Utica Shale Value Implications

By Roger Kramer, CPA, CITP

A January 3, 2012 Wall Street Journal article discusses the following:

Chesa­peake Energy is one of the largest gas pro­duc­ers in the Mar­cel­lus Shale for­ma­tion. It holds min­eral rights for large chunks of land in Ohio and Penn­syl­va­nia. Total SA, a French energy company, recently purchased a 25% interest in 619,000 of Chesapeake’s Eastern Ohio acres. Chesapeake received $610 million of the $2.02 billion purchase price when the deal closed 12/31/2012. The remaining $1.42 billion is to be paid to develop the field. 

Does the above infer a value of $3,942 per acre for mineral rights leases on similar Ohio land in those 10 Ohio counties?

What are the value implications for the Utica shale which stretches further west in Ohio?

To read more on this topic, see this recent Bloomberg article.