Chesapeake & Range Resources Peg Value of Their Marcellus Shale Holdings from $36K – $56K per Acre

Range Resources CEO John Pinkerton said that their holdings in the Marcellus Shale play are worth more than four times the $14,000 per acre that recent deals between energy companies have brought. Chesapeake Energy CEO Aubrey McClendon says his company’s Marcellus Shale holdings are worth $35,900 per acre to the company. With 1.57 million acres leased, that’s an astonishing $53 billion worth of value for Chesapeake!

If those values are true—and not just hype for investors—that would make the recent deals between Reliance and Atlas Energy ($14,167/acre) and Misui and Anadarko Petroleum ($14,000/acre) real bargains.

MDN Note: These prices are not the prices energy companies pay landowners to lease land. Lease prices are more in the range of $5,000 per acre recently. Rather, this is the value energy companies say an average acre of Marcellus Shale land will eventually supply in revenue to the company. Not all land is productive, so the number is an average across all leased acreage.

*Tulsa World/Bloomberg News (Apr 14) – Marcellus Shale assets considered valuable

Lehman Township, PA Approves Encana Plan to Begin Drilling This Summer

Encana has gotten a green light from the supervisors in Lehman Township (Luzerne County, PA) to begin drilling this summer. The board approved an ordinance allowing the drilling to begin. According to Township Zoning Board Solicitor Jack Haley, the supervisors had little choice:

According to Haley, all authority to halt drilling operations in any municipality in Pennsylvania lies in the hands of state agencies, not local governments. The township’s rules are “superseded” by the state Oil and Gas Act, he said.

The state Supreme Court already reviewed two similar cases, he added, and decided the only authority Lehman Township has applies to what roads EnCana can use.*

As for the motion/ordinance and what it says about the roads:

[Board of Supervisors Vice Chairman Ray] Iwanowski outlined six conditions to the motion: that EnCana put up $13,540 to maintain Firehouse Road through the total time it is used; EnCana put up $32,192 to maintain Peaceful Valley Road similarly; all traffic related to the drilling traverse on Firehouse Road toward state Route 118; no traffic will go on Old Route 115 in the township (near the school); EnCana provide adequate insurance coverage for the township, and that a legally binding agreement be signed by EnCana holding it to its commitment.*

*Wilkes-Barre Times Leader (Apr 14) – Lehman Township says yes to gas drilling

New Pro-Drilling Documentary “Gas Odyssey” Premiers Friday, April 16 in Binghamton, NY

A pro-drilling documentary is due to premiere Friday, April 16th in Binghamton. Unfortunately MDN will not be able to attend the screening. If others do attend, please let us know what you think! Details below.

From Red Dragon, Inc.:

Red Dragon, Inc. is proud to announce the premiere of Gas Odyssey, a documentary film by Aaron Price. The film is about the development of natural gas from the Marcellus Shale in the Southern Tier of New York and Susquehanna County, Pennsylvania.

Where: West Middle School
West Middle Avenue
Binghamton, NY 13905

When: April 16, 2010

6:45 pm “Red Carpet”

7:00 pm Gas Odyssey

9:00 pm Reception

Contacts: Aaron Price, Filmmaker
[email protected]
607-655-3600

Carolyn Price, Production Assistant
[email protected]
607-655-3600

News Channel 34 (Apr 14) – Gas Odyssey Premiere Thursday, April 16

Big Marcellus Shale Drilling Conference Set to Convene in Pittsburgh May 3-4

A big confab is due to take place on Marcellus drilling in Pennsylvania in early May. It’s being hosted and sponsored by the Pennsylvania Environmental Council. It looks to have a slate of both pro- and anti-drilling speakers. Cost to attend is $350. More information about the program is available from the PEC website here: www.pecpa.org/marcellus. The official press release is listed below.

From the official press announcement:

PITTSBURGH–A “who’s-who” of leaders in Pennsylvania’s burgeoning Marcellus Shale gas industry are set to convene in Pittsburgh next month for what is considered the most comprehensive forum on this topic ever held.

The Pennsylvania Marcellus Shale Policy Conference, co-sponsored by the Pennsylvania Environmental Council and Duquesne University, will be held on May 3-4 on the campus of Duquesne University. The program already has attracted a VIP lineup of gas industry representatives and government officials from as far away as Texas, Colorado and other parts of the United States, as well as many of Pennsylvania’s highest ranking government officials in the fields of environmental regulation.

A number of prominent experts and industry officials will address the conference, including:

  • John Hanger, Secretary, Pennsylvania Department of Environmental Protection
  • John Quigley, Acting Secretary, Pennsylvania Department of Conservation and Natural Resources
  • J. Scott Roberts, Deputy Secretary for Mineral Resources Management, Pennsylvania DEP
  • Scott Perry, Director, Bureau of Oil and Gas Management, Pennsylvania DEP
  • Joanne Denworth, Senior Policy Manager, Office of Governor Edward G. Rendell
  • Kathryn Klaber, President, Marcellus Shale Coalition
  • Don Welsh, President, Pennsylvania Environmental Council
  • Nels Johnson, The Nature Conservancy
  • Aaron Ritz, Clean Air Council
  • Kathy Pape, President, Pennsylvania American Water Company
  • David Hess, Former Secretary, Pennsylvania DEP
  • Hannah Wiseman, University of Texas School of Law
  • Jeffrey Jacquet, Cornell Cooperative Extension Marcellus Shale Team
  • David Neslin, Director of Oil and Gas Commission, Colorado Department of Natural Resources
  • James Martin, Chief, Oil and Gas Office, West Virginia DEP
  • Scott Roy, Vice President, Range Resources

…as well as a number of other Marcellus Shale experts from industry, academia, government and the non-profit sector.

Continue reading