Chesapeake Energy announced its position in the Utica Shale play of Ohio today.
Chesapeake Energy Announces Utica Shale Position in Ohio
Rumors have been that lease offers have climbed to $2,500 per acre. Chesapeake noted its position of 1.25 million acres had a cost basis of $1.5-2.0 billion, which equates to $1,200 to $1,600 per acre. The average Utica Shale royalty for the company is 15-17% with leases that have a primary term of 5 years, with an option to extend for 5 years. These terms are much more favorable to the oil & gas operator than companies are getting in other shale plays.
Right now, That is all that they are.....rumors.
If you hear anything let me know......they are putting new landman contracts in Ohio. Checkout http://oilfieldservices.org/
Thanks for the update / post.
Landowners will love this, now the producer can open the well and start flowing natural gas,without gas lines on the property. This also starts the revenue for landowners.
"Chesapeake Energy announced its Utica Shale acreage position in its quarterly earnings call this morning. The company has leased over 1.25 million acres in the Ohio Shale and expects the acreage could be worth $15-20 billion."
From Dave Thompson's post "Utica Shale Leasing"; the 1st sentence in the linked article within is repeated immediatley above for easy reference.
As I understand that CHK wants to sell quite a bit of their 'position' (leasehold Acres in the Utica), then the following math seems to make sense to me:
$15.0 Billion / 1.25 Million Acres = $12,000.00 per Acre (as the CHK estimated low end value).
$20.0 Billion / 1.25 Million Acres = $16,000.00 per Acre (as the CHK estimated high end value).
So, by that math I'm guessing their asking price to be between $12.0 k to $16.0 k per Acre ?
In my opinion, if a landowner can get half of that ($6.0 k to $8.0 k per Acre) they would be doing quite well.
Anyone care to check my math - please feel free / comment / keep me in your loop.
Joe,
The only natural gas flow without gas lines on property that I can envision would be to the flare stack - unfortunately and wastefully.
Joseph Farley said:
Landowners will love this, now the producer can open the well and start flowing natural gas,without gas lines on the property. This also starts the revenue for landowners.
You think they're asking that much these days ?
Joseph E. Powell said:
"Chesapeake Energy announced its Utica Shale acreage position in its quarterly earnings call this morning. The company has leased over 1.25 million acres in the Ohio Shale and expects the acreage could be worth $15-20 billion."
From Dave Thompson's post "Utica Shale Leasing"; the 1st sentence in the linked article within is repeated immediatley above for easy reference.
As I understand that CHK wants to sell quite a bit of their 'position' (leasehold Acres in the Utica), then the following math seems to make sense to me:
$15.0 Billion / 1.25 Million Acres = $12,000.00 per Acre (as the CHK estimated low end value).
$20.0 Billion / 1.25 Million Acres = $16,000.00 per Acre (as the CHK estimated high end value).
So, by that math I'm guessing their asking price to be between $12.0 k to $16.0 k per Acre ?
In my opinion, if a landowner can get half of that ($6.0 k to $8.0 k per Acre) they would be doing quite well.
Anyone care to check my math - please feel free / comment / keep me in your loop.