.php?nn=8705231027
Tuesday, August 12, 2008
Marcellus Shale will take 5 years to Fully Develop
The Marcellus Shale, which is located in PA, WV, OH, and NY, will take as long as five years to fully develop. The Marcellus Shale has a lot of potential, but infrastructure issues, water problems will cause a slow down in drilling activity.
I believe the recent fall of natural gas prices was due to wall street thinking that all these shale plays such as the Marcellus Shale, Haynesville shale, and Fayetteville Shale will bring a huge supply of natural gas to the market. This is not really the case. As older wells decrease in production, these new wells replace existing supply. If natural gas prices keep falling, there will be less drilling causing supply to weaken instead of build. The price of natural gas will make the market as usual....if demand is strong, the price will rise bringing on more supply...and vice versa.
To learn more about the companies drilling at the Marcellus Shale, go to http://www.marcellusshales.com/marcellusshalecompanies.html
I believe the recent fall of natural gas prices was due to wall street thinking that all these shale plays such as the Marcellus Shale, Haynesville shale, and Fayetteville Shale will bring a huge supply of natural gas to the market. This is not really the case. As older wells decrease in production, these new wells replace existing supply. If natural gas prices keep falling, there will be less drilling causing supply to weaken instead of build. The price of natural gas will make the market as usual....if demand is strong, the price will rise bringing on more supply...and vice versa.
To learn more about the companies drilling at the Marcellus Shale, go to http://www.marcellusshales.com/marcellusshalecompanies.html
Chesapeake Energy ( CHK ) completes Woodford Shale sale ( BP )
This morning Chesapeake Energy ( CHK ) is out saying they have completed their asset sale in the Woodford Shale. CHK received 1.7 Billion dollars in cash from Beyond Petroleum ( BP )
Aubrey K. McClendon, Chesapeake’s Chief Executive Officer, commented, “We are pleased to announce the completion of the sale of our Arkoma Woodford properties to BP. This transaction was an important aspect of our ongoing asset monetization program and enables Chesapeake to redeploy capital to our Haynesville, Barnett and Marcellus Shale plays and further improves the company’s capital structure.
“We now turn our focus to negotiating joint venture arrangements in the Fayetteville and Marcellus Shale plays. We anticipate selling 25% of our interest in those two plays using a “PXP-style” transaction in which we receive partial consideration in cash at closing and then receive a tax-efficient carry of development costs over time as wells are drilled. There is strong industry interest in both plays and also in our preferred deal structure. Accordingly, we hope to announce transaction details by the end of the third quarter.”
Aubrey K. McClendon, Chesapeake’s Chief Executive Officer, commented, “We are pleased to announce the completion of the sale of our Arkoma Woodford properties to BP. This transaction was an important aspect of our ongoing asset monetization program and enables Chesapeake to redeploy capital to our Haynesville, Barnett and Marcellus Shale plays and further improves the company’s capital structure.
“We now turn our focus to negotiating joint venture arrangements in the Fayetteville and Marcellus Shale plays. We anticipate selling 25% of our interest in those two plays using a “PXP-style” transaction in which we receive partial consideration in cash at closing and then receive a tax-efficient carry of development costs over time as wells are drilled. There is strong industry interest in both plays and also in our preferred deal structure. Accordingly, we hope to announce transaction details by the end of the third quarter.”
Friday, August 8, 2008
T. Boone Pickens - CNBC 8/08/08 Natural Gas - Oil
This morning Boone Pickens was on CNBC talking about www.pickenplan.com his website for reducing our dependency on foreign oil.
T. Boone Pickens has been saying he wants to convince congress that we should switch to Natural Gas as transportation fuel like Gazprom is doing in Europe. Iran is actually switching over to Natural Gas fuel while exporting Oil. Boone Pickens says now is the time....and we need to get this underway soon so in five years we can rely on Natural Gas rather then oil for transportation fuel. ( If you are not aware, Oil is used to produce Gasoline that runs your cars )
This would bode well for the Haynesville shale and the Companies that are drilling this shale
Boone Pickens Oil Prediction - $4 gasoline is to much...demand destruction has come....its going on all over the world especially Europe. Gasoline goes back to $3.50, and then the trend starts back higher again. ( The same thing for Oil )
Boone Pickens is still long Oil through options....he still thinks we can go lower but eventually we will move back higher in oil prices.
T. Boone Pickens has been saying he wants to convince congress that we should switch to Natural Gas as transportation fuel like Gazprom is doing in Europe. Iran is actually switching over to Natural Gas fuel while exporting Oil. Boone Pickens says now is the time....and we need to get this underway soon so in five years we can rely on Natural Gas rather then oil for transportation fuel. ( If you are not aware, Oil is used to produce Gasoline that runs your cars )
This would bode well for the Haynesville shale and the Companies that are drilling this shale
Boone Pickens Oil Prediction - $4 gasoline is to much...demand destruction has come....its going on all over the world especially Europe. Gasoline goes back to $3.50, and then the trend starts back higher again. ( The same thing for Oil )
Boone Pickens is still long Oil through options....he still thinks we can go lower but eventually we will move back higher in oil prices.
Thursday, August 7, 2008
Oil prices going Higher - Natural Gas prices 8/07/08
Oil is up almost $3 this morning to $121.35.....as I expected, the flush under $120 was short lived. People have been preaching under $100 oil for the last few days...and this is the second significant bounce we've gotten since Oil has gone under $130 in the past few weeks.
To me Oil seems like it is putting in a bottom here. People are kidding themselves thinking oil will go to $85. Yes, at $148 we have seen demand destruction but there is still a lot of demand and that is only going to get worse in the coming years.
People that are having a hard time with Oil prices going up should be putting money into the United States Oil Fund ( USO ) so at least when you are getting killed at the pump you are making money back as a hedge. This stock can be bought be anyone!
I personally think we will see $150-$160 oil in the next 6 months as winter approaches.
Natural Gas has gotten killed over the past month....from $14 down below $9...and that to is really to bounce back. Today it is around $9. I have bought stocks like Chesapeake Energy ( CHK ) and XTO Energy ( XTO ) They are huge operators in the shale plays around the United States. The Haynesville Shale has been huge and will continue to get even bigger. If Natural gas prices stay around $9-$10 this quarter, Chesapeake will make about $2 billion dollars this quarter on hedging activity since they lost 2 billion last quarter when Nat Gas was higher. This alone would give CHK stock a pop. Remember this when they report earnings in three months!
To me Oil seems like it is putting in a bottom here. People are kidding themselves thinking oil will go to $85. Yes, at $148 we have seen demand destruction but there is still a lot of demand and that is only going to get worse in the coming years.
People that are having a hard time with Oil prices going up should be putting money into the United States Oil Fund ( USO ) so at least when you are getting killed at the pump you are making money back as a hedge. This stock can be bought be anyone!
I personally think we will see $150-$160 oil in the next 6 months as winter approaches.
Natural Gas has gotten killed over the past month....from $14 down below $9...and that to is really to bounce back. Today it is around $9. I have bought stocks like Chesapeake Energy ( CHK ) and XTO Energy ( XTO ) They are huge operators in the shale plays around the United States. The Haynesville Shale has been huge and will continue to get even bigger. If Natural gas prices stay around $9-$10 this quarter, Chesapeake will make about $2 billion dollars this quarter on hedging activity since they lost 2 billion last quarter when Nat Gas was higher. This alone would give CHK stock a pop. Remember this when they report earnings in three months!
Wednesday, August 6, 2008
Barnett Shale - Chesapeake ( CHK ) record mineral rights lease
Chesapeake Energy CHK is working on a 650 acre lease on Lake Worth and Fort Worth properties located in the Barnett Shale. If this mineral rights lease deal gets done, it will be a record! Rumor has is Chesapeake is ready to pay out a $30,000 per acre signing bouns as well.
About 1,200 property owners in Boat Club Estates, Highland Lake Estates, Jinkens Heights, Crestview, Crestridge, Triangle Estates and Lakeview Estates are involved in the lease. The land is roughly bounded by Lake Worth to the west, Azle Avenue to the south, Boat Club Road to the east and Basswood Court to the north.
XTO appears to have been one of the bidders pushing this deal to a record.
Full Article Here
About 1,200 property owners in Boat Club Estates, Highland Lake Estates, Jinkens Heights, Crestview, Crestridge, Triangle Estates and Lakeview Estates are involved in the lease. The land is roughly bounded by Lake Worth to the west, Azle Avenue to the south, Boat Club Road to the east and Basswood Court to the north.
XTO appears to have been one of the bidders pushing this deal to a record.
Full Article Here
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