Marcellus, Utica/Point Pleasant Shale Play

C

Chris Todd

501 Club
Hey All, I am wondering how many of you are, or have had dealings with the Marcellus/Utica Shale play that's been sliding west the last year or so? It's into Ohio now and I've been double checking my Oil/Gas lease and getting to local meetings as I can. Am sure it has been quite a boon to some and heartache/headache to others. The financial gains for some could be staggering. Some numbers from Guernsey County have reached 5000.00 per acre bonus and 20% royalties on the gross. Who'd a thunk!
 
We are about right near the center of it in south western pa. There are two wells within a mile from our house.
 
Sure steps the traffic up doesn't it Matt. Is your water tasting any different yet? :) Hope not. A lot of things ride on drilling and managing these safely.
 
This drilling, while very necessary in my opinion sure is taking a toll on lots of industries in the country. I work in the food industry and sell "gums" for use to help stabilize and thicken foods. One of the key products that I sell is Guar Gum, which comes from bean seeds grown in India and Pakistan during monsoon seasons. It "used to be" the most economical thickener and stabilizer around, running about $0.65 - 0.80 per pound (0.80 being a REALLY high time). Well, since the discovery of the fracking technique of drilling for oil and gas, they have to have a way to suspend the fracking sand in water when they drill and fracture the rock...THey need something REALLY THICK and REALLY CHEAP... That turned out to be Guar Gum.

Our pricing for Guar has skyrocketed over the last year and we are paying $2.50 - $3.00 for the same gum! Since our products are food grade, we have to have testing for human consumption...fracking companies don't have to have this testing. We are now competing with gas and oil companies going to India and buying the bean splits directly from the growers and taking supply out of the marketplace. While I really love the growth of this industry and the independence from foreign supply that comes from it, I don't know how much more the food industry is going to be able to bear with the price increases.

It also turns out that western Wisconsin has a rich deposit of the fine silica fracking sand that is needed for these operations, so we have seen a huge increase in the development of sand mines in our area...it is now taking a toll on the roads and infrastructure here. I look at it as a net positive, though...in order to grow that infrastructure, we have to build more roads, and grow the water supply and need workers to mine the sand and drive the trucks, etc... It is a great boom for the economy in our area as long as they are cautious with the surroundings...

Plusses and minuses with this whole phenomenon...

Mike in La Crosse, WI
 
http://www.rigzone.com/news/article.asp?a_id=114481

Above an article on a gas driller cutting back on production due to the low price of natural gas.

Rigzone is a free daily publication on oil and gas production. About a week ago Rigzone had an article on the discovery of a very large oil find in Wyoming.

Yup. A lot of plusses and minuses in more oil and gas production. Big factor is employment. Employment not only in oil/gas industries but also in ancillary industries supplying products.
 
The best advice I can give anyone that has acreage that is in or near these oil/gas plays is to check the status of your mineral rights!! There are many instances where an owner thinks that they do/don't own their rights only to find out differently on down the road,...sometimes too late. Get educated! Many leases were written reading for instance "from surface to bottom of Clinton sand formation" or other formation levels. And in my area the Utica lies about another 800' to 1000' below that so if everything else is ok you should be able to lease your Utica. I'm not sure if I can add a link to another forum on here, but here is one to a very informative land owner based forum that I found and subscribe to. Covers PA, WVA,OH A lot of good info!

http://gomarcellusshale.com/
 
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