Saturday, June 2, 2012

A bit of "REALLY" interesting news

Quite a bit of interesting news around here lately, I’ll add some personal insights…

CONSOL is the largest coal mining company in the Pittsburgh area, branching out into shale drilling when they created CNX, which is pursuing an aggressive drilling campaign south of Washington, Pa that extends into northern Greene County.

SEC charges three former Consol execs. with insider trading

June 1, 2012 - The U.S. Securities and Trade Commission today sued three former Consol Energy executives in federal court, accusing them of using insider trading to either profit or avoid losses when the company’s stock price dipped through the purchase of a Marcellus Shale exploration and production company.

The SEC named in the lawsuit Charles E. Mazur Jr. of Eighty Four, James S. Poland of Washington and Joseph A. Cerenzia of Canonsburg, claiming they sold their Consol stock prior to the Southpointe-based company’s March 15, 2010, announcement it acquired Appalachian Exploration and Production from Dominion Resources Inc. for $3.74 billion, court records show.

Great Lakes Energy Partners is the banner that Range Resources first entered our area under, when they were partnered with First Energy. Range later bought out First Energy (see ‘Range History’ at bottom of email).

Chesapeake Energy, lease at crux of lawsuit

June 2, 2012 – An Avella couple has filed a lawsuit against Chesapeake Energy Corp. claiming the natural gas drilling company filed a false legal notice in an attempt to extend its lease. According to the complaint, the Briggses entered into an oil and gas lease with Great Lakes Energy Partners in 2005 for 131 acres, for which they were paid $8 an acre and 12.5 percent royalty. The lease expired five years later but the couple had 60 days to extend or renew it under similar terms.

By this time, the lease had been acquired by Chesapeake Energy. In 2010, Chesapeake entered into negotiations with the Briggses to extend the 2005 lease and made an offer of $4,250 an acre with 18 percent royalty. However, the company and the Briggses were unable to reach an agreement prior to the expiration of the lease.

There is no doubt that leased acreage is worth much more than what gets paid to landowners, but how much more? Depends on who is valuing those leases, and when, it appears.

Chesapeake: Utica Shale Is Worth $13,000-17,000 Per Acre

June 2, 2012 - Chesapeake Energy believes every acre of its oil and liquids-rich Utica Shale play is worth $13,000 to $17,000. Chesapeake recently noted that wet gas wells - those producing ethane, butane, propane, pentane and other liquid properties, as well as the dry methane gas - can be worth about three times as much as the wells that yield only the dry methane gas.

The investor presentation shows that Chesapeake classifies its West Virginia acreage in the same category as its Ohio acreage under the Utica Shale banner. It shows the company having significant holdings in Jefferson, Harrison, Columbiana and Carroll counties in Ohio, along with some holdings scattered throughout Belmont County. According the investor presentation, Chesapeake places a value of $30,000 to $50,000 on each acre of land in its Eagle Ford Shale play, based in Texas.

Why does this story remind me of Pinocchio and his ever-lengthening nose? Great place for a *possible* fracking and gas well site, next to a surgery center and medical office building! If someone was writing this book, you would have to title it ‘Stranger than Fiction.’

Range seeking permit for South Strabane

June 2, 2012 - Although Range Resources says it has no current plans to drill for natural gas in South Strabane Township, the company is applying for a well pad permit there. Range has submitted an earth disturbance application to the state Department of Environmental Protection for property on Route 19 where a mixed-use development is planned. The property is known as the Meadows Landing development, located across the highway from the former Curringa's restaurant.

Matt Pitzarella, director of corporate communication for Range, said the company has no plans to drill. He said it is not unusual for the company to apply for more permits than it intends on drilling to provide them with planning flexibility. The Meadows Landing development fronts Route 19 and is undergoing grading. The first project in the mixed-use development will be construction of a surgery center and a medical office building.

This is the same judge who presided over the sealing (and potential unsealing) of the Hallowich case.

Judge stripped of criminal cases

June 1, 2012 - Washington County Judge Paul Pozonsky was stripped of his criminal caseload Thursday in a two-sentence order handed down by the president judge.

The administrative order by President Judge Debbie O'Dell Seneca reassigning Pozonsky's duties to include only civil jury and nonjury trials seemingly took everyone at the courthouse by surprise - except for the president judge and District Attorney Eugene Vittone.

RANGE HISTORY (Source: Reference for Business)

In 1998 Range Resources lost $175.2 million while generating $146.6 million in revenues, the result of poor commodity prices and failure of the company's recent purchases to perform up to expectations. Much of 1999 was devoted to retrenching efforts. Noncore assets were sold off to reduce debt and the company cut back on its drilling budget for the year. Range Resources formed Great Lakes Energy Partners, a joint venture with FirstEnergy Corp. in the Appalachian Basin that allowed Range to contribute property that included $200 million in debt, thus allowing the company to reduce its bank debt considerably, to just $160 million. An exchange of common stock for fixed income securities helped to reduce debt further, to approximately $90 million. By the end of the third quarter energy prices rebounded and Range Resources finally began to return to profitability.”

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