The price of natural gas is $2.97/MMBtu, and the price seems to be going up. Gas storage levels are just under the five year average, pretty much like they have been for the month. Drilling rigs are up to 453, up 21 from last month.
A “groundbreaking” study looked at whether oil and gas wells had the potential for integrity issues (leaking). Using raw data, they determined that 14.1% of oil and gas wells drilled before 2018 had the potential for integrity issues. Testing around wells showed that 3% of wells in Colorado and 0.1% of wells in New Mexico exhibited characteristics that made them susceptible to leakage outside the well. No testing was done to see whether there was actual leakage. They should really follow up with an actual field test for actual leakage instead of just making allegations.
According to the EIA, last winter was warmer than average, until the cold snap in late January and early February, which made up for the rest of the winter. In fact, withdrawals from storage for last winter ended up being 10.6% more than average.
Some landowners who signed easements with the Atlantic Coast Pipeline are now requesting that the FERC force ACP to release those easements. Since the land is no longer needed for the pipeline, that’s a sensible thing to request. I’m going to brag here: our clients don’t have to worry about this issue because we got language in their easements allowing them to request a release once a specific amount of time has passed after cancellation. Of course, if the FERC agrees with the landowners and a release can be acquired sooner, we’ll do that.
Producers are exercising restraint in drilling. I think it’s mostly because they’re having a harder time getting money from banks.
Libya is having budget troubles which may keep them from producing as much oil as they have been.
West Virginia’s Treasurer spoke out against the Biden administration’s push to get banks and lenders to not give money to the oil and gas industry. Honestly, that may not be an awful thing. Banks have historically overlent to the oil and gas industry, leading to boom/bust cycles. A little less money flowing in to the industry should create stability. No money would, of course, be a bad thing.
LNG terminals are running at full capacity.
Oil production from Alaska has been declining since the late 80s. I was generally aware of this, but I wasn’t aware of how much it has declined from its peak. This last decade it’s been pretty flat, which is why it hasn’t made news.
Moody’s predicts a pretty stable oil and gas industry for the next 12-18 months. Predicting stability in oil and gas seems like a reputation destroyer. Moody’s does have a pretty good reputation, though. Guess we’ll see.
Europe won’t get to net-zero carbon without natural gas. Until battery tech advances far enough, renewables aren’t going to replace fossil fuels.
We’re importing less energy, but exporting about as much as we used to.
The semi-truck of the future is self-driving and powered by natural gas. Of course, we all know how “the X of the future” works out most of the time.
Permitting proceeds ahead on a methanol plant in Pleasants County, WV.
The Colonial Pipeline got shut down because it was hacked. UPDATE: It’s back up and running, and the fuel shortage will be alleviated soon.
EQT is just getting bigger. They’ve now bought a bunch of property in Northeast PA.
A liquefaction plant in Jacksonville, FL is going to triple it’s capacity.
My husband, his uncle, and his brother just received a letter from Antero Resources Corporation. They have made them an offer $150.00 flat fee with 14% interest for 10.00000 gross acres, net acres 0.00051. If they buy out the interest the offer is $300.00 flat fee. We knew nothing about this land. It is in Tucker County, Ellsworth district. The nearest I can figure this has come down through my husbands great uncles wife. I have advised all of them to not sign anything yet, as I don’t like some of the clauses in the lease agreement. They want an answer by June 24, 2021. I just would like to know if this is even a good offer. We do not know how other many heirs are involved. I just don’t want any of them to end up being sued or having to pay anything back if this is this does not pan out.
June 24 is probably just an arbitrary number, unless they’ve sent you a Best and Final Offer Letter. You have time. $150 flat fee isn’t bad considering how little your mineral interest is. 14% royalty is low, regardless of how small your mineral interest is, but even if you get it bumped up to 100% you’re not going to be getting much. I wouldn’t worry about royalty. Do ask them for gross proceeds, though, because it makes the check stub easier to read (they report all kinds of numbers to you when they send the check, and it’s confusing). Get a No Warranty of Title clause, a Hold Harmless clause, and a Marcellus Shale Formation Limit clause. You might consider selling to them. Negotiate the flat fee for the lease, then ask them if they’ll give you double that to sell. I don’t usually recommend selling, but when you have a tiny amount of minerals (you do) then it makes some sense to sell. Call the office if you’d like to set up an initial consult with me and discuss it all in more detail. 304-473-1403.
Recently, my 92 year old mothet-in-law received an offer from Antero to replace an expired lease agreement. The signing bonus and royalty offer were less than what was in the previous lease. I emailed a counter offer to the landman. My counter offer asked for $5000/net acre and 20% gross royalty at the well head. I also asked for several liability clauses to be include in the lease agreement. The landman said he sent my email to Antero for review and comment. That was 4 weeks ago. I feel bad for the other heirs who agreed to join me in making the counter offer. Should I contact the landman again?
That was a very reasonable counter offer. Those are the kinds of numbers we often use (depending on the county and company) when we make counteroffers. I’m genuinely surprised it’s taken them four weeks to get back to you. Reaching out at this point to find out what happened is reasonable. You’ll most likely find that your paperwork has just fallen through the cracks or that the landman was told to focus on another project for the moment. Good luck, and keep us updated!