|
|
Leasing in shale areas being cut back BY JOSH MROZINSKI For instance, Long Consulting Group of Olean, N.Y., said in a September letter that Chesapeake Energy is rescinding offers for natural gas leases. “The industry as whole spent too much on land,” Subash Chandra, an analyst with Jefferies & Company Inc. of New York, said. “Generally speaking, the speculative land bubble is over.” That does not mean, however, that Chesapeake and other natural gas companies are ending lease activity altogether. Mr. Chandra noted that Chesapeake is selling leases in the Marcellus Shale. “With the absence of long-term liquidity on the market, they (Chesapeake) will have to pare back,” Mr. Chandra said. Chesapeake spokesman Matt Sheppard said the company has invested heavily in the Marcellus Shale during the past 18 months. “During that time, we have acquired a very healthy leasehold on which we will conduct natural gas operations,” Mr. Sheppard said. Chesapeake is negotiating with the Wyoming County Landowners Group for land. The landowners group has about 1,200 members and represents more than 67,000 acres. Some of its members have signed with Colorado-based Citrus Energy. Noting other companies have reported a pullback in lease activity, Bill Wilson said he is not worried about Chesapeake. Mr. Wilson, who helped found the landowners group, said he believes in “the guy who puts the dollar in your checking account.” He said Chesapeake is just one company with which the landowners group is talking. In Lycoming County, companies are also pulling back, Williamsport attorney Lester Greevy said. He added the pullback began around Labor Day. The attorney negotiates on behalf of landowners. “It’s not just Chesapeake,” Mr. Greevy said. “It’s a number of companies.” Mr. Greevy said companies are faced with a several challenges, including concerns over the credit market and a drop in natural gas prices. For instance, natural gas traded at $6.70 Monday afternoon on the New York Mercantile Exchange, down more than 47 percent from record levels in June of $12.66. As companies deal with the challenges, they are selectively choosing land, Mr. Greevy said. “It’s going to be quiet the next couple of months,” Mr. Greevy added. “I think next spring we’ll see a shift from leasing to drilling.” Contact the writer: jmrozinski@timesshamrock.com
Ads by Yahoo! Search the entire Brevard County Florida MLS. Search 1000's of Buildings For Lease Nationwide. Reader Comments Brian T. wrote on Oct 14, 2008 8:27 AM: |