China invests 83.7 Billion in WV Energy

[*Synric*]

This post could go either way PnR or just random Klotsch, but its not every day you hear its likely you hit the lottery.


http://www.wsaz.com/content/news/China-Energy-signs-837-billion-West-Virginia-investment-agreement-456288953.html

I own rights to two different Oil Well sites now (along with just a couple others...all family). While they pull in a good chunk of change the foreman was telling me this morning that over the next couple years since those sites profit will increase.

BUT he also mentioned that since those wells are consistent producers they could very well be one of the first sites that this money goes into for a Deep Drill which would would jack up my profit into the millions....I thought he was messing with me until I came home and found this info online. Lets just say Ive been prancing around all day grinning from ear to ear.

Thank you Donald Trump you are my Hero.

[NATI BENGALS]

Commies who wrecked their country coming to rape our land.

Sounds like a sweet deal...

No but for real.. What is China getting rights to for 80 some billion? WV natural resources for 20 years?

Invest in clean water and those popular Beijing dust masks. Or just move.

Congrats on the hopeful payday. I remember when some things were priceless and people had pride. Selling WV to China doesnt really excite me.

[Stewy]

(11-26-2017, 01:39 AM)NATI BENGALS Wrote: Commies who wrecked their country coming to rape our land.

Sounds like a sweet deal...

No but for real.. What is China getting rights to for 80 some billion? WV natural resources for 20 years?

Invest in clean water and those popular Beijing dust masks. Or just move.

Congrats on the hopeful payday. I remember when some things were priceless and people had pride. Selling WV to China doesnt really excite me.

#1 - Most mineral rights in WV are not owned by the government,  They are owned by corporations or land owners like Synric.  So the gov't isn't giving away anything.  They have essentially paved the way for investment, which is why people like Synric will get a nice payday.  
#2 - Even if someone doesn't own the minerals, if they own the surface than they will get paid for the use of their surface to make roads and be paid for any property damage while a well is in production.
#3 - While is appears clear that China wants to invest in several aspects of energy, they will have to compete with the current entities that dominate the energy market in the upstream (finding producing) and the downstream (processing and delivering to the consumer), namely Dominion which is a 100+ year old publicly traded utility.  There's nothing WV can do to push them out or others like them.
#4 - Also there is Marathon Production Company (Valvoline/Speedway), which dominates refining and the retail gasoline market in Central Appalachia out of Russell Kentucky.
#5 - It sounds like what this company plans to invest in all aspects of energy, which will be GOOD for the people of WV, not bad.


What can the state do, you ask, to be attractive if they have no rights to well, anything?  The state can pass laws and regulations. to smooth the path between land owners and China Energy.  These could be tax cuts to encourage investment, laws requiring greater monetary incentives paid to land owners by China Energy for land use, breaks on taxes associated with invest or lower or better tax deals on  hydrocarbon production.  Deals with CE to build infrastructure (roads, bridges, temporary or permanent town with housing for workers which can be bought by the employees in the future, etc.  The list of potential benefits is legion, mostly having to do with removing taxes and regulations to encourage investment.


With that said, having gone to school in Appalachia, and having worked Appalachian Petroleum Geology in school and with Ashland Exploration for 5 years, i am HIGHLY skeptical of the Drill Deeper concept of get rich quick.  This in my mind is a fallacy.  There are multitudes of wells in the Appalachian Basin that are "Drilled Deep" and mostly in the 70's.  There are some very famous wells, that were cored for almost their entire length and have a complete record of the rock section.  These wells were drilled into the cratonic rift basement.  They found gas shows and beautiful Cambrian aged sands, but no hydrocarbon accumulations.


What studies have generally found after these deep wells were drilled is that the current day thermal maturity of the source rocks, do not match the burial depths.  The rocks are far too hot for their burial in other words.  What happened was the rocks were buried in the Paleozoic by the building of the Appalachians during the collision of Gondwana down to 30000 to 40000 feet depth, which cooked the deep source rocks, then eroded, and then uplifted 10 million years ago during a regional isostatic rebound event and eroded even more.  To simplify, rocks that were buried at over 40,000' are now at 8,000 to 15,000 across the basin due to erosion over the 400-600 million years since the North American craton was built by rifting and mountain building.  This early deep burial not only cooked off the deep source rocks but also cracked and cooked off whatever deep hydrocarbons happened to be trapped early on in the history of the basin.


As a matter of fact, in the early 1900's WV was a major producer of CO2 for the Coca Cola bottling company, because CO2 was readily available in deep wells where the methane had been cooked off below ~8,000'.  See this link - http://www.roadarch.com/beverage/wv.html


Most current production in the basin is sourced from or produced within the Devonian Shale and higher in the section.  Thus since the deeper source rocks have been cooked and hydrocarbons do not migrate down, then drilling below the Devonian into the Silurian and deeper, has been mostly unsuccessful in Appalachia.

https://pubs.usgs.gov/pp/1708/ - USGS Extensive Document on Appalachian HC potential from 2015

With the above said, I am sure there are areas where one could drill deeper, but one has to remember that the Appalachian basin is NOT under explored.  It has been explored and produced since the early 1900's.  So while I would not be surprised the State gov'ts enthusiasm and the 2015 USGS report on Appalachian HC potential could get a foreign company excited to drill, I am skeptical of their ability to out smart and out think intelligent good ole boys who have been drilling in the basin for nearly 100 years.  Having worked with many of these types of individuals at Ashland Exploration, I can tell you they weren't dumb and knew the basin coming and going.


Synric I wish you good fortune and I hope you make a bundle, but I wouldn't count my millionaire chickens before they're hatched.  hehe  Just be sure you get compensated well for any land use ANY oil and gas company pays to use your land.  Definitely consult with an O&G lawyer before singing any deals.

[JustWinBaby]

(11-26-2017, 07:38 PM)Stewy Wrote: #1 

Awesome post.  So educational.

[Stewy]

(11-27-2017, 02:34 AM)JustWinBaby Wrote: Awesome post.  So educational.

YW

Glad to share.  I don't get to talk Appalachia Geology much any more.  =)

[*Synric*]

(11-28-2017, 09:57 PM)Stewy Wrote: YW

Glad to share.  I don't get to talk Appalachia Geology much any more.  =)

The Coca Cola Bottling is very true there are two former bottling plants in my area both now empty.
Lol and yea I know it won't be "quick money" but over a period of decades.
Also yes the investment is huge for thr state of WV as it will bring tons of jobs and other businesses to the area. 
Our Well site was one of the first (2007) since then 6 or 7 more have sprung up in the area along with 3 new motels and countless restraunt and thrift stores.

[Stewy]

(11-28-2017, 10:52 PM)Synric Wrote: The Coca Cola Bottling is very true there are two former bottling plants in my area both now empty.
Lol and yea I know it won't be "quick money" but over a period of decades.
Also yes the investment is huge for thr state of WV as it will bring tons of jobs and other businesses to the area. 
Our Well site was one of the first (2007) since then 6 or 7 more have sprung up in the area along with 3 new motels and countless restraunt and thrift stores.

I don't want to stalk or anything, but where are you generally located in WV?  Sounds like you're in an area that IS being developed, especially if there is new drilling.  I apologize.  I assumed your wells were old.  Most established areas have been producing for 80 years at least, so I assumed incorrectly it seems.

[Stewy]

This is a bad ass cool site - for your viewing pleasure. My guess is since Synric well is somewhat new and it is being currently developed in the area, then it is a Marcellus/Devonian Shale well. They might not drill deeper, but they may drill more =)

http://ims.wvgs.wvnet.edu/mar/viewer.htm

[*Synric*]

(11-28-2017, 11:26 PM)Stewy Wrote: I don't want to stalk or anything, but where are you generally located in WV?  Sounds like you're in an area that IS being developed, especially if there is new drilling.  I apologize.  I assumed your wells were old.  Most established areas have been producing for 80 years at least, so I assumed incorrectly it seems.

Wetzel County about 40 minutes south of Wheeling.

[Stewy]

(11-28-2017, 11:50 PM)Synric Wrote: Wetzel County about 40 minutes south of Wheeling.

Ah - right in the heart of the Marcellus play development - that explains it.

As I said before, I'm not sure about the drill deeper part anywhere in Appalachia due to the thermal maximum associated with the ancient burial history, but shale plays notoriously need fairly tight spacing of wells due to the lack of natural permeability in shales, so depending upon your property sizes and dimensions they may need to drill more wells, which means more potential profit.

As an aside, even though shale well usually don't make one an instant millionaire, they do produce for a very long time compared to conventional reservoirs.  Your well, dependingo n the quality of the wellbore, could produce for 30+ years.   :andy:

[6andcounting]

Synric in 3 months.

[*Wyche'sWarrior*]

(11-26-2017, 07:38 PM)Stewy Wrote: #1 - Most mineral rights in WV are not owned by the government,  They are owned by corporations or land owners like Synric.  So the gov't isn't giving away anything.  They have essentially paved the way for investment, which is why people like Synric will get a nice payday.  
#2 - Even if someone doesn't own the minerals, if they own the surface than they will get paid for the use of their surface to make roads and be paid for any property damage while a well is in production.
#3 - While is appears clear that China wants to invest in several aspects of energy, they will have to compete with the current entities that dominate the energy market in the upstream (finding producing) and the downstream (processing and delivering to the consumer), namely Dominion which is a 100+ year old publicly traded utility.  There's nothing WV can do to push them out or others like them.
#4 - Also there is Marathon Production Company (Valvoline/Speedway), which dominates refining and the retail gasoline market in Central Appalachia out of Russell Kentucky.
#5 - It sounds like what this company plans to invest in all aspects of energy, which will be GOOD for the people of WV, not bad.


What can the state do, you ask, to be attractive if they have no rights to well, anything?  The state can pass laws and regulations. to smooth the path between land owners and China Energy.  These could be tax cuts to encourage investment, laws requiring greater monetary incentives paid to land owners by China Energy for land use, breaks on taxes associated with invest or lower or better tax deals on  hydrocarbon production.  Deals with CE to build infrastructure (roads, bridges, temporary or permanent town with housing for workers which can be bought by the employees in the future, etc.  The list of potential benefits is legion, mostly having to do with removing taxes and regulations to encourage investment.


With that said, having gone to school in Appalachia, and having worked Appalachian Petroleum Geology in school and with Ashland Exploration for 5 years, i am HIGHLY skeptical of the Drill Deeper concept of get rich quick.  This in my mind is a fallacy.  There are multitudes of wells in the Appalachian Basin that are "Drilled Deep" and mostly in the 70's.  There are some very famous wells, that were cored for almost their entire length and have a complete record of the rock section.  These wells were drilled into the cratonic rift basement.  They found gas shows and beautiful Cambrian aged sands, but no hydrocarbon accumulations.


What studies have generally found after these deep wells were drilled is that the current day thermal maturity of the source rocks, do not match the burial depths.  The rocks are far too hot for their burial in other words.  What happened was the rocks were buried in the Paleozoic by the building of the Appalachians during the collision of Gondwana down to 30000 to 40000 feet depth, which cooked the deep source rocks, then eroded, and then uplifted 10 million years ago during a regional isostatic rebound event and eroded even more.  To simplify, rocks that were buried at over 40,000' are now at 8,000 to 15,000 across the basin due to erosion over the 400-600 million years since the North American craton was built by rifting and mountain building.  This early deep burial not only cooked off the deep source rocks but also cracked and cooked off whatever deep hydrocarbons happened to be trapped early on in the history of the basin.


As a matter of fact, in the early 1900's WV was a major producer of CO2 for the Coca Cola bottling company, because CO2 was readily available in deep wells where the methane had been cooked off below ~8,000'.  See this link - http://www.roadarch.com/beverage/wv.html


Most current production in the basin is sourced from or produced within the Devonian Shale and higher in the section.  Thus since the deeper source rocks have been cooked and hydrocarbons do not migrate down, then drilling below the Devonian into the Silurian and deeper, has been mostly unsuccessful in Appalachia.

https://pubs.usgs.gov/pp/1708/ - USGS Extensive Document on Appalachian HC potential from 2015

With the above said, I am sure there are areas where one could drill deeper, but one has to remember that the Appalachian basin is NOT under explored.  It has been explored and produced since the early 1900's.  So while I would not be surprised the State gov'ts enthusiasm and the 2015 USGS report on Appalachian HC potential could get a foreign company excited to drill, I am skeptical of their ability to out smart and out think intelligent good ole boys who have been drilling in the basin for nearly 100 years.  Having worked with many of these types of individuals at Ashland Exploration, I can tell you they weren't dumb and knew the basin coming and going.


Synric I wish you good fortune and I hope you make a bundle, but I wouldn't count my millionaire chickens before they're hatched.  hehe  Just be sure you get compensated well for any land use ANY oil and gas company pays to use your land.  Definitely consult with an O&G lawyer before singing any deals.

AWESOME post Stewy....you know your Appalachian history AND geology well.  While I knew much of the history you discussed, this was VERY enlightening on the geology front.  Thanks for sharing.

[NATI BENGALS]

Thanks for the nice post Stewy.

Still doesnt make me feel better about communist china showing up with huge bags of money to a place abundant in our natural resources full of people desperate for money. While environmental regulations are rolled back.

Something tells me China isnt doing this for the good of people of West Virginia.

[*Synric*]

(11-30-2017, 04:40 PM)NATI BENGALS Wrote: Thanks for the nice post Stewy.

Still doesnt make me feel better about communist china showing up with huge bags of money to a place abundant in our natural resources full of people desperate for money. While environmental regulations are rolled back.

Something tells me China isnt doing this for the good of people of West Virginia.

They are buying a needed commodity from the US. Which puts needed money into an ailing economy. 


Which we turn around and put back into their Economy by buying simple things like Socks...

It's Win Win. This is a very very good thing for the state of WV and the US.

[NATI BENGALS]

(11-30-2017, 04:53 PM)Synric Wrote: They are buying a needed commodity from the US. Which puts needed money into an ailing economy. 


Which we turn around and put back into their Economy by buying simple things like Socks...

It's Win Win. This is a very very good thing for the state of WV and the US.

The way i see it competition is good in capitalism. Inviting communist competition in and giving them access to one of our greatest collections of natural resources seems like a bad idea.

[*Synric*]

(11-30-2017, 06:22 PM)NATI BENGALS Wrote: The way i see it competition is good in capitalism. Inviting communist competition in and giving them access to one of our greatest collections of natural resources seems like a bad idea.

You see competition where there is none. The Ohio Valley has closed multiple power plants because no one is buying the energy. Hundreds out of work business closed due to not being able to sell something as simple as energy.


You have a problem with communism and I believe rightfully so but politics is not involved here this is simple commerce. WV has an abundance of a product we can't sell. China is a new buyer.


PS: You support that communist country daily. I guarantee 95% of the products in your home have a stamp that says made in china. r Whats wrong with some of that money coming back to the US to stimulate the economy? Also it builds relations between two of thr most powerfull nations.

Also this allows me to expand my small construction company to employ more Americans which brings more jobs and money to my area.

Like I said this is a great thing.

[NATI BENGALS]

(11-30-2017, 07:14 PM)Synric Wrote: You see competition where there is none. The Ohio Valley has closed multiple power plants because no one is buying the energy. Hundreds out of work business closed due to not being able to sell something as simple as energy.


You have a problem with communism and I believe rightfully so but politics is not involved here this is simple commerce. WV has an abundance of a product we can't sell. China is a new buyer.


PS: You support that communist country daily. I guarantee 95% of the products in your home have a stamp that says made in china. r Whats wrong with some of that money coming back to the US to stimulate the economy? Also it builds relations between two of thr most powerfull nations.

Also this allows me to expand my small construction company to employ more Americans which brings more jobs and money to my area.

Like I said this is a great thing.

They are passing us up in solar panels. And now they are coming to stake their claim on our land and start taking our natural resources.

Im not gonna be ok with that just because they already took all the manufacturing of many household items away from us.

When china is coming for your natural resources it isnt simple commerce. Its a shit show conman who is good at bankruptcy and lying setting us up for failure.