Fossil Creek Targets WV Utica Shale, Big Bucks for Leases/Drilling
The Utica Shale “rush” has arrived–in West Virginia. Bedford, TX-based Fossil Creek Ohio (a company we’ve not heard of before today) is signing up Utica Shale leases in Marshall County, WV and says they will begin to sink wells “in the near future.” Fossil Creek President Chris Rowntree declined to say how much the company is paying for lease bonuses and royalties, but he did say it’s more than any other company is paying (which would indicate something north of $7,000 per acre and 20% royalties).
Also of interest to MDN are the numbers thrown out by Fossil Creek for how much they will spend to drill a single Utica well in WV: $22 million on average. That is a startling number. Most Marcellus wells in the area cost around $7 million to drill. If you spend three times that to drill a Utica well, you better be convinced you’ll get three times the return you would receive from a typical Marcellus well to make it a profitable venture–unless you simply have money to burn. Yes, color us skeptical that anyone will make money by spending $22M to drill a shale well! Here’s more on Fossil Energy and several other companies pursuing the Utica Shale “rush” in the Mountain State…
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