MDN recently received a hot tip from a reader that says Shell (i.e. SWEPI) may have recently sold its Tioga County, PA assets in northcentral PA. Yesterday, Pin Oak Energy issued a press release to say they have cut a deal to buy Shell’s northwestern PA assets, some 43,000 acres in the Utica. Which all feeds into the rumor we shared with you last November that Shell is pulling out of PA drilling (see Is Shell Pulling Out of Pennsylvania Marcellus?).
In our post last November, we recounted the words from an MDN reader who was visiting a Shell drill site and was told, “Shell is pulling out all the northern tier assets and heading to Texas.” We reported a second rumor, from a difference source, who said, “Shell is looking to sell its acreage in Tioga County, PA. Shell has been assigning well site workers to other Shell operations in other parts of the world.” Since that time, we’ve been on the lookout for verification of those rumors.
A few days ago MDN received the following email from a reliable source, who said:
SWEPI may just have unloaded 57 pages of assets in Elk Twp (Marshlands) to Tilden Marcellus Holdings. (CONVEYANCE/ASSIGNMENT MAR 27, 2019 – Landex)
Also recorded was a mortgage to TILDEN MARCELLUS LLC from WHITE OAK GLOBAL ADVISORS LLC. And, there is an SEC filing ref Tilden’s intent to raise $10M, $25K minimum investment.
It’s Tilden Marcellus, they’re the same folks who bought East’s old Texas Creek play a while back under the name Rockdale Marcellus. What they got is a slimmed down version of Ultra’s original Marshlands play, as some leases had expired. But there’s plenty of acreage HBP by mediocre Marcellus wells, so they can wait. And hopefully generate some decent cash flow in the mean time.
Our source provided a link to the Pennsylvania Dept. of Environmental Protection website that lists owners of various parcels where permits have been applied for/issued. Here’s a screen shot for Tilden Marcellus, showing ownership of wells in the Marshlands area of Tioga County:
Our source also provided a link to the Securities and Exchange Commission website showing Tilden recently filed to raise $13 million, requiring a $25,000 minimum investment. Nearly $3 million has already been sold (as of the filing date on March 12).
So, we don’t know for certain that Shell has sold its Tioga County assets, but it sure looks that way.
Who is Tilden Marcellus? As our tipster tells us, they are one and the same as Rockdale Marcellus, better known as just Rockdale. The company has assets and purportedly drills in both South Texas and northeast Pennsylvania. We’ve not heard much about Rockdale. The only post we’ve published that mentions Rockdale was from early November 2017 when UGI purchased a 60-mile pipeline gathering system from Rockdale that spans Tioga, Bradford and Lycoming counties (see UGI Buys NatGas Pipeline Gathering System in NE PA).
Then yesterday, Pin Oak issued this press release:
Pin Oak Energy Partners LLC (“Pin Oak Energy” or the “Company”) announces the closing of a transaction with SWEPI LP (”Shell”) for approximately 43,000 acres prospective for Utica shale development in northwestern Pennsylvania. The transaction increases Pin Oak Energy’s acreage position across the Appalachian Basin to 167,000 net deep acres with 99% of those net deep acres being held by production (“HBP”).
Pin Oak Energy’s Chief Business Development Officer, Mark Van Tyne, stated, “This transaction further bolsters the Company’s deep Utica rights in the oil and wet gas windows of the play. The fact that the majority of the acreage is HBP affords us time to more thoroughly evaluate the region as we high grade locations for economic development. With multiple deals in our pipeline, Pin Oak Energy looks forward to continuing to build our brand and asset base.”
Pin Oak Energy’s net deep acre position in Mercer, Crawford and Venango Counties, Pennsylvania increased to a total of 60,000, 5,500 and 7,100 respectively. The Company now touts 64,000 net deep acres in Ohio and 103,000 net deep acres in Pennsylvania. The acquisition also includes drilled and completed, but not on-line, horizontal Utica Shale wells along with previously built, but not drilled, well pads.*
Pin Oak doesn’t come right out and say the acreage is located in Mercer, Crawford and Venango counties, but they certainly imply it. Notice that the acreage includes already-drilled but not yet completed Utica wells.
It was just a month ago that Pin Oak announced another deal, to buy shale and conventional assets in Elk County, PA (see Pin Oak Energy Buys Marcellus & Conventional Wells in Elk County).
While Pin Oak is a relatively young company (around since early 2015), the people running it have been around for a long time. CEO Chris Halvorson says Pin Oak is comprised of folks who were formerly with AB Resources. You may recall that AB Resources built a position in the southwestern “core” of the Marcellus and sold out to Chevron several years ago.
Pin Oak is “what’s next” for for the former AB folks. Their target: the Appalachian basin. However, they’re doing things differently than most others–zigging while everyone else zags. Pin Oak likes to pick up already-producing oil and gas wells instead of raw acreage, and they don’t take private equity money to fund operations–preferring to “pay as you go” with their own money (see Pin Oak Energy’s Unique Strategy and PA Focus).
Bottom line: Sure looks to us like the rumor we reported back in November is true–that Shell/SWEPI is leaving PA drilling behind.
*Pin Oak Energy Partners (Apr 3, 2019) – Pin Oak Energy Announces Acquisition of 43,000 Utica Acres From SWEPI LP in NW Pennsylvania
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