RE: 8 Million for Land is a game changer I wish I could be as excited as Igstar, but I am more of a realist.
Direct Energy, whose upstream operations are magnitudes larger than MQL in a number of operational areas, is a competitor in the Michichi area. And one with comparable technical abilities and a load more financial resources than MQL
Direct Energy has geologists, not unlike MQL and may have bid on the land (one Section) that MQL did buy at the August 8 sale as noted. It may have been that the Direct Energy geologists ranked the land that MQL bought as being inferior to that 2+ section lease that Direct Energy did buy. Direct Energy owns the facilities through which MQL processes their natural gas in this area. Direct Energy has a lot more than 83 sections in this area already and has the cash and technical resources necessary to high grade leasehold and pay what it takes to be successful at land sales.
The two agents, Scott Land and Standard Land, could be representing dam near anybody, including MQL or Direct Energy. Bids are set by a combination of interpreted prospectivity of the lands posted, the depth of the land budget relative to other prospects available and the competitive nature of the play type.
In this instance, singular success at a land sale does not indicate an appetite to take out a corporate competitor on a play that is in its infancy with a short production history.
Yes, I would like to know who laid out the big bucks for this land. But it could be on a totally different play than that which MQL has drilled or is drilling. But more importantly, as holding MQL stock, I'd really like to know how many of those 100+ locations they talk about having are realistically going to get drilled within their budget limitations (100 locations at $2.2 MM per would take over 5 years of their total 2012 capex budget) and would add incremental production after flush rates and natural depletion.