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Permalink Reply by Skip Peel - Mineral Consultant on June 4, 2016 at 4:37

IMO, not even the slight remote possibility of $5 in 2017. Nor in 2018.  Or 2019.  The good news is that many operators will make more than acceptable rates of return in the range of $2.80 to $3.30.  And for that reason supply will not drop sufficiently or demand increase fast enough to move prices out of that range for the next 5 to 10 years.  The U.S. reserves of recoverable natural gas are huge and demand will increase steadily but in modest increments over the next several decades.

CHK will survive as they have done over the last three years - asset divestment.  Here are two in the last thirty days.

FourPoint Energy to Acquire Western Anadarko Assets from Chesapeake Exploration L.L.C. and CHK Cleveland Tonkawa, L.L.C.

Jul 01, 2015, 11:09 ET from FourPoint Energy, LLC

DENVER, July 1, 2015 /PRNewswire/ -- FourPoint Energy, LLC announced today the signing of definitive agreements to acquire oil and gas assets from Chesapeake Exploration L.L.C. ("CEX") and CHK Cleveland Tonkawa L.L.C., whose preferred interest owners are funds managed by GSO Capital Partners LP, as well as other third party investors (collectively the "Preferred Holders"), and common interest owner CEX in three related transactions for a combined purchase price of $840 million, with incremental and contingent payments payable to the Preferred Holders upon certain commodity price and performance conditions.  In addition, the Preferred Holders will receive a distribution of cash on hand and working capital of CHK Cleveland Tonkawa L.L.C.  The assets to be acquired include an interest in approximately 1,500 producing wells primarily in the Cleveland, Tonkawa and Marmaton formations with average daily net production of approximately 21,500 Boed over the twelve months ended April 2015.  The production mix is 7,000 Bbld of oil, 5,000 Bbld of natural gas liquids and 57 Mmcfd of natural gas.  The assets cover nearly 250,000 net acres centered in Roger Mills and Ellis counties, Oklahoma.  Approximately ninety-five percent of the leasehold is held by production.  FourPoint will assume full operations of the assets at closing which is anticipated to be August 31, 2015. 

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Newfield Exploration to buy STACK acreage from Chesapeake for $470M

May 5 2016, 08:31 ET | About: Newfield Exploration Co. (NFX) | By: Carl Surran, SA News Editor

Newfield Exploration (NYSE:NFX) agrees to acquire ~42K net acres in the Anadarko Basin STACK play from Chesapeake Energy (NYSE:CHK) for $470M.

NFX says the deal expands its STACK footprint to 265K net acres, and more than 90% of the newly acquired acreage is held-by-production, requiring only modest capital investments over the next several years.

NFX says current net production from the assets is ~3,800 boe/day (55% liquids) and is expected to more than double by year-end 2016 as recently drilled wells are completed and turned to sales.

 

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Permalink Reply by jscottrx on June 4, 2016 at 5:25

i assume they are drillin' something always, somewhere. when price does move up to whatever the "sweet spot" is and act like it wants to hang around, hope they do a multi well pad and alt's on my dad's dad's side 4 miles north of Mansfield the old "backway" LA 175. that was a nice init flow when Aubrey came in there smack dab mid financial crisis dec 2008 compl apr 2009 was gonna do a double pipeline but realities set in. only a single.

tyty skip for sharin that.

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Permalink Reply by jscottrx on June 4, 2016 at 5:35

actually need a major timber harvest first. way overdue.

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Permalink Reply by jscottrx on June 4, 2016 at 5:28

but is it not a given that no way BR. they would lose control of their possibly someday quite valable assets. but no way invest the stock due to it being "poisoned" lol.

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Permalink Reply by jscottrx on June 4, 2016 at 5:33

before Haynesville 2004'ish dad got a cotton valley drilled. wonder if horiz path could tap more. this is on dad's mom's side holly LA 175 at IH-49 se corner.

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Permalink Reply by Skip Peel - Mineral Consultant on June 4, 2016 at 5:43

The rig report that I subscribe to (Greater Gulf Coast) shows that CHK is running more rigs currently than all but one other operating company.  5 in the Eagle Ford and 3 in the Haynesville.  CHK still has a lot of HA units that have only the original unit well.  So they have plenty of future well locations remaining.  Personally I'd prefer to keep my gas in the ground at $2.  The Holly Field (Hwy 175 north of Mansfield) is not in, but not far from, Indigo's CV wet gas play.  So maybe, on future CV production for your area.

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Permalink Reply by jscottrx on June 4, 2016 at 5:49

true, as warren buffet's sidekick stockpicker, munger said "heck deplete others first. save ours for that inevitable rainy day...". lol.

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Permalink Reply by jscottrx on June 4, 2016 at 5:40

and one more question: just what controls DO the shareholders have over divestitures, equity-for-debt whatevers, etc. time for me to donate $100. ty ty all interested.

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Permalink Reply by Skip Peel - Mineral Consultant on June 4, 2016 at 5:48

Depends on number of shares owned.  Only those with large stakes get a say.  The CHK board decided long ago (when Aubrey was let go) that reducing capital expenditures and selling assets was the policy to follow in order to ride out the depressed commodity price cycle.  CHK still has a lot of rock they can sell because Aubrey could never stop buying more mineral rights (and borrowing more money) even when the downturn was evident to all in the industry.

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Permalink Reply by jscottrx on June 4, 2016 at 5:58

Icahn has 10 % and another has 10%. if i was a very very log-term investor and felt that all that acreage in 50 years WILL be worth way more heck buy the whole outfit. shareholders could control that? if so i if a shareholder would blow the shares out to buyer and consider myself lucky. and also closure to a rocky wild ride it was. tyty skip. i think china sniffin' around lol. my point here was yes i would like to see 3 alts around that orig when the price and time are right. 5-10 years no problema.

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Permalink Reply by P.G. on June 4, 2016 at 6:48

How much was NG before Fracking?
How much would it go to if say our next president banned or severely regulated Fracking?

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Permalink Reply by Skip Peel - Mineral Consultant on June 4, 2016 at 6:57

I suspect you mean the type of "fracking" that is used in association with horizontal well bores because many vertical wells in conventional reservoirs were fracked going back fifty years or more.  A president can't effectively ban fracking. And you're fooling yourself if you think any would do so. Even Bernie. There are some additional regulations that not only make sense but will quash the anti-fracking voices.  I think the oil & gas industry should volunteer to adopt those regulations in return for a commitment from the federal government to disallow any state prohibitions on fracking that meets federal standards.

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