June 24, 2009
There seems to be a lot of confusion about the proposal Hess/Seneca has made to the Kirkwood Coalition. It is exactly the same as the proposal Binghamton/Conklin received. (Please review the payment structure included in the June 20, 2009 update below.) The attorneys for Binghamton/Conklin and Kirkwood started working on the lease today and made little progress because Hess/Seneca was not prepared. We will be meeting again on Thursday, July 2nd. All parties are committed to coming to an agreement. We are trying to move at a prudent pace and not rush into something that will not be accepted by the coalitions. Please try to limit your emails and phone calls requesting updates as I will keep you posted on this site with any new developments. Thank you for your patience. Marchie
June 20, 2009
Now that the proposal from Hess/Seneca has been publicized in the local media, I would like to clarify the actual payment structure.
The term of the agreement would be 8 years with 2 phases; an exploratory phase and a developmental phase. The payment structure would be:
July 2009 - $350 (per acre - guaranteed)
January 2010 - $350 – This and subsequent payments would not be made until the moratorium on drilling in New York State is lifted. When the
moratorium is lifted, this payment and the next 2 payments
are then guaranteed.
January 2011 - $400
January 2012 - $400 - This would complete the exploratory phase where seismic
testing would be done with a minimum of 2 exploratory wells.
If the exploratory phase proves to have satisfactory results, the developmental phase would begin with the following payment structure:
January 2013 - $500
January 2014 - $500
January 2015 - $500
January 2016 - $250 - If you are not receiving royalties from a producing unit.
January 2017 - $250 - If you are not receiving royalties from a producing unit.
Total $3,500
When attorney Denton and his team come to an agreement on the lease with the gas company, (and there is a lot of work to be done) and the Steering Committee accepts the terms, then a meeting will be called for the full coalition to vote on the total package.
Marchie
June 12, 2009 Update
We have been in continuous negotiations with a large gas company and their partner for about 4 weeks. This company is intereseted in leasing about 90,000 acres in New York and considerable amount of acreage in PA. The steering committee has accepted the financial proposal. Our next step will be working out the details of the lease. There is a lot to accomplish and we will not compromise on some issues. If we can come to an agreement on the lease a meeting of the full coalition will be called to vote on the package. This could happen very soon so please keep checking this website for more updates. Thank you for your patience. Marchie
May 13, 2009 Update
Abstracts: Sorry it is taking so long. This is out of my control. I have made several phone calls and emails to Attorney Denton’s office trying to expedite this process. I want to assure you, your abstracts are safe. I will continue to encourage Attorney Denton to complete this task and return your abstracts ASAP. Thank you for your cooperation and patience in this matter.
Our coalition consultant is still working to make a deal.
Also, last Friday we met with 2 gas companies that are interested in forming a joint venture. One is a major company and one a smaller company. These 2 companies are looking to lease a large number of acres in NY and PA. They have contacted several other coalitions and made the same offer that we all quickly refused. They are prepared to make another offer within a week. When I receive this offer I will call a meeting with our steering committee and discuss it.
Marchie
5-4-09 Update
In regard to abstracts that were submitted, they are being completed this week and should be available to pick up the week of May 11th. I will call you when they are available.
I have been in contact with our consultant several times since last Tuesday's deadline. He is working very hard to make a deal for our coalition. We wish him good luck.
I received an unsolicited contact from a major company. We were supposed to meet last Saturday, but the flight connections were cancelled. Coalition geologist, Don Zeangle, and I will attend a rescheduled meeting for this Friday.
Marchie
4-29-09 Update
Unfortunately the consultant that was marketing the proposal we negotiated with was unable to find a first class gas company to accept our coalition. We worked with the consultant by granting two extensions. During this period of time we really had no other choice but to give him a chance to make this option work. The steering committee rejected 2 written counteroffers during the last 2-week extension. We feel our coalition has too many positive assets to compromise our position at this time.
The consultant worked very hard to place us with the right company. His job was made more difficult everyday. The price of natural gas and the economy were getting worse each day. New York State must share much of the credit for us not making a deal. They are proposing a 5% severance tax on natural gas production and there still is a moratorium on horizontal drilling, that may or may not be lifted late this summer.
The steering committee and Attorney Denton remain committed to moving forward. We will consider all other options, including allowing the consultant to find a first class gas company that will accept our original proposal. There are some very good offers and deals being made in Pennsylvania. Hopefully when horizontal drilling is allowed in New York we will see similar offers.
It is very important that we stay strong and united. Our coalition has much to offer. We have good well sites, pipeline easements to the Millennium transmission line, 2 interstate highways intersect in Kirkwood, we have a good source of water and many contiguous acres.
Respectfully,
Marchie Diffendorf, Chairman
April 14, 2009 Update
Our consultant, in conjunction with our geologist and attorney, has been working very hard to complete the deal for our coalition. The task has been made more difficult by natural gas prices being so low and a forecast for the prices to stay low. Also, the economy seems not to be improving. The consultant has asked for an additional two-week extension to negotiate. Our steering committee met on Monday, April 13th, and decided we would give the consultant the requested extension to allow time to receive a written proposal. The proposal will have some modifications and will be unique with a very aggressive drilling program. We all sincerely hope we will have something to vote on when the extension expires. Again, thank you for your patience.
Marchie
March 13, 2009 Update
The consultant that is negotiating our lease has requested a 30-day extension (to April 14th) to allow the interested gas companies more time to do their research and review abstracts of the larger parcels of property. I did a phone survey of the steering committee and we have decided to grant this extension. The consultant is very exicted about the prospects of coming to an agreement.
The request to review abstracts of parcels of 50 acres or more will represent a sampling of the whole coalition. This does not diminish the importance of all the members. Thank you for your patience. Marchie
March 8, 2009 Update
I received a call this morning from coalition attorney Chris Denton. He has informed me that there are two gas companies that want to deal with the Kirkwood Gas Coalition. Their interest is serious, which is indicated by the fact that they are flying coalition geologist Don Zeangle to meet with them this week. Also, later this week the interested companies plan to review abstracts for parcels of 50 acres or more. (Those property owners will be notified in the very near future.) This is all the information I have and will update this site with more information as soon as possible. This is very encouraging news! Marchie
60- Day Deadline
In regard to the proposal that was accepted by the coalition on Friday, January 9th, I signed documents to proceed with the consultants on Monday, January 19th giving them until March 17th to present the coalition with an agreement from a gas company. Marchie
Voting Results
I am pleased to announce the results from last night's voting on the proposal - 532 for and 23 against. I would like to thank everyone for showing their overwhelming support to go forward with our proposal.
Our lease is a result of Attorney Denton's assembling a very impressive team of experts with over 100 years of combined experience. This lease protects us in all aspects of gas exploration.
The latest copy of our lease will be available at the Kirkwood Town Hall for review by members of the Kirkwood Gas Coalition only. This lease is a part of the exclusive agreement we have with the consultant and cannot be copied or removed from the Town Hall.
I would also like to thank everyone for their donations of $797.70. We now have enough funds to hold one more meeting at the Binghamton Regency.
-Marchie
Coalition Announces Proposal
I am pleased to announce that we have received a proposal and will be holding a meeting Friday evening, January 9th, at the Binghamton Regency to cover our lease in detail and present the proposal. We will be voting to accept or reject the proposal at the Friday meeting. Registration will begin at 6:00 PM and the meeting is scheduled to start at 7:00 PM. Attorney Denton and his team, Geologist Don Zeangle, Environmental Engineer, Bob Williams, Pipeline Specialist, John Lacey and CPA, Jim Leonard will present the terms of the proposal as well as review the lease. This meeting is open to Kirkwood Gas Coalition members ONLY and ID will be required.
After a lengthy discussion the Steering Committee determined that voting will be conducted as follows:
0 to 10 Total Acres 1 vote (white ballot)
10.01 Acres to 50 Total Acres 2 votes (yellow ballot)
50.01 Acres to 100 Total Acres 3 votes (green ballot)
100.01 or more Total Acres 4 votes (pink ballot)
One person will cast the vote for their total acreage whether the property is jointly or individually owned.
Looking forward to seeing you Friday evening.
Marchie Diffendorf
Chairman
GEOLOGY REPORT & MARCELLUS SHALE SAMPLE
If you would like to review the geology report that was sent to 70 gas companies and see a sample of the Marcellus Shale, they are available at the Town Clerk’s Office for members only.
STEERING COMMITTEE MEETS WITH COALITION ATTORNEY - CHRIS DENTON, NOVEMBER 17, 2008.
Our steering committee met with Attorney Denton November 17th to discuss going to bid. We are all aware of the economic turmoil on Wall Street and Main Street. Most of the gas companies are experiencing hard economic times as well. Many are funded by investors and these hard times eliminate some of the underfunded smaller gas companies from the bidding process. It is impossible to predict when these difficult times will improve. There are some issues we are quite sure of:
1. The Marcellus Shale may have 7 times more recoverable gas thean was estimated only a few months ago.
2. Kirkwood has the Millenium Pieline that can supply tens of millions of people less than 200 miles away.
3. Our coalition (as stated by Attorney Denton) has a very tight and contiguous map with pipeline easements leading to the Millenium Pipeline.
4. Don Zeangle, coalition geologist (with many years of experience in the gas and oil industry) is very excited abut the geology in Kirkwood. We have at least 3 different potential gas formations. We may be in the core of the Marcellus, and the Utica Shale along with the Trenton Black River Limestone.
5. The size of our coalitiion (10,400 acres) makes us very attractive to a large number of gas companies.
With the above items considered, the steering committee has decided to send out requests for bid packages.
Our time table to move forward is:
December 4, 2008 we will send requests out for bid packages.
January 9, 2009 is the deadline for gas companies to return bid packages.
January 15, 2009 the steering committee will meet with Attorney Denton and review the intereset in bidding.
JOINT COALITION FORM:
Several gas coalitions in upstate New York have joined together to share information. We have met several times since September and have prepared a letter to send to DEC.
NEWS ITEMS: MARCELLUS SHALE UPDATE.
ALBANY (AP) -- A geologist says the Marcellus shale region of the Appalachians could yield seven times as much natural gas as he earlier estimated, meaning it could meet the entire nation's natural gas needs for at least 14 years.
Penn State University geoscientist Terry Engelder said in a phone interview Monday that he now estimates 363 trillion cubic feet of natural gas could be recovered over the next few decades from the 31-million-acre core area of the Marcellus region, which includes southern New York, Pennsylvania, West Virginia and eastern Ohio.
Engelder and geologist Gary Lash of the State University of New York at Fredonia touched off a gas rush in the region last January with their study estimating that the Marcellus could yield as much as 50 trillion cubic feet of natural gas.
Geologists have long known about the existence of the Marcellus shale, but exploration there accelerated only recently when the price of natural gas rose high enough to make it economically feasible to use the advanced drilling techniques necessary to produce gas from the hard rock thousands of feet underground.
Production on the Marcellus gas field, or "play," is considered to be in the early stages, but the sheer size of it is drawing heavy interest from the exploration industry.
"It has the potential to be the biggest gas field in the United States," John Pinkerton, chairman and chief executive of Range Resources Corp., said last week in an interview at the Fort Worth, Texas-based company's office in western Pennsylvania.
Engelder first presented his new numbers in Pittsburgh last week at a conference on Appalachian gas sponsored by the energy information firm Platts. He said he based his revised estimate on new figures from Chesapeake Energy Corp., the nation's largest natural gas producer.
Oklahoma-based Chesapeake recently told investors and analysts that each square mile in the Marcellus could contain 30 billion to 150 billion cubic feet of gas. Engelder and Lash initially estimated 9 billion cubic feet per square mile.
Chesapeake also said the thickness of the gas-containing shale ranged from 50 to 300 feet, while Engelder and Lash assumed a thickness of 50 feet.
Applying his own calculations to numbers presented by Chesapeake, Engelder came up with his new estimate of how much gas the region might be able to produce over the next few decades, given enough time and money.
"Geologists are still trying to size this play," Engelder said. "We don't really know how much gas is there and how much can be recovered."
Chesapeake, StatoilHydro announce joint venture
THE ASSOCIATED PRESS
OKLAHOMA CITY -- Chesapeake Energy Corp. and Norwegian energy company Statoil Hydro announced Tuesday the formation of a strategic alliance to explore for unconventional natural gas opportunities worldwide and an agreement for a joint venture in large gas field in the eastern United States.
StatoilHydro will pay $3.375 billion for a 32.5 percent interest in Chesapeake's assets in the so-called Marcellus Shale geologic formation - about 1.8 million net acres - in the Appalachian region. Oklahoma City-based Chesapeake would retain the remaining 67.5 percent interest in the assets.
StatoilHydro will pay $1.25 billion of the amount in cash at closing and $2.125 billion from 2009 to 2012 by funding 75 percent of Chesapeake's share of drilling and completion expenditures.
The companies said the development of the area could support the drilling of between 13,500 and 17,000 horizontal wells during the next 20 years, and cover more than 32,000 leases in Pennsylvania, New York, West Virginia and Ohio. StatoilHydro said it was acquiring about 2.5 billion to 3 billion future, recoverable barrels of oil equivalent through the deal.
"We are establishing a strong platform for further developing our gas value chain business and growing our position in unconventional gas worldwide," said Helge Lund, the president and chief executive officer of StatoilHydro.
"The agreement we have entered into with Chesapeake provides us with a solid position in an attractive long-term resource base under competitive terms. Additionally, this deal adds a major building block to the gas value chain position we have established in the U.S., the world's largest and most liquid gas market."
Chesapeake is the largest producer of natural gas in the U.S., while StatoilHydro is the second-largest natural gas supplier to Europe. As part of the agreement, the two companies will form a strategic alliance. The closing on both the transaction and alliance should occur by the end of this year, officials from the two companies said.
"We are honored to establish a business relationship with StatoilHydro and are excited about the mutually beneficial nature of our transaction with them," Chesapeake CEO Aubrey McClendon said.
"We believe this transaction creates substantial value for both companies and unique opportunities for international growth with one of the leading international oil and gas companies. Jointly we can export our world class unconventional natural gas technology for further long-term growth."
In recent months, Chesapeake also sold a 20 percent working interest in its assets in the Haynesville Shale in north Louisiana and east Texas to Plains Exploration and Production Company for $3.3 billion and a 25 percent working interest in its assets in the Fayetteville Shale assets to BP America for $1.9 billion.
DEC Hearings.
The New York State Department of Environmental Conservation (DEC) has finalized logistics for a series of meetings to give the public an opportunity to participate in the analysis of the potential environmental impacts of high-volume hydraulic fracturing of horizontal wells in New York's natural gas-bearing Marcellus and Utica shale formations. The meeting in our area will be Monday, November 17, 2008 at Broome Community College, West Gym, 901 Upper Front Street, Binghamton, NY 13902. Note: The location will open at 4:30 p.m., with the formal meeting beginning at 5:15 p.m. Brief remarks by Department staff will be followed by public comments starting at 6 p.m.
The environmental activist groups are working to build a strong case against any potential environmental impacts.
Coalition Status as of 10-31-08.
We completed most of the interviews for large parcels in regard to the tailoring clauses for leases October 22nd. Attorney Denton's office is completing the telephone interviews, however there are some members his office has had a difficult time contacting. If you have not been contacted by his office, it is imperative that you contact his office as soon as possible if you want to be included in the coalition's bidding process. Attorney Denton can be reached at (607) 734-0661.
The steering committee will be meeting with Attorney Denton on Monday, November 17th to move forward with the bidding process. In spite of the hard times on Wall Street, there are some encouraging signs that this may not have affected the natural gas development in the Marcellus shale. Kirkwood has great potential in the Marcellus shale, we have the Millenium Pipeline and the geology shows we are in the core area. Attorney Denton told our steering committee that our coalition is strong, well organized, our map contains many contiguous acres, has the potential for many gas well sites and good pipeline easements.
Cut-Off Date to Join the Kirkwood coalition was October 15th.
We received numerous new members and more interviews will be conducted October 22nd. This should complete all face to face interviews with Attorney Denton's office. Attorney Denton's office will also be conducting more phone interviews with new members that have 15 acres or less.
Tailoring Clauses are in the process of being prepared.
Attorney Denton's office is currently preparing the tailored leases for individual properties. When the tailoring clauses are completed, a meeting will be scheduled with the full coalition members to review and explain the master lease. Attorney Denton continues to ask for your patience as he continues to work towards the bidding process.
Pipeline Easements and Seismic Testing
Attorney Denton advises all members not to allow any pipeline easements or seismic testing on your property or on the town roads along your property. In many cases you own to the center of the road. Any seismic testing on these roads may be considered trespassing. If you are approached for pipeliine easements and/or seismic testing, contact Attorney Denton at (607) 734-0661. These issues will be addressed in the lease being prepared by the attorney for the coalition.
Review of Previous and Outdated Information:
Letter to Kirkwood Landowners
In a final effort to encourage Kirkwood landowners that have not joined the Kirkwood Gas Coalition to join, the following letter will be sent:
Dear Kirkwood Landowner,
We are contacting you in an effort to inform you about the Kirkwood Gas Coalition. Last winter gas companies approached many landowners in regard to leasing their property for the mineral rights. In most cases we were uneducated and vulnerable to the offers received