Friday, November 18, 2011

Letter from a Colorado Driller to Cortland Landowners: Best of Luck With Your Prospect

This text was read aloud by Cortland County landowner Robert Crowley at the DEC's SGEIS hearing, held in Binghamton, NY on the afternoon of Nov. 17.

The original was received by the leader of the Taylor Land Group, which is centered in a township in eastern Cortland County.  It came by email in reply to the group having
sent around — to more than 20 different exploration and production companies — coalition membership maps covering 13,000 unsigned acres.
Sent: Friday, October 7, 2011 5:55 PM
Subject: September 26th 2011

To whom it may concern at the Taylor Land Group,

I wanted to write you a quick e-mail in response to your September letter.  I don't know your group and this letter is in no way intended to throw stones at you all.  Your letter just ended up on my desk, and I wanted to write back to someone in New York with some thoughts.

We are a family-owned company out of Denver, Colorado.  We have six people in our office and are the definition of a small business.  We aren't "BIG OIL," and we appreciate the environment and the outdoors as much or more than most.  In fact, I am probably going to jump on my mountain bike after I finish writing this e-mail.

We've tried to do business in New York for the past decade and frankly it has been a very trying experience.  We've been stewards of the land, worked honestly with the surface and mineral owners, and generally tried to do business the right way.

From my grandfather to my dad to myself, we've had the pleasure of doing business in numerous countries around the world and states in the U.S., and we've never experienced the outright hostility to our industry as has been the case in New York.  Whether it is the government bureaucracy, the misinformation and outright lies about fracking, or the general hostility to resource development, your state simply does not want this industry's business.

New York very well might have tremendous Utica and Marcellus resources, but so do lots of other places like North Dakota, Nebraska, Wyoming, etc.  At some point you have to say, life is just too short and take your time, your jobs, your donations to the 4H and Fire Department, etc., and your money and put them someplace where they are appreciated and not reviled.

Like I said at the beginning, I am not pointing fingers at your group.  I just want you to know how I and probably lots of other people in my business feel.  If anyone in the Southern Tier needs a job, the most reviled company in America (Halliburton) is hiring 11,000 people this year in North Dakota alone.  Someone with a high school education can make $125,000/year within two years.  That job could be in New York, but it's not...

Best of luck with your prospect

Helm Energy / Mega Energy
Without more detail, or more digging, I can't say with absolute certainty if this is the same Mega, but it seems likely:  MegaEnergy Operating Inc. is still the DEC-listed operator on eight at-one-time planned or drilled wells running between Steuben County on the west and Broome County on the east.  None is still active today, and the wells appear to have been designed to test Oriskany sandstone, or Trenton-Black River limestone, from 2004 onward.

The DEC's well transfers database shows MegaEnergy during 2010 and 2011 formally transferred to Inflection Energy, LLC ownership and responsibility over four additional wells in Tioga County, NY.  One was a TBR well, and the others were Oriskanys, and — since there was an interested buyer — these wells might presumably someday show some production.

Keep in mind
that any well, in this part of upstate, reaching Oriskany sandstone also necessarily passes through Marcellus shale, and any well reaching Trenton-Black River goes through both Marcellus and Utica shales.  It's not unheard of, furthermore, for gas companies to disguise the true intentions of their test wells by listing a plausible-but-bogus "objective formation."

So this looks to me like a quiet business decision
by at least one North American E&P company to simply give up on New York State altogether after more-than-several years of effort.  And this was not so much because of geology — but because of a hostile regulatory and cultural environment for the natural gas business.

Cuomo, meanwhile, has come into office with a tout that New York State is now open for business.

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