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Oil & Gas Output Showing Increase

Chesapeake reports boost in production of more than 40 percent

August 5, 2013

MOUNDSVILLE — The Marcellus and Utica shale formations have become known for their untapped reserves of natural gas....

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(26)

atoddh

Aug-05-13 1:32 AM

Based on performance thus far 700 acres of gas in Ohio County would be worth upwards of 100 million over 20 years(about 5,000,000 year in lease and royalty income.)

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Marcellus

Aug-05-13 5:29 AM

Chesapeake's "fire sale" of their assets has helped their bottom line. And don't forget the state-owned Norwegian company STATOIL has about a 40-percent share in their Marcellus assets. As far as projecting these wells out 20-years it would be safer to use 7-years since their production drops-off so fast.

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TrollSlayer

Aug-05-13 7:50 AM

Chesapeake's stock value is UP 25% in the last MONTH. Apparently they're doing something right. You should have bought some, Marcellus.

And Chesapeake is a multi-BILLION-dollar company employing HUNDREDS of professional geologists who say there’s DECADES in production of gas down there. But amateur blogger Marcellus says there’s only 7 years left. Who do you believe? LOL

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WVUGEO

Aug-05-13 11:29 AM

"Marcellus" has it pretty close to right. In a big field like the Marcellus, they'll be able to maintain production for awhile, but only at the expense of an ever-increasing rate of drilling - at an increased per-unit cost of gas produced. That had been the experience in the Barnett Shale down in Texas. Academics in the pockets of the gas companies - a few of which academics have been "found out", by the way, and been forced to move on - try to paint a rosier picture; but, per-well production decline rates are so steep that the price of gas has to go up. Chesapeake's balance sheet doesn't look bad, by the way, because they were forced into a massive sell-off of assets just to stay in business and maintain their rate of drilling, again as Marcellus indicates below.

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WVUGEO

Aug-05-13 11:35 AM

And, it isn't going to get better for the shale drillers. Technologies have begun to proliferate around the world which use solar energy to convert CO2 and H2O into substitute natural gas Methane, and Oxygen. Pilot plants are up and running in Germany and Japan, while other plants in Bahrain, England and Iceland are converting CO2 into liquid fuels. Saudi Arabia, via Saudi companies and universities, has developed multiple technologies that convert CO2 into hydrocarbons.

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TrollSlayer

Aug-05-13 12:56 PM

WVUGEO, that sounds really BAD for Chesapeake. I'm sure you're short selling all the CHK you can right now, considering they're certain to go under soon.

I'm buying. So when you're selling I'LL be the new owner of your shares. Check the value in a year and let's see who's crying then. LOL

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TrollSlayer

Aug-05-13 1:19 PM

By the way, today CHK is the highest it's been all year. So if it's going down today is the perfect day to short sell. You can thank me later.

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Wheeldog

Aug-05-13 1:21 PM

"But amateur blogger Marcellus says there’s only 7 years left. Who do you believe? LOL," Troll.

Actually, I believe Marcellus. A little background research into the average productive lifespan of a tracked shale deposit shows it is far shorter than that of a conventional deposit of oil or gas. In effect, we are now going after the dregs, because we have pretty much used up the largest and easiest to produce reserves. The energy return on investment (eroi) is much lower for shale deposits than it is for conventional deposits.

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TrollSlayer

Aug-05-13 1:32 PM

So now there's two amateur blogger geologists who advise Chesapeake to ignore their hundreds of paid professional geologists and cut their losses. Wheeldog, gas deniers, if you're selling CHK, I'm buying. Money, meet mouth. LOL

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WVUGEO

Aug-05-13 5:29 PM

Wheeldog has it right. And, if you examine the WV State Treasurer's reports, oil and gas severance taxes paid to WV in 2012 appear to have been about 20% less than those in 2009. We think we read that right, but won't assert it categorically. However, some months ago we presented the treasurer's numbers to some knowledgeable "others", suggesting that it meant gas production was already trending down; and, we weren't challenged. The best might already be behind you.

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TrollSlayer

Aug-05-13 5:41 PM

Sure GEO. Gas is already dead. That's why the drilling, pipelining, and refinery folks are all leaving town. Sell, sell, sell now, and make a mint.

Then when you get rich on short sale of gas company stocks you can put those millions into that CO2-to-methane production facility you've always wanted.

When you're a fabulously wealthy snake oil tycoon you can thank me. LOL

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WVUGEO

Aug-05-13 5:46 PM

Relative to our post below, the higher output in the early months of 2013 is compared to the depressed output in 2012; and, although we're not going to check it - - we'll leave that to one of you Marcellus true believers out there - - that could be just an insignificant statistical up-tick; and, like 2012 in total, might not compare well with the same months in 2009, which appears to have been a high-water mark against which subsequent production numbers should be measured to see what the trend really is.

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mkhunt

Aug-05-13 5:46 PM

Just drove 250 in Marshall Co. ouch! Who is going to pay for the damage..almost was scraped by a very big rig and a waste container was being hauled at a dangerously high rate of speed also...almost*****wv.

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WVUGEO

Aug-05-13 5:59 PM

Relative to mkhunt's post, and again if we read the WV State Treasurer's numbers right, you're not collecting nearly enough in gas severance taxes to pay for what we've heard estimates of the road damage caused by the excessive heavy drilling rig and truck traffic to be. Income taxes from the drillers and pipeline layers won't cover it, either, since most of them seem to be transients from out of state.

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TrollSlayer

Aug-05-13 7:08 PM

Relative to mkhunt's post “Who is going to pay for the damage..almost was scraped by a very big rig and a waste container was being hauled at a dangerously high rate of speed also...almost”

Since they “almost” scraped you, would you be satisfied if that hauler “almost” paid you for the “almost” damages?

Probably not. Almost. LOL

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TrollSlayer

Aug-05-13 7:19 PM

Relative to the decline in WV gas severance taxes, the combination of a nationwide gas surplus, unusually low gas prices, and the depressed Obama economy su cking the life out of American demand for ALL resources, probably have absolutely nothing to do with it. It HAS to be that we’re simply running out of gas down there. Chesapeake’s team of hundreds of expert professional geologists are clearly wrong. Gas is over. Pack it up, drillers.

Next big booms according to WVUGEO: snake oil from CO2. And aluminum from fly ash. Because God knows they’re having enough trouble getting gas from gas shale and making aluminum from aluminum ore and cheap coal-fired electricity now. Derrrrr....

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atoddh

Aug-06-13 1:43 AM

Marcellus: The wells are refracked every 6/7 years to sustain production for at least 20 years; more like 30.In Ohio County there are also seams below to be mined in the future.

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WVUGEO

Aug-06-13 11:17 AM

Concerning atoddh's post below, production in re-fracked wells in Ohio and in the Texas Barnett shale play drops off even faster than in new shale wells. Wells have been re-fracked two or three times; and, the costs of production of the gas thus obtained far exceeds the current prices producers are able to get for that gas. Chesapeake has sold in 2012/is selling in 2013 roughly 15 Billion dollars in assets. That's the only way they're maintaining a positive cash flow balance sheet. Reports have it that they will be selling even more assets to pay down debt. Shale gas is neither truly abundant nor inexpensive. We are witnessing, as some astute and objective observers outside the epicenter of the mania have noted, the creation of a financial/market bubble. If we allow any significant power generation capacity to be shifted from Coal to gas, you better learn how to read in the dark and play cards by candlelight rather than watch TV. Oh, and buy plenty of blankets.

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Wheeldog

Aug-06-13 12:22 PM

WV, you have obviously done your homework. Fracking has significantly added to the the natural gas reserves and somewhat marginally to the reserves of unconventional oil, but it is not a panacea for our overall energy requirements. As you describe, new wells tend to deplete very fast, and the cost of renewed tracking substantially reduces the energy return on investment. This is a classical case of the "Red Queen" who must run faster just to remain in place. There is more hype than net energy coming out of those wells.

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WVUGEO

Aug-06-13 2:02 PM

Wheeldog: You brought up the topic of "energy return on investment"; usually shorthanded as "EROI" and more formally known as "energy returned on energy invested", "EROEI". You'll see it both ways. And, based on the tremendous amount of energy that has to be expended drilling wells so deep, and then fracking, and refracking them, coupled with the steep, some petro industry analysts have called them precipitous, per-well production decline rates, and coupled with the costs of localized "industrialization" needed for shale drilling, it has been demonstrated by some researchers that the "EROEI" for at least some shale gas wells/fields is negative. We are expending more energy to get the gas than we will get in return by using/burning the gas for some purpose. We are, in other words, simply throwing money down some pretty deep rat holes.

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Marcellus

Aug-06-13 3:39 PM

TROLLSLAYER should take a breather and get off this message board long enough to do some serious research on the FAST production declines of shale wells. Start with Deborah Rogers research on Barnett shale wells here: ******* youtu.be/ JYaC7L2svoQ If the link doesn't work, Google her name on YouTube. Next, check some actual numbers of shale well drop-offs on nearly 200 wells not far from Wheeling: ******* ****marcellus-shale.us/ Marcellus-production.htm We'll have a quiz later TROLL, so study up skipper! Also, the folks in Texas will tell you that refracs or 'lifts' have temporary benefit. What will hurt this nation the most is counting on future gas reserves that just won't be there.

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WVUGEO

Aug-06-13 5:24 PM

Marcellus: Another genuine expert the shale gas dittoheads should consult is the former, long-term head of the Geologic Survey of Canada, David Hughes. Using US Government records, he analyzed US production data on thousands of shale gas wells, and concluded, that: "The very high decline rates of shale gas wells require continuous inputs of capital - estimated at $42 billion per year to drill more than 7,000 wells - in order to maintain production. In comparison, the value of shale gas produced in 2012 was just $32.5 billion.” In other words, it costs us more per year to maintain a certain level of shale gas production than the shale gas that is produced is worth.

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TrollSlayer

Aug-07-13 12:22 AM

Wonder why all the armchair geologists who AREN’T making any money from shale gas keep trying to convince all the REAL geologists who ARE making TONS of money from shale gas that there’s no money in shale gas?

Much like the spectators who yelled at the Wright Brothers that their ridiculous contraption would never fly, every time they flew overhead...

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Marcellus

Aug-07-13 9:09 AM

Re: DROLLSLAYER's comment "Much like the spectators who yelled at the Wright Brothers that their ridiculous contraption would never fly" OR the experts who said the TITANIC was unsinkable. LOL The great SLAYER always wants facts, that is, until he gets them! He'll huff and he'll puff and he'll cyber bully you down! ****

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TrollSlayer

Aug-07-13 10:01 AM

Unlike the Titanic, the Wright Flyer was actually airborne when those spectators...

Oh, nevermind. Just keep telling us we're not actually making all that money we're depositing in our bank accounts. Since you're not, it must not be real. No, no gas down there... LOL

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