TorcUP

NewsLetters

Permit Activity last week.  

  • PA – 27; Chevron in Fayette; Chesapeake in Bradford; Chief in Sullivan; and EQT in Washington
  • OH –7; XTO in Belmont; Chesapeake in Carroll

Expo/Industry events for the next few months:

Marcellus-Utica Midstream
Jan. 27-29, 2015
David Lawrence Convention Center
Pittsburgh, PA

Billions are going to spent in Midstream the next couple of years.  Get the latest information to prepare your company for this multi-year opportunity.

To ATTEND, SPONSOR or EXHIBIT, visit www.MarcellusMidstream.com

Visit Shale Directories @ #726

Save the dates for Upstream Seminars

Utica Upstream 2015 – April 8, 2015, Canton, OH

Upstream PA 2015 – April 16, 2015 Penn State

Latest facts and a rumor from the Marcellus and Utica Shale

  • Range hits record level.  A high level report wrapping up stellar results for 2014 was issued by Range Resources yesterday. Among the things Range is justifiably crowing about: Their proved reserves have increased by 26% to 10.3 trillion cubic feet equivalent (Tcfe). In 2014, it cost Range an average of $0.64 per million cubic feet (Mcf) to find and develop their Marcellus Shale acreage–get it ready to drill. And in 2014, it cost them an average $0.55/Mcf to drill and develop their acreage. That’s a combined $1.19 per Mcf cost to Range to find, drill and product, so you can see they’re still making money on dry gas that sells for less than $3/Mcf (plus they’ve hedged, meaning they get even more for their gas than the going spot price).
     
  • Shell lets purchase order for compressors for PA cracker.  It looks like Shell is continuing to move toward the cracker announcement.  (RUMOR)
     
  • Tier one company says Marcellus safest place to be.  This company told employees working in the Marcellus is the best place to be working for the company. (RUMOR)
     
  • Southwestern to locate to Wheeling.  Look for Southwestern to relocate to the Wheeling area and build to meet its needs.
     
  • $400 million Nat Gas to diesel fuel plant coming to NE OH.  A British company hopes to construct a $400 million gas-to-liquids (GTL) project in northeast Ohio that would convert natural gas to diesel fuel.

    Velocys is looking to construct the facility on an 80-acre site in Ashtabula Township. The project initially was proposed by Pinto Energy, which Velocys acquired in an all-stock transaction in June 2014.

    “The facility will convert roughly 42 million cubic feet per day of natural gas to approximately 4,200 barrels per day [BPD] of diesel and wax,” John Baardson, former Pinto Energy CEO and now a member of Velocys management, told SEBB.

    Pinto Energy’s original design for the Ashtabula project called for a roughly 2,800 BPD plant to be built on an 80-acre industrial site that it owned near the Port of Ashtabula.

    The project will have access to abundant low-cost natural gas from the Utica and Marcellus Shale plays, as well as benefitting from substantial existing infrastructure.

    Baardson told SEBB that Velocys is in discussions both with natural gas providers and with diesel fuel off-take companies. “There is a natural gas request for proposals going out in early February to a select group of natural gas suppliers, and off-take discussions are in an advanced stage,” Baardson said.

    Initial engineering for the facility was complete at the time of acquisition. There remains sufficient land at the site for the GTL facility’s capacity to be increased to 10,000 BPD or more, Velocys said at the time of the deal.

    “The start of construction is planned for this summer,” Baardson told SEBB.
     
  • Antero cuts 2015 budget.  Antero Resources says it plans a 2015 capital budget of $1.8B, a 41% reduction from 2014's $3.05B capital budget, with a 2015 drilling and completion budget of $1.6B, down 33% Y/Y.

    AR plans to operate an average of 14 drilling rigs between the Marcellus and Utica Shale plays in 2015, down from 21 at year-end 2014, but forecasts a 40% increase in net daily production to 1.4B cfe/day.

    Antero Midstream Partners (NYSE:AM) plans a 2015 capital budget of $425M-$450M, which includes $250M-$260M on gathering infrastructure in the Marcellus and Utica shale plays.
     
  • Top Eagle Ford producers in 2014.  There are plenty of companies responsible for pushing the Eagle Ford Shale Play over the 1 billion barrel benchmark last year when south Texas averaged roughly 1.6 million barrels a day. However, some businesses are booming over others in the Eagle Ford.  The second most productive shale play in the United States hosts some of the biggest producers in the nation. But who comes out on top?

    According to a recent 24/7 Wall St. report, international oil and gas company EOG Resources Inc. (NYSE: EOG) is the largest oil producer in the Eagle Ford Shale Play. The Houston-based company has a current market capitalization value of $48.97 billion. In 2014, it averaged 170,000 barrels a day in crude oil. But, once you add in natural gas products, EOG clocked in at 220,000 barrels of oil equivalent (boe) a day. In perspective, this is a majority of its 275,000 boe per day production recorded for EOG’s total operation in the entire country.

    Besides production numbers, EOG also holds the largest leased acreage position in the Eagle Ford with a total of 632,000 net acres. Additionally, EOG Resources holds 656 drilling permits in the area. This is over 100 more permits than the number two permit holder, Chesapeake Energy, who has 546 permits in Eagle Ford country.

    Other companies, such as the godfather of the Eagle Ford, BHP Billiton PLC, had substantial numbers to report in the region as well. BHP had 313 drilling permits in the Eagle Ford play and is expected to have a 162,000 boe per day average for last year’s production. ConocoPhillips, Chesapeake Energy and Marathon Oil were the next top spots in Eagle Ford production respectively.
     
  • NAPE cancels Pittsburgh show because of sharp drop in oil prices.
     
  • Rex Energy 2014 update.  State College-based Rex Energy Corp.'s production volumes rose 66 percent in 2014, the company announced Tuesday.

    In an operational update, the company said its production climbed to 154.4 million equivalent cubic feet per day. It also said it has finished drilling its first well in its recently acquired Moraine East area in Butler County.

    The company said it plans to drill 10 to 16 wells in that operating area during 2015. Of those, it intends to complete four to 10, it said.

    In its legacy acreage, the company said it will be placing 11 Marcellus Shale wells into production this quarter. It said its costs to drill a well have come down 5 percent on account of improving efficiencies and better pricing from service providers on account of lower commodities prices.
     
  • Chevron cuts 162 jobs.  Chevron Corp.'s decision to cut 162 jobs from its Appalachian natural gas exploration unit in Moon represents the first major layoffs to hit Marcellus shale operations since prices began falling last year.
     
  • BHP cutting rig count in Eagle Ford. BHP Billiton announced that the mining, metals and petroleum company is expecting to cut U.S. shale operation by 40 percent in the upcoming months.

    In a press release, BHP announced that it will move forward on the plan to reduce their rig count by ten from 26 to 16 by the end of June. However, even with current iron ore, copper and oil market prices unfavorable, BHP Billiton has assured shareholders that it will not reduce dividends. Additionally, BHP is still expecting to increase shale liquids volumes by 50 percent over this period of rig reduction and general cutbacks.
     
  • Kinder buys Bakken pipeline company.  Kinder Morgan Inc. (KMI) has agreed to pay about $3 billion, including debt, to buy a pipeline network from oil billionaire Harold Hamm that will give the company a foothold in the Bakken shale formation.

    The world’s largest pipeline company by market value will buy Hiland Partners from Hamm, the chief executive officer of Bakken producer Continental Resources Inc., and certain Hamm family Trusts, according to a Kinder statement Wednesday.

    The deal is billionaire Richard Kinder’s latest move to dominate shipping of North American oil and natural gas everywhere from the Mexican border to Canada’s Pacific Coast. Kinder in November united his empire into an $89 billion company that controls 80,000 miles (129,000 kilometers) of conduits and 180 terminals, transporting about a third of U.S. gas.
     
  • Baker Hughes closing facility in Massillon, OH.  Rumors are starting to appear that the Baker Hughes facility may be closing.  The layoff of 7,000 workers surely feds this rumor.  (RUMOR)
     
  • Range starts shipping on Mariner East.  Sunoco Logistics' Mariner East propane pipeline was commissioned in late December, according to independent producer Range Resources, earlier than the originally projected first quarter 2015 start-date.

    Range has shipped its 80pc share of the 133,000 bbl of propane line fill the pipeline requires to operate. In its third quarter earnings call, Sunoco said that it anticipated shipping 20,000 b/d of propane on the line by the end of 2014.

    The Mariner East pipeline connects gas processing facilities in the Marcellus shale formation to the Marcus Hook export terminal near Philadelphia, Pennsylvania. The line's initial capacity will be 70,000 b/d of propane, but it will be modified in mid-2015 to run ethane as well. Range resource plans to export ethane to European buyers under a 15-year contract it holds with INEOS.

Rig Count

  • Baker Hughes Rigs count for the week ending Jan 16.

     

  • PA
    • Marcellus 50 rigs – unchanged
    • Utica 1 unchanged
  • Ohio
    • Utica 48 up 1
  • WV
    • Marcellus 25 down 2
  • TX
    • Eagle Ford – 185 down 12
    • Permian Basin – 399 down 15
  • NM
    • Permian Basin – 88 unchanged
  • ND
    • Williston – 156 down 6
  • MT
    • Williston – 9 unchanged
  • CO
    • Niobrara – 49 down 2
       
  • TOTAL U.S. Rig Count 1676 down 74

PA Permits for January 15, to January 22, 2015

       County             Township           E&P Companies

1.    Bradford             Athens               Chesapeake
2.    Bradford             Franklin              Chesapeake
3.    Bradford             Litchfield             Chesapeake
4.    Bradford             Troy                    Chesapeake
5.    Bradford             West Burlington   Chesapeake
6.    Bradford             Wyalusing           Chesapeake
7.    Elk                    Jones                  Hunt Marcellus
8.    Elk                    Jones                  Seneca
9.    Elk                    Ridgway              Hunt Marcellus
10.    Fayette            Luzerne               Chevron
11.    Fayette            Luzerne               Chevron
12.    Fayette            Luzerne               Chevron
13.    Fayette            Redstone             Chevron
14.    Fayette            Redstone             Chevron
15.    Lawrence         North Beaver         Hilcorp
16.    Potter              Sweden                Chesapeake
17.    Sullivan            Elkland                Chief
18.    Sullivan            Elkland                Chief
19.    Sullivan            Elkland                Chief
20.    Sullivan            Elkland                Chief
21.    Susquehanna    New Milford         Southwestern
22.    Tioga                Deerfield             Shell
23.    Washington       Nottingham         EQT
24.    Washington       Nottingham         EQT
25.    Washington       Nottingham         EQT
26.    Washington       Nottingham         EQT
27.    Wyoming           North Branch      Chesapeake

OH Permits – weeks ending January 17, 2015

       County             Township              E&P Companies

1.    Belmont             Richland                XTO
2.    Belmont             Richland                XTO
3.    Belmont             Richland                XTO
4.    Carroll                Washington           Chesapeake
5.    Carroll                Washington           Chesapeake
6.    Carroll                Washington           Chesapeake
7.    Carroll                Washington            Chesapeake

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Joe Barone jbarone@shaledirectories.com 610.764.1232
Vera Anderson vera@shaledirectories.com 570.337.7149

 

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