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Thursday, February 13, 2014

What’s Up With Penn Virginia?

What’s Up With Penn Virginia?

Penn Virginia has been a well-known name in our region since the early days of Marcellus leasing. So many companies were “hot” for acreage in this area … to the extent they over-bought before realizing the thickness and make-up of our Marcellus shale didn’t compare with other counties. Also overlooked was how much storage was available, where the pipelines to market were, were support industries and experienced workers available, etc.. Many companies abandoned leases or dropped them from their books w/o telling owners, entered into joint ventures (JV’s) w/other companies, altered their mission from Exploration/Production to Midstream ventures (pipelines) … anything to stay afloat. Some just went belly up, never to be heard from again.

Penn Virginia did not have to do the latter. It did stay involved. However that pot of gold it hoped to find in our Marcellus just didn’t exist at the level necessary to be profitable. As 4-County members were always told our Marcellus shale isn’t and never was the “Cadillac of Shales”. The firm’s decision to focus on Midstream action, i.e. getting product (any company’s O&G) to market was a better Plan B.

This year Penn Virginia has upped the ante on its expectations for big returns, but not in our region. Although we now know that our Utica layer below the Marcellus will be the area’s Cash Cow, market prices are up considerably, and needed infrastructure has expanded, Penn Virginia has “Gone to Texas” as so many O&G companies did back in the day. Through professional online sources the company has made known that 97% of its money will now be invested in the Eagle Ford field. The remaining 3% is a question mark.

The firm had high hopes here. Every company who leased Marcellus land was primed to make big bucks, as were the landowners. Utica wasn’t heard of. Its riches unknown. And the public was still in “learning mode” about the whole business. Hopefully the public will always be in “learning mode”!

Penn Virginia has had its Marcellus holdings on the market at Houston’s NAPE global O&G trade show for at least two years. Many leases with this firm have or soon will expire. Like all companies (whatever the business) it needed to make money faster than this region has allowed it to happen. 

Whatever Exploration and Production company readers may have leases with, check the fine print. When does the lease expire? If it’s in production a royalty check already seals the deal for a long time. If there has been no activity, like Penn Virginia consider your own Plan B.

Landmen are back. The firms they represent know something you don’t. Company investments aren’t made, even small ones like a few hundred $$ an acre, unless a much bigger return is expected in a timely manner. Penn Virginia and other early companies simply made their investments in our area too quickly to get the return needed. Who knew 2008 would turn into the country’s financial pit for 5 years? Thank goodness we’re climbing out. Penn Virginia is doing the same … in Texas.

What will your plans be?

Janice L. Hancharick

11 comments :

Anonymous said...

Janice,
My plans will be to wait patiently and see how my area develops. I will read investors presentations, quarterly and annual reports, press releases, and news media to see who the serious E&P players will be in my area. I will network with my neighbors to keep abreast of any local happenings. I will identify a respected attorney well versed in oil & gas leasing.
When the time is right I will consult my attorney to get a lease tailored for me. I will consult with Northwest Savings Bank (my bank)who have a bonus/royalty management division who can help me minimize taxes and protect my new found wealth for myself and my future heirs. They will also audit the company production records to minimize them ripping me off by selling my resource below market price and volume.
Note - I will not be paying a % fee to you and your 4 county marketing firm to market my minerals for me. I have not been impressed with your success so far.

Anonymous said...

The issue is and will remain, are you in a financial relationship with CX-Energy, where you will (future tense) get paid from CX Energy if and when a deal for OGM's is completed?

I am not against anyone making money, what I am against is Non-Disclosure of a financial relationship when I am dealing with someone. The answer is either Yes or No.

Further, I would raise the question that as CX-Energy is now a Pa Licensed Real Estate Brokerage specializing in oil and gas sales and leasing, and you are not a Pa Licensee but are representing them or are getting paid by them, you are treading in very dangerous areas with the Pa Real Estate Commission for practicing without a license.

Anonymous said...

Allow me to dissect with my opinion.

“to the extent they over-bought before realizing the thickness and make-up of our Marcellus shale didn’t compare with other counties. Also overlooked was how much storage was available, where the pipelines to market were, were support industries and experienced workers available”

They didn’t realize? Companies spending hundreds of thousands of dollars on research, geologists, engineers did not realize what they were doing? Please, your kidding us right?

“will now be invested in the Eagle Ford field. The remaining 3% is a question mark.”
Is the 3% an inference to our area? You want us to hang our hats on this 3% figure, not very tempting I must say.

“that pot of gold it hoped to find in our Marcellus just didn’t exist at the level necessary to be profitable”
“Although we now know that our Utica layer below the Marcellus will be the area’s Cash Cow”

You’re telling us, they knew nothing about the Utica level when they leased? That their leases did not include Utica? That your proposed lease was Marcellus focused then changed it to include Utica to make it more appealing, still with no takers?

“needed infrastructure has expanded”
Where? One 10 mile project? Please cite the source that the needed infrastructure is even adequate to drill here.

“Utica wasn’t heard of. Its riches unknown”
Again, did Utica just materialize out of thin air or did all of the highly paid professionals from some of the biggest companies in the O&G industry miss it?

“Hopefully the public will always be in “learning mode”
Why would you wish this?


“Penn Virginia has had its Marcellus holdings on the market at Houston’s NAPE global O&G trade show for at least two years”
2 years and no sale? I take this to mean the timing is a long way off.

“If there has been no activity, like Penn Virginia consider your own Plan B”
You wouldn’t be trying to get people to sign with your company…would you?

“Landmen are back”
Cite the source please. How many, when where, offers?

“The firms they represent know something you don’t”
Translated – I guess this country bumpkin needs help………now who can I call?

Maybe it’s just me, but I am truly put off by these veiled never ending attempts at “education” by the Leaselady, without ever disclosing if there is any financial relationship with CX energy. In my opinion, this puts CX in a very unprofessional light for allowing this to continue.
Making money? Great.
Making a lot of money? Good for you. Hopefully, the more you make, the more I will make.
Making a boat load of money for hard work? Nothing better, it’s the American way.
Not disclosing a financial relationship, like all professionals (accountants, lawayers, Brokers)…. not too good in my opinion.

Anonymous said...

5:34
Obviously she will get a cut, but does it really matter that she disclose what she gets? She probably will get some crumbs, but the fat cats at the top will be getting the most. What matters to me is how much is the CX "fee" now and is it worth it? They may be working hard "marketing" but have they been able to close any deals? They certainly haven't been able to close one up here to my knowledge and I think they may have had one fall through south of the 4 county area, read about it in gomarcellus.com.

Maybe Janice can tell us what their current fee is and why should we sign with them.

Anonymous said...

This is nothing new. Anyone that has kept track of their lease's and the company already knows all of this. You all should know that anyone with a lease for O&G if you contract has run out or is going to run out, contact your company for a RELEASE OF LEASE and have it recorded in you county court house. This is a must.If that doesn't work send a Reg. Letter, and then if you get no reponse you will have to contact a Lawyer for further help. I can tell you that we had 3 lease's come to and end. It has aken us 1 1/2 years to get these release's. I did all the work myself and continued to call and call till them gave in and finally sent them all. Good luck

Anonymous said...

Didn't see where she said anything about CX... Guess this is the same person who criticizes her every post. We get your point and it's getting old.

Anonymous said...

No, 9:21, it is not getting old.
I have watched these communications for a long time now and these so-called information essays that are actually real estate sales pitches. Somebody has finally gotten on here and given these advertisements some scrutiny and revealed what's behind the curtain. Thank you to the people who wrote the several comments above for exposing this for what it is.

Anonymous said...

With you 10:25. She doesn't have to mention CX. Anyone who has wasted there time on the meetings they have had, knows she is working for them for a cut of your money when and if anything comes to fruition. The meetings are what get old real fast. Same old blah blah blah

Anonymous said...

Here's what I know: many people who signed with Penn Virginia were paid a $2600 per acre signing bonus, and in all likelihood, their leases will expire, and they will be free to lease again. In that same period, those who signed with the 4 county group have not been leased or paid. Which would you choose?

Also, it is location, location, location. Gas companies do not come out of nowhere because a land group has formed.

Anonymous said...

very interesting read post 6:28 ! Janice has just been trumped!

Anonymous said...

"Maybe Janice can tell us what their current fee is"

The dollar amount sh will make is Not the issue.

The issue is an ethical one. There is no disclosure of who she represents.

CX should step in and address this before someone files a complaint with the Real Estate Commission, as they are now a Real Estate Brokerage.