Value of Gas per acre

A few days ago, being new at this site, I was reading in this blog, a value of gas per acre of 800k. This fascinated me, but I do not remember who posted this info. If you are reading this and are the one who posted this, could you please re-post it and give the source you were using. I remember you said it was from Chesapeak and Petrohawk, but could you be more specific. Was it an article? Was it a financial report from them? Could you provide a link for me to read it?

Thanks very much.

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Permalink Reply by Greedy Landowner on September 1, 2008 at 9:47
They estimate 50 billion cubic feet (recoverable) per section which has been published in a couple of times by both chesapeake and petrohawk either in conference call transcriptions or in media releases. By dividing 50 billion by 640 (acres per section) and then taking that number and dividing by 1000 (to get thousand cubic feet per acre) then multiplying that number by the price of gas gives a value per acre. I used 8 bucks per thousand and ended up with like 700k.
Permalink Reply by Les Bamburg on September 2, 2008 at 15:58
KK, I think the Barnett Shale numbers must be overstated because the BS reserves per acre are only 50 - 60% of the Haynesville Shale reserves. The Haynesville Shale has a much larger area than the BS that results in estimated potential of 5 times that of the Barnett Shale (250 Tcf versus 50 Tcf).
Permalink Reply by Horace Manure on September 1, 2008 at 12:37
Below is what I posted to a Petrohawk Yahoo message board several weeks ago. Since then I have seen nothing new that would change my mind about the "potential" per acre value to these companies.

"CHK CEO Aubrey McClendon said a few days ago they expect to have 52 bcf of "recoverable" gas for each 640 acre section they own. At $10/mmcf gas, this translates to each acre being worth $812,500 to them. We might actually begin to see $40,000 and $50,000 lease bonuses."
Permalink Reply by louisiana lady on September 3, 2008 at 14:15
I can't justify this number with the $175k gross profit/acre/well/year for the O&G. Seems low unless they are using BS production as a start point. Until they start drilling horizontally in all areas with some well production numbers, it is a guessing game.
Permalink Reply by sandra isbell on September 22, 2008 at 7:03
HAVE YOU ACTUALLY SEEN 40K OR 50K LEASE BONUSES YET? I'M SURE HOPING THAT IS EITHER HERE OR ON THE WAY.
MANNA HAS ONLY OFFERED 10K SO FAR. ANY INFORMTION WILL BE GRETLY APPRECITED.
SANDRA
Permalink Reply by sandra isbell on September 22, 2008 at 11:23
I AGREE. I KNOW THEY PLAY HARDBALL...BUT I BELIEVE THEY WILL OFFER MORE TOO.
Permalink Reply by louisiana lady on September 3, 2008 at 14:19
The $812,500/acre was their 75%.
Permalink Reply by buddy on September 3, 2008 at 15:10
the $812,500.00 is the total gas. theres will be there 80%
Permalink Reply by Spring Branch,mineral owner on September 25, 2008 at 2:41
No that was 100%.
Permalink Reply by Alamo on September 23, 2008 at 14:31
I was just catching up on the Haynesville Shale (HS) activity--or attempting to and came across this thread. My take on the net value per acre in the HS is conservatively calculated to be $416,666.

This supposes that the 3.6 million acres holds 250 trillion cubic feet of recoverable gas. At $8.50 per 1000 cft (mcf) and $2.50 finding and development costs per mcf or $6.00 per mcf .

If a mineral owner leases at $25,000 per acre and a 25 % royalty, the Oil and Gas company would make about $293,749.50 over the productive life of the HS and the mineral owner would make $25,000 "bonus money" and $97,916 (over 40 years or so) or a total of $122,916 for each mineral acre.

As stated earlier, these figures are very conservative inasmuch as they are based on an overall average $8.50 mcf basis. Most "experts" predict gas prices considerably greater than this ---probably closer to $12 to $15 or more in 5-10 years. If there's a wholesale shift to CNG as the national transportation fuel of choice , that demand factor will likely push gas prices to $20 or so.

To maintain HS development, we all need to support the effort to make CNG the American produced "way to go" and send OPEC the one fingered salute.
Permalink Reply by Bobi Carr ("parker") on July 24, 2009 at 17:27
Just wondering what REVISED estimates would be?
Permalink Reply by BirdDawg, plain ole' idiot on July 24, 2009 at 17:30
Alamo,
I would love to believe you. But where in the world are you getting these gas prices? I mean, are they current predictions? I haven't been able to find them.

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