They posted new land jobs in coraopolis. Why do that if intending to nojv? If being absorbed by mcbu, it looks as though they would still want physical representation in pa while reporting up to mcbu.
3 replies (most recent on top)
The NOJV deals are in Billions. One operator has a billion dollar NOJV. Make no mistake that this amount of money means Chevron is outsourcing what it can not do in the Marcellus and Utica formations. I would say the one department that would keep busy up there is land.
BTW Reliance tried and tried to get out of the 5 1/2 year agreement. They lost there ass in all Shale JV's but this one was the most brutal. 1.7 Billion for what? 50 wells??
Yes they have to have a presence just not 550. That being said it still will take months to fully divest to an NOJV. Land leases, legacy production, permits, contractual obligations. But ah, you don't need 20 drilling engineers. What is troubling is the holes in acreage that are happening because Chevron can not produce per obligation. You can't drill a mile lateral with holes everywhere. Shell abandoned direct work in the Marcellus, and Exxon bought XTO and has left it alone as they know they don't have the understanding to work the Marcellus play. You know Chevron's Texas holdings pay no royalties? These are legacy leases Chevron had before the shale gas boom. The leasing game in PA is much much harder. In Permian Chevron has 2 million acres and have a well plan for 350 wells. AMBU can not drill more than 50-60 a year as they can not get it down as EQT, Range, Southwestern ect. have. EQT drills 350 wells and has a capacity to drill many more but has not because of gas prices. At the end for the NOJV you would only need a few dozen people at most. The ending of the reliance JV deal is the nail in the coffin Put Chevron in for Atlas as this was a asset JV and fully transferred to Chevron in whole....http://www.rigzone.com/news/oil_gas/a/90802/Reliance_Atlas_Energy_Enter_17B_Marcellus_JV Atlas Energy entered into a joint venture transaction with a wholly owned affiliate of Reliance Industries Limited, the largest private sector company in India and a global energy leader, pursuant to which Atlas will transfer an interest in its Marcellus Shale position equal to 120,000 net acres in a transaction valued at $1.7 billion. Reliance will pay approximately $340 million in cash upon closing and an additional $1.36 billion in the form of a drilling carry. Atlas will serve as the development operator for the joint venture. Reliance will have the option to operate in certain project areas in the coming years outside of Atlas’ core operating areas of Fayette, Greene, Washington, and Westmoreland Counties in southwestern Pennsylvania. Pursuant to the agreement, Reliance will acquire a 40% undivided interest in approximately 300,000 net acres (120,000 net to Reliance) of undeveloped leasehold held by Atlas, and Atlas will retain a 60% undivided interest in the acreage. In addition to funding its own 40% of drilling obligations, Reliance has agreed to fund 75% of Atlas’ respective portion of drilling and completion costs until the $1.36 billion drilling carry is fully utilized. Atlas has 5-1/2 years to utilize the drilling carry, subject to a two-year extension under certain conditions. Atlas and Reliance have agreed upon a five-year development plan that calls for the drilling of 45 horizontal Marcellus Shale wells for the joint venture during the remainder of 2010, increasing to 108 wells in 2011, 178 wells in 2012, and 300 wells in 2013 and 2014. Atlas will act as the sole leasing agent for the joint venture in the area of mutual interest ("AMI"). In the near future, Atlas and Reliance expect to considerably grow the joint venture’s Marcellus Shale leasehold position within the AMI. Reliance will have the option to acquire a 40% share of such new acreage under terms comparable to those agreed to by Atlas, with each party paying its proportionate share of acquisition costs. In addition, if Atlas decides to sell all or part of the 280,000 additional Appalachian acres currently controlled by it, but excluded from the joint venture and not included in the AMI, Atlas has granted Reliance a right to purchase such acreage at a price of $8,000 per acre. Reliance also receives a right of first offer with respect to potential future sales of this acreage by Atlas at lower prices. This acreage is located predominantly in Mercer, Crawford, and other Pennsylvania counties not currently included in Atlas’ core Marcellus area of southwestern Pennsylvania. The purchase and sale is subject to certain closing conditions, including the consent of participating lenders under Atlas’ senior secured credit facility. The transaction is expected to close in April 2010.