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New YorkShale Gas Potential

L. W. AllstadtIthaca

October 30,2013

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What Drives

The Oil and Gas Industry

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Maximize Share Price

Higher Share Price =Increased borrowing ability for expansion

Still higher share prices

Higher executive compensation

RESERVESAdd 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 atcurrent prices.

Increase production

Replace more reserves than what is

produced Miss targets and Wall Street hits

share price5

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Shale Wells Lack Staying Power

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The Economic Realities

Financial resourcesallocated to best prospects among

many plays

Historical Price relationship

Oil $$$ >> Wet Gas $$ >> Dry Gas $

Dry Gas needs very high volumes to

compete for capital 7

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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< BlackRiver

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< Oatka Creek

Grey Shale

low TOC

< Union SpringsBlack Shalehigh 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 passedthrough Marcellus. Many through Utica.

Show active permit applications

Exclude wells not completed11

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