Vitrinite

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Thu Mar 20th 21:56 PM | Rating: 0 0
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Investing in the Marcellus Shale

My idea is short the weaker ones (xco, ATN)that are up on general Marcellus hype. And stay long the ones with quality leashold positions (RRC, COG, CNX ) in the fairway of the play.

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Mon Mar 17th 18:53 PM | Rating: 0 0
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Investing in the Marcellus Shale

Without question the Marcellus Shale play is the most exciting topic in the US natural gas world today. However, in this “do-it-myself” research age, errors can be made.
# 1. I suggest researching what % of Range assets exist in Appalachia and what % Marcellus may represent of their output in 2-3 yrs.
2. Next expertise varies widely, fracing skill/experience can make the difference between a great well and a dud.

3. Linn. Linn doesn’t do exploratory drilling, does the author know that? They buy shallow sands developmental property and take the gas out. Do there even have a well drilled to the Marcellus formation? I don’t think so. Do they own deep rights below their shallow production? Or does someone else own that? Shallow well drilling is akin to glorified water well drilling.
E&P shale takes huge capital and it has to be risked. LPs paying out cash flow can’t compete. I know no one who calls Linn a Marcellus play.

4. Next, shale varies across the geographic spectrum. Lycoming County PA acreage may have 2Xs the output potential of SW PA.

Some NY hedge fund thinks, New Fuel Gas acreage in NW PA has value. Well, ask a company who has drilled it., the shale is immature there.
It has zero in common with Range acreage. All of CHK’s acreage isn’t IN prime Marcellus fairway.

Exco ? If they are paying 750$ to lease south of the Allegheny Front, are they planning blue stone operations? Because there isn’t any gas there.
I don’t mean to be so adamant but this isn’t homogenous at all.

Mr Vitrinite

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