I still can't figure that out. HK assembled 250k acres in eastern TMS and some of that came from ECA. HK is starting drilling using permits transferred from ECA. Is ECA backing off of TMS as one of 5 core areas, or are they just narrowing down their acres to what they believe is the sweet spot, because their position was so large that they could not develop it all during lease terms. Earlier ECA had talked about possible JV of some of TMS acres but this looks like sale of part of the leasehold.
I suppose it would have gotten a little attention if it was 999. They will also have to refill every propane tank across the country - and gas going there doesn't count as refilling storage.
The zealots don't have any land, except the parcels their mountain get always are located on. And they usually aren't that eager to part with big buckets of their own cash. A field trip to river ton is not a high cost item
That is my point - if the parties and the state and the Feds get involved it might work. Because the state and the Feds would have to supply the money. (Maybe a use for the new marijuana tax revenues). I think the $100 might be conservative. Thompson Creek was happy to just walk from $50 million in sunk costs so as not to deploy the capital needed to get the mine running.
Thanks for posting that article. I wonder if the alliance is also having discussions with the forest service or with Colorado politicians at the state level, because just like USEG doesn't have the money to get a mine up and running, struggling Crestted Butte doesn't have the money to buy out a promising mine site, retire it , and take over the water treatment plant. Ubless they have a hundred million dollar benefactor. Meetings are nice but seldom lead to anything if the economics aren't there.
Respects disagree- all current oil profits barely operate the water treTment plant and other costs USEG would have to be 10 times current fund to develop a mine from cash flow
1. Production increase very modest. It was supposed to be at 1700 in 2011 just based on Bakken.
2. Revenues still only 9 million
3 Moly costs back up to a million a quarter. So far the oil and gas profits are almost paying the freight on a non-operated moly mine. But not quite.
4. It will take $100 million to get to first moly production. USEG cannot do that. . Alliance know that, city of Breckinridge knows that, state of Colorado knows that, national forest service knows that. Why should they have any urgency..
I do hope they gave February production number Friday and some estimate of 1Q production.
1. Deep panuke has been selling 300 mmcf/day into great Algonquin city gate (Boston) pricing. I
That creates great cash flow. Even though ECA has spent huge $$ to get to this point, ongoing costs are very low.
2. TMS heating up. Halcon has bought about 100,000 acres from ECA to build its interest to 300k, about 250k in east part of play contiguous to ECA. Halcyon starting development drilling with experienced rig from their eagle ford extension. They think lessons learned there will translate to TMS, which they say has some similar characteristics. ECA is cooperating with Halcon (and with Goodrich) . They likely had too many acres to develop (they still have more than 200k) . Anyway they should have some cash from the sale of acres to Halcon, and the increased pace of activity will help everyone as more wells are drilled and the TMS is proven as highly economic resource play worthy of full development mode.
True enough, and both are gone from their respective companies. They could fine ECA a million, but they could put randy and Aubrey in jail. Wonder if that is part of why Randy left. Of course the ECA Board found no evidence of wrongdoing - they couldn't lie about that.
Nothing new there - they have already said (quarter report and conference call) they don't plan any more drilling in Utica right now and are waiting on the results of the wells in progress. Still it would be another huge write off if they exit, especially if they can't monetize the assett for most of what they have invested there. We all better hope and pray they have cracked the nut at TMS and do not have any missteps there. Buda and Eagleford are doing well, beyond expectations. Who knows what else they have with potential to be a resource play. Three is enough to focus on right now.
Con tango should give some production numbers on the two newest buda wells. That is likely the most important update we need from USEG when they report, other than Feb exit production that they won't give, because they never do.
And the storage report comes today as this air mass is heading east. This weeks withdrawal number and next weeks withdrawal number may be startling, even if everyone knows they will be large. Withdrawal has been historic. Everyone thinks replenishment will be easy. Maybe so, but it may require a higher gas price - something like supply and demand.
Lots of info on TMS. HK jumping in with 300k acres and 2 rig program this year with plans to push to full scale development mode soon. They are convinced enought o go all in in this play. ECA going a little slower but ECA may well commit to more aggressive development program soon.