Chesapeake Energy Paying $2,500 per Acre to Lease Utica Shale

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An article on the Forbes website covers a recent energy conference held by Yale alumni. The focus of the article is on how America’s shale gas has turned around chemical companies. But MDN found this interesting paragraph talking about the Utica Shale:

Shale gas is expected to supply 45% of  the U.S. market by 2025. That’s bad news for producers with expensive reserves, and even low-cost producers were fretting at the conference about a growing bubble as drillers punch holes in the ground simply to avoid losing control of leases that require drilling or they expire. This use-it-or-lose-it behavior has trapped drillers in previous gas booms and once again, Chesapeake Energy seems to be leading the charge, paying $2,500 an acre for dirt in the Utica Shale that others acquired for as little as $150.*

In many places where there is Marcellus Shale, if you go another mile or so beneath it, you will find the Utica Shale layer. This is a news site about drilling in the Marcellus because that’s where the action is right now. But increasingly MDN hears about the Utica Shale. So from time to time when those stories come along we may share a few of them as it may impact landowners who also have Marcellus Shale.

*Forbes (Apr 9, 2011) – Shale Gas Sparks A U.S. Chemicals Renaissance

5 Comments

  1. CHK will be announcing it’s new oil rich play in the US sometime before or at it’s 1st quarter CC in less than 1 month… Their is big speculation that it will be the Utica ,just under the Marcellus and ringing the outer Marcellus .. It should run from WV to Eastern Ohio up into NY State and back down to NEPA… Actually I have been watching things for awhile and this is my observance..
    I also Have a friend who has 1 acre of land in the Dimock area and he has been receiving on avg 750.00 a month with 16% royalty… If you use the royalty calculator he would not be receiving anywhere near that amount even if the well was gas prolific… I can only assume they hit oil..
    I plan on contacting him to see if it has gone up some since oil has been rising lately to verify my suspicions…