Another Appalachian exploration and production company has formed, announcing Wednesday that it has acquired 8,000 acres "in the core of the Marcellus fairway" in north-central Pennsylvania with the goal of building its position.
S.T.L. Resources LLC said the properties are prospective for the Marcellus, Utica and Upper Devonian shales. The transaction was funded by the company's founders and another investor, but terms of the deal were not disclosed. S.T.L. owns a 100% working interest and said it would operate all new wells drilled.
Infrastructure assets and current Marcellus production were included in the deal. Founder and Managing Partner William Dressel told NGI's Shale Daily that the company has not disclosed the location of the properties because of an "active leasing program." He said more information would be released in the future.
Dressel established the company after years working in land services. In 2009, he founded Iron Will Energy Inc. and later went on to establish Front Runner Seismic Inc., which are both still operating. Prior to that, he worked in various land services positions in basins across the country. The company said he has negotiated Appalachian land contracts for more than 350,000 acres over the years.
CEO Clinton Coldren said he has helped launch four other oil and gas companies during his career and held various operational, drilling and petroleum engineering positions with oil majors, including Chevron Corp., and large independents. William Hayward, who also serving as chairman and senior geological adviser, founded Hayward Natural Resources, where he established partnerships across the Appalachian Basin and in Texas that have led to the “drilling of thousands of conventional and unconventional wells,” according to S.T.L.
S.T.L. joins a growing list of companies in north-central Pennsylvania, where in recent years a Royal Dutch Shell plc unit and Seneca Resources Corp., among others, have tested Utica wells at more than 20 MMcf/d. The area, which includes Tioga, Potter and McKean counties, has long been a Marcellus hotbed, but interest has grown in the Utica there. S.T.L.'s headquarters are in Tioga County.
It’s not the only new operator in town. American Petroleum Partners LLC secured an equity commitment in 2015 to lease and operate land in Ohio, West Virginia and Pennsylvania. Former EQT Corp. executives announced a $250 million equity investment the same year to launch Lola Energy LLC, which is also focused on the basin.
"We believe that the economic returns of the Appalachian Basin, when combined with the team's local knowledge and ability to operate efficiently, will provide our partners with favorable risk-adjusted returns," Coldren said. "Because of the past market downturn, many operators in the basin are over-extended and have been pursuing strategies to divest noncore assets or identify new partners."
That's created opportunities for new entrants and those looking to grow their positions. Thailand's largest coal producer, Banpu pcl, closed this month on its second nonoperated interest in Northeast Pennsylvania. Investment firm Kalnin Ventures LLC said the company acquired a $63 million stake with interests in 170 wells from Chief Oil & Gas LLC. Banpupaid $112 million to Range Resources Corp. last year for another nonoperated interest in the area. Kalnin said it would continue to look on behalf of its investors for more opportunities in Appalachia.