New York Shale Gas Potential

L. W. Allstadt Ithaca October 30,2013

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What Drives The Oil and Gas Industry

Maximize Share Price

Higher Share Price =
Increased borrowing ability for expansion Still higher share prices Higher executive compensation

RESERVES
Add Reserves: Increase share price
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What Wall Street Looks For

Reserves
oil/gas in the ground that can be extracted with existing technology at current prices.

Increase production Replace more reserves than what is produced Miss targets and Wall Street hits share price
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Shale Wells Lack Staying Power

The Economic Realities

Financial resources allocated to best prospects among many plays

Historical Price relationship Oil $$$ >> Wet Gas $$ >> Dry Gas $ Dry Gas needs very high volumes to compete for capital

Companies Value Well Data

Proprietary (limited reporting) Includes information on formations the well encounters Archived
Needed to evaluate future drilling Needed for sale of wells or company
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< Marcellus

< Utica < Black River

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< Oatka Creek

Grey Shale low TOC

< Union Springs

Black Shale high TOC

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NY DEC Well Data Base

Searchable Public Data
By Operator, County, Target Formation, etc. Well location, production, formation depths, type well Company input not checked by DEC

Following Charts
Show completed wells that targeted or passed through Marcellus. Many through Utica. Show active permit applications Exclude wells not completed
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What does all this mean for NY?

Central NY Drilling Boom Intensive Drilling Test Wells - near PA
- elsewhere
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Highly Unlikely Possible near PA border

Unlikely to be wide spread

Very Likely
-

Probably

Infrastructure impacts

Centralizer ponds Compression stations Gathering/ Transmission lines Flow-back fluids Disposal Wells Brine spreading on roads Cuttings to landfills

Likely (proportional to
development)

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