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

  • Tom Blackall

    Why aren’t you companies buying out the cheap leases from Chief, offering a little more to those land owners, and putting the whole package together?

    Seems to me your Missing an even bigger package and I know the Chief people would welcome you with open arms just to get something accomplished. I don’t believe you would have to break the bank to accomplish the task……….Be Blessed

  • Art Freeman

    These companies keep their production numbers so secretive that one can only imagine the real value of the land.

    Perhaps it is Rural Legend, but in Washington County PA we continually here of yeilds to the land owner of tens of thousands of dollars per acre once production begins. The landowner typically is getting 1/8 to 1/5 of the production yield, so the gas companies are getting God knows how much!

    Finally, I have heard of no one who has recieved more than $3,500 per acre for a 5 yr lease, and the amount is typically much lower.