April 2019
http://www.canadacreekranch.com
President’s Message: April 2019
This month’s message will update you on the Riverside
Natural Gas Well closings discussed in last month’s
Presidents Message
As I reported in March, natural gas revenues from our 49
wells have been on a steep decline since they reached a peak
in 2008. In the past eleven years those revenues decreased
from $173 per membership to only $20 per membership in
2018. I also reported that Riverside Energy, operating 19 of
those wells, notified us in February their wells are no longer
economically viable and so they intend to close and plug all
of them beginning in mid-May of this year.
Since receiving that notice our General Manager has been
exploring three options that include: CCR taking over the
operation of those gas wells, finding another operator to
purchase those wells from Riverside, or allowing Riverside
to close and plug.
At the March Board meeting he advised the Board against
CCR taking control of those wells. Not only would there
have to be a hefty outlay of cash paid to Riverside to
compensate them for the infrastructure they’ve already put
in place (estimated at $122,000), but when CCR concluded
those wells should be closed and plugged we would bear
the entire expense of that decision (estimated at an additional
$299,000). Last year those 19 wells produced so little gas that
our royalty revenue only amounted to about $14,000. Not
only did the cost-benefit review come up lacking, but CCR
employs no one with an expertise in gas well operation –
and to hire such skill would certainly exceed expected
royalties. And, of course, actually operating gas wells is
beyond the scope of our Mission Statement.
Our General Manager also reported that neither of the
remaining operators were interested in taking over operation
of Riverside’s wells. This is not surprising as Riverside has
already determined it cannot profitably operate them and a
new operator would have to pay the same amounts as CCR
to acquire the wells and eventually close and plug them.
Our only viable option is to accept the fact these 19 wells
will be closed and plugged, and the revenue they have
generated will cease. The Board voted unanimously to direct
Riverside Energy to close and plug their wells as soon as
practicable. That process will begin mid-May. Our General
Manager will be working in conjunction with Riverside
Energy and the Michigan Department of Environmental
Quality to ensure the process goes smoothly and is carried
out in a way that protects our lands and waters. We’ll keep
you informed as that process plays out.
Meanwhile, the Board and our General Manager continue
assessing the financial impact of the eventual cessation of all
the gas wells and creating plans to ensure the Ranch continues
to offer the excellent member experiences that draw all of us
to this wonderful place.
Enjoy your springtime at the Ranch! As always, I invite your
questions or comments on these messages.
Respectfully, Ray Karbon
New Members
New members, Gordon and Angela Morse.
Hello to our new friends at Canada Creek Ranch. We are
Gordon and Angela Morse. We recently moved to Oxford,
Michigan from Dearborn where I (Gordon) have been a police
officer for over twenty-six years. I am also Assistant Pastor
of a church in Detroit. I am mere moments away from retiring
from the police department, so we moved to Oxford to be
near our daughter Kaila, son-in-law Matt, and grandchildren
Kasen and Quentin. We also have a German Shepherd named
Worf (he is my K-9 partner) and a Miniature Wookiee named
Chewbacca.
We were introduced to Canada Creek Ranch by our dear
friends (family really) Jeremy and Heather Josephson. We
have been guests for the past nine years and started out by
renting cabins. That was until we decided to get serious and
buy a fifth wheel. We absolutely love our trips up to CCR.
Every time my tires pull onto the property, I can feel stress
just melt away.
Angela and I look forward to meeting you and enjoying all
CCR has to offer!