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  • Permit Activity.  
    • PA – 25 permits; Greene and Susquehanna dominate permitting this month with 10 different companies receiving permits
    • OH –31 permits; Monroe and Noble have over 20 permits with going all to Gulfport and Antero.
  • Expo/Industry events for the next few months:
    • Northern Tier Marcellus Shale Expo June 18, Mansfield, PA
      • The Northern Tier Marcellus Shale Business to Business Expo will be held on June 18th at Mansfield University!
      • Register your business today at

Latest facts and a rumor from the Marcellus and Utica Shale

  • Aubrey did not wait long to do a deal.  CEO Aubrey McClendon agreed to buy shale acreage in the Marcellus and Utica shale plays for a total of nearly $2 billion.

    American Energy also said it would enter Texas’s Permian Basin by acquiring about 63,000 net acres of production leases from Enduring Resources LLC for $2.5 billion.

    American Energy — Utica LLC (AEU), an affiliate of American Energy Partners LP, said it has signed agreements to buy about 27,000 net acres in Monroe County, Ohio, from East Resources Inc. and an unnamed private company.

    The properties are expected to have net production of about 40 million cubic feet of natural gas equivalent per day, according to a news release from Oklahoma City-based American Energy — Utica.

    In addition, a separate American Energy Partners platform company, American Energy — Marcellus LLC, said it has signed agreements to acquire about 48,000 net acres in Doddridge, Harrison, Marion, Tyler and Wetzel Counties, W.Va., also from East Resources and an unnamed private company. Those properties are expected to have net production of approximately 135 million cubic feet per day.

    The combined acquisition price of the transactions is $1.75 billion, and both deals are expected to close in the next 60 days. The sellers are currently using two rigs to develop the acreage being acquired, according to the news release. American Energy — Utica and American Energy — Marcellus plan to increase operated drilling activity to four to six rigs by the end of 2015, American Energy Partners said in the release.

    The company said the Utica acquisition marks American Energy — Utica’s seventh major acquisition in the southern Utica shale play “and boosts AEU's leasehold in the play to approximately 280,000 net acres, the largest leasehold position in this rapidly developing and prolific play.” American Energy — Utica said it has invested more than $3.5 billion in the Utica to date and plans to drill about 2,600 gross wells and 1,600 net wells on its acreage.

    The Marcellus acquisition marks American Energy — Marcellus’ entry into the southern Marcellus shale play “and establishes a strong foundation from which it plans to build a more significant leasehold position in the area over time,” the company said. American Energy — Marcellus plans to drill about 410 gross wells and 355 net wells on its acreage.
  • Shell cracker getting closer.  The prospects of Royal Dutch Shell constructing a multibillion-dollar ethane cracker plant just 40 miles from here in Beaver County, Pa., appear brighter after an executive at Shell Chemicals announced the producer has signed third-party contracts related to the project.

    ICIS, which describes itself as the world’s largest petrochemical market information provider, reported Thursday that Shell Executive Vice President Graham Van Hoff said his company has signed 10 third-party contracts and has filed an air quality permit with the commonwealth of Pennsylvania.
  • Chesapeake spins off business units.  Chesapeake Energy said its board has approved the previously announced plan to spin off its oilfield services business into a separate, publicly traded company.

    The new company will be called Seventy Seven Energy.

    Chesapeake shareholders will receive one share of Seventy Seven Energy for every 14 shares of Chesapeake stock they own, as of June 19.

    No fractional shares of Seventy Seven Energy will be issued. Instead shareholders entitled to one will receive cash instead. The distribution is expected to happen June 30, after the market closes.

    Seventy Seven Energy will trade on the New York Stock Exchange under the symbol “SSE.” Trading is expected to begin July 1.

    Seventy Seven Energy, based in Oklahoma City, provides drilling, hydraulic fracturing, oilfield rentals and other services to oil and gas producers.
  • EQT building pipeline to SE U.S.  EQT and a Florida company NextEra Energy launched a non-binding open season for drillers that want to reserve capacity on the Mountain Valley Pipeline project, which will connect Marcellus and Utica natural gas to markets in the southeastern U.S.

    EQT and Juno Beach, Fla.-based NextEra also said on Thursday that they signed a letter of intent to form a joint venture to build and own the Mountain Valley Pipeline. EQT is expected to operate the pipeline and own a majority interest in the joint venture.

    The 330-mile Mountain Valley Pipeline project will extend the Equitrans transmission system from Wetzel County, W.Va., and travel south to its expected primary delivery point, Transcontinental Gas Pipeline Co.’s (Transco) Zone 5 compressor station 165 in Pittsylvania County, Va., according to EQT.

Notes from DUG East

  • Consol Energy
    Consol Energy will begin drilling its 9,000-acre leasehold around the Pittsburgh airport in August. The company plans to drill 8,000 feet laterals on the wells and expects production to start flowing from the airport acreage in early 2015.

    It has also developed a partnership in the Marcellus shale with Noble Energy. The company has 446,000 acres leased in the Marcellus shale and Noble Energy has eight rigs drilling. The company said it plans to drill 182 Marcellus shale wells in 2014.

    They are also involved in a partnership in the Utica shale with the Hess Corporation. The company plans to build both Marcellus shale and Utica shale wells on the same pad in Monroe County.

    Consol plans to drill 32 wells with Hess in Noble, Belmont, Guernsey and Harrison counties. In addition, Consol plans to invest $24 million outside of the joint venture with Hess, outside of Monroe County.

    Tim Dugan, chief operating officer for Consol, said 20 percent of this year’s budget is geared toward gaining acreage.

    He said there is an average of six wells on a pad, but he thinks it could grow to 18 wells on a pad using the stacked formation, which means they would drill through Upper Devonian, Marcellus shale and Utica shale.
  • Range Resources
    Jeff Ventura, of Range Resources, said not only are they the first company to discover what was in the Marcellus, but the company will also the first to export ethane to Europe.

    Range Resources has over 1 million acres leased in Pennsylvania, and are producing 1.8 Bcf/d (billion cubic feet per day) of wet gas currently.

    Range also discussed that it now measuring its acreage as “stacked shale plays.”  This is explained as underneath one well pad Range is being able to drill in the Marcellus, Utica and Upper Devonian.  Range now reports its leased acreage as 1.9 million acres instead of 1 million acres.
  • Gulfport Energy
    Gulfport Energy is under new leadership in 2014. Stuart Maier, vice president, geosciences at Gulfport Energy, said the company is working to find the optimal way to develop the Utica shale play, including developing what it has already drilled, and determining what those wells are capable of producing.
    In addition, the company is awaiting infrastructure, including pipelines, to move the gas to the market in the Utica shale. Gulfport Energy has 179,000 acres leased and has seven drilling rigs in operation.
  • Rice Energy
    Rice Energy started leasing acreage in 2009 in Washington, Pennsylvania. The company now has 21,000 acres in the Marcellus shale in Washington and Greene counties.

    Daniel J. Rice IV, chief executive officer, said the company is more interested in chasing the rate of return from wells, not the commodity prices. He added the volumes being produced, along with faster drill speeds and longer laterals, make up for what the company is getting for the oil and gas products in the market place.

    The company now has a total of 90,000 acres in Pennsylvania and Ohio. They created a landowners group in Belmont County and now have strong leasehold of 30,000 acres in the middle of the county, where they drilled the “Big Foot” well.

    They also have a joint agreement for drilling with Gulfport Energy in Belmont County.
  • Stone Energy
    Stone Energy is currently a Marcellus shale driller with most of its acreage in West Virginia. Now, the company is trying to getting to the Utica Shale, and currently has 28,500 acres leased in the Utica shale.

    They are drilling in the area around Mary Field, West Virginia.  David Welch, Stone Energy CEO, said they expect to have a test well completed in the second quarter of 2014. It is currently being drilled and the company expects to test it later this year.

Rig Count

  • Baker Hughes Rigs count for the June 6th reporting week.  
    • PA
      • Marcellus 55 rigs – down 3
        Utica 2 rigs – unchanged    
    • Ohio
      • Utica 39 – up 1
    • WV
      • Marcellus 25 – unchanged
    • TX
      • Eagle Ford – 214 up 1
      • Permian Basin – 467 down 2
    • NM
      • Permian Basin – 80 down 1
    • ND
      • Williston – 169 up 4
    • MT
      • Williston – 9 unchanged
    • CO
      • Niobrara – 53 down 1

TOTAL U.S. Rig Count 1860 down 6


PA Permits for June 5 to June 12, 2014

       County                 Township              E&P Company
1.    Allegheny              Fawn                      Range
2.    Armstrong             Sugarcreek             Apex Energy
3.    Bradford                Orwell                    Southwestern
4.    Bradford                Orwell                    Southwestern
5.    Bradford                Wyalusing              Chesapeake
6.    Greene                  Aleppo                   Chesapeake
7.    Greene                  Center                   Alpha Shale Res.
8.    Greene                  Jefferson                Vantage
9.    Greene                  Morgan                  EQT
10.    Greene                Richhill                  CONSOL
11.    Greene                Richhill                  CONSOL
12.    Greene                Richhill                  CONSOL
13.    Greene                Richhill                  CONSOL
14.    Greene                Richhill                  CONSOL
15.    Mercer                Shenango              Hilcorp
16.    Susquehanna      Auburn                   Chief
17.    Susquehanna      Liberty                   WPX
18.    Susquehanna      Middletown             Cabot
19.    Susquehanna      Middletown             Cabot
20.    Susquehanna      Middletown             Cabot
21.    Susquehanna      New Milford             Southwestern
22.    Susquehanna      New Milford             Southwestern
23.    Susquehanna      New Milford             Southwestern
24.    Wyoming            Mehoopany             Chesapeake
25.    Wyoming            Windham                Chesapeake

OH Permits – week ending June 7, 2014

       County              Township            E&P Companies

1.    Belmont             Richland              XTO
2.    Belmont             Somerset            Gulfport
3.    Belmont             Richland              XTO
4.    Carroll                Fox                    Chesapeake
5.    Carroll                Fox                    Chesapeake
6.    Guernsey            Londonderry       Carrizo
7.    Harrison              Stock                 Eclipse
8.    Harrison              Stock                 Eclipse
9.    Jefferson             Salem                Chesapeake
10.    Monroe             Center                Gulfport
11.    Monroe             Center                Gulfport
12.    Monroe             Sunbury             Gulfport
13.    Monroe             Sunbury             Gulfport
14.    Monroe             Sunbury             Gulfport
15.    Monroe             Sunbury             Gulfport
16.    Monroe             Sunbury             Gulfport
17.    Noble               Seneca               Antero
18.    Noble               Beaver                Antero
19.    Noble               Beaver                Antero
20.    Noble               Beaver                Antero
21.    Noble               Beaver                Antero
22.    Noble               Beaver                Antero
23.    Noble               Beaver                Antero
24.    Noble               Beaver                Antero
25.    Noble               Beaver                Antero
26.    Noble               Beaver                Antero
27.    Noble               Beaver                Antero
28.    Noble               Beaver                Antero
29.    Noble               Beaver                Antero
30.    Tuscarawas      Clay                   Enervest
31.    Washington      Salem                EM Energy

Take advantage of the bullish outlook and become a member in

Joe Barone 610.764.1232
Vera Anderson 570.337.7149
Andrea Bagnell 610.256.1898


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