If you have a Pugh clause, the clause will provide that only the portion of the land in a unit pool is held so that you are free to lease out the remaining land to another company so that you can earn money from the land.
If you don't have a Pugh clause all of your land will be held under the lease indefinitely but only the portion of the land in the producing unit will be earning you money in the form of royalties.
The remainder of the land is held by the gas company under the lease. You get zero income from the land while the gas company can hold your land without paying you anything.
Holding onto the lease requires capital expenditure.
Unless a certain number of wells have been drilled on a lease within a certain number of years, the lease reverts to the landowner within a set period of time.
they lose those assets! Gov. says if you don't drill, you lose the right.
How can they drill if they don't have the money?
CHK is a goner.
Those companies, which include Wal-Mart Stores Inc., International Paper Co., Honeywell International Inc. and United Parcel Service Inc., boosted their employment at home by 3.1%, or 113,000 jobs, between 2009 and 2011, the same rate of increase as the nation's other employers. But they also added more than 333,000 jobs in their far-flung—and faster-growing— foreign operations.
ECA says it gets a 9% internal rate of return on its natural gas at a price of $3/Mcf ($3/mmBTU).
This means it is profitable down to a price of about $2.73/Mcf.
The current US Nymex price is approximately $2/mmBTU (MCF).
Encana realized gas price1 ($/Mcf) 4.58
It is a dairy cow.
Supplies are still growing faster than normal this year, and analysts say the country may eventually run out of places to put its natural gas.
The EIA data "does nothing to alleviate the glut of supply we have and there's no sign of producers letting up yet" on lofty output, he said.