It's been pretty quiet on the gas drilling front, what with the severe downturn in natural gas prices and the economic crisis that have pummeled natural gas company stocks like Chesapeake and Cabot. New leasing activity came virtually to a standstill in the last month, with lease offers being pulled off the table. But that doesn't mean that gas drilling is dead.
There is an interesting piece today on Yahoo!Finance about Chesapeake selling a 32.5% stake in its Marcellus Shale holdings to Norwegian energy company Statoilhyrdro for $3.375 billion. Statoilhydro will pay "$1.25 billion of the amount in cash at closing and $2.125 billion from 2009 to 2012 by funding 75 percent of Chesapeake's share of drilling and completion expenditures."
It is important to keep in mind that Chesapeake's Marcellus lease holdings extend from New York through Pennsylvania to Ohio and West Virginia, with only a small proportion. So the lion's share of $2+ billion from Statoilhydro for drilling and completion expenditures will likely be spent outside of New York.
Just another company that will file for chapter 11.
Chesapeake expects big losses so they know to get out now.
Imagine a foreign company navigating through our municipalities and various local laws on drilling?
Just another example of dumb mulla chasing smart mulla.
Louis Cappelli and the concord is another great blunder.
Posted by: Mike G | November 11, 2008 at 10:58 AM
http://www.recordonline.com/apps/pbcs.dll/article?AID=/20081112/NEWS/811120339
Posted by: Julio | November 12, 2008 at 09:32 AM
More poverty strikes the catskills
http://www.recordonline.com/apps/pbcs.dll/article?AID=/20081112/BIZ/81112021
Posted by: Lisa | November 12, 2008 at 10:16 AM
Who are these doom and gloomers who post on here? I know this is off topic, but Dave have you heard anything new on the Concord? Friday's article in the Democrat was interesting. It looks like a push to get things moving before the new adminstration is in. Why would the Indians sue the Secratary of the Interior now, when he is on the way out?
Trump is also pushing, and now Cappelli wants what is essentially a 20 million dollar grant from the county? If I were a hotel owner I would be furious at that. Where was Pissante's tax break when he was rebuilding?
It will be intersting to watch over the next few months, but right now with the state as broke as it is, a quick vote on the way out, and way in, and we could have ourselves a shiny new casino.
Posted by: Mark | November 12, 2008 at 11:15 AM
Weekenders need to be aware of locals that break in during these desparate times.
I went through this in the late 80's/early 90's. Times were rough then. Might get worse today.
Many redneck locals have lost their jobs; they look for weekender cabins to find goods they can grab....atv's, small appliances, plasma's, etc.... They know when you are there and when you are gone.
I would have some cameras set up around the premises.
Posted by: Franco S | November 12, 2008 at 11:40 AM
http://www.recordonline.com/apps/pbcs.dll/article?AID=/20081112/NEWS/81112045
Unoccupied 2nd homes burglarized
Posted by: Jim Leher | November 12, 2008 at 07:43 PM
A study came out that claimed the Marcellus shale has 7 times the natural gas than was first estimated. It could last 14 years.
www.timesleader.com/news/hottopics/shale - 53k
Down here in Texas (on the Barnett shale) gas leases have gone from 3k per acre to 24k per acre just for the sign-on bonus.
It's there, it'll just take time. In Texas, in took about 4 years for the drilling to happen in my neighborhood, and I've yet to spot a well. People are seeing money they never dreamed of, some 20k a month in royalties.
Posted by: Mary Ellen | November 12, 2008 at 10:02 PM
Its all going up in smoke with gas leases.
Ask land owners if they have been approached recently. None have.
With commodities falling like rocks, gas companies will be inclined to shut running wells to prop up prices. New wells won't be needed in the next 5-10 years.
Posted by: Boomer | November 12, 2008 at 11:18 PM
I doubt if the gas companies would let the new pipeline rust in the ground.
It's coming-just hold onto your hats when it starts. My tax accountant handles many of the new gas accounts on the Barnett shale, and his advice is, "Wait as long as you possibly can..." The longer this takes, the better off Sullivan County will be.
Posted by: Mary Ellen | November 13, 2008 at 08:39 AM
Unfortunately, large tracts of land are not found here like in Texas, Mary Ellen.
The largest parcel up here might be 100 acres and very few of them. Furthermore, the slumping economy is putting fire under people's feet to sell these abandoned and unused lands. Taxes are escalating and the gas-land man has disappeared....some say for good. NY and Texas are very different.
Posted by: Junior Mac | November 13, 2008 at 09:43 AM
The land tracts in NY are larger than the ones I'm describing here. The people who are receiving these bonuses own suburban lots-not even half an acre. I'm not talking about Southfork.
I live in a place similar to Harrison or Pleasantville-people don't have any land to speak of, but they still must collect royalties if the drilling is happening under their land.
100 acres is huge compared to the tracts I'm talking about
Anyone who is thinking of selling any land in the Catskills should hold on to it at all costs; I have friends purchasing raw land in Fremont as I write this, and they feel lucky to have found it.
Posted by: Mary Ellen | November 13, 2008 at 10:22 AM
They feel lucky to have found raw land for sale in Freemont? What are they shopping for next - trees in a state forest?
Posted by: ross | November 13, 2008 at 03:54 PM
"I have friends purchasing raw land in Fremont as I write this, and they feel lucky to have found it."
lol lucky to have found raw land! That takes the cake on this blog.
Raw Land = Rusty Oldsmobile no body wants.
Try selling a large parcel of land right now in Sullivan. Guaranteed it will not sell past 2500 per acre. Even in Bethel!
The demand has fallen off a steep cliff.
Worse than autos, worse than electronics, worse than the equities market.
Posted by: Watch the Bond Market....It will predict Recession vs Depression!! | November 13, 2008 at 06:54 PM
Hey, where's Dave?
===============================================================
"Don't start me to talking...or I'll tell you everything I know".
Johnny and Shuggie Otis
Posted by: Johnny and Shuggie Otis | November 13, 2008 at 08:04 PM
Mary Ellen,
Where did you park your space ship....I'd like to steal it for a ride.
Posted by: Ghost of housing and land boom | November 13, 2008 at 08:09 PM
I realize it's not cool to be an optimist; I'm telling you what I KNOW, not what I analyze, speculate, read about, estimate or predict from somebody's numbers somewhere in
'we're all goin' to hell' land.
I didn't say the land wasn't cheap-just that they purchased some raw land. (They needed it in a very specific location, hence the 'lucky' part of this.) There are personal situations that you know nothing about.
It's time for your prozac, and I'm late for the spaceship.
Posted by: Mary Ellen | November 14, 2008 at 09:14 AM
Actually, it wasn't raw land. My mistake.
There was an old house on it that they knocked down and removed.
Posted by: mary ellen | November 14, 2008 at 09:26 AM
"They needed it in a very specific location"
Not sure what is so 'specific' about abandoned raw land.....it's really no different than the Nevada desert....I guess your coordinates are important for that prozac spaceship of yours.
Posted by: Julio | November 14, 2008 at 09:26 AM
Good info on upcoming DEC scoping meetings.
http://www.catskillcitizens.org/Nov_2008_update.cfm
Posted by: info4u | November 24, 2008 at 10:29 PM