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NewsLetters

  • Permit Activity.
     
    • PA – 41 permits; permits are spread throughout the state with most being in Bradford and Susquehanna counties
    • OH –29 permits; another big week with Belmont and Harrison receiving the most.
       
  • Expo/Industry events for the next few months:    
     
    • PIOGA’s 2014 Pig Roast July 22 – 23, 2014
       
    • PA Energy Games September 6, 2014
       
    • The Fourth Annual West Virginia Oil & Gas Expo October 1, 2014
       
    • Flash-Fire-Workshop October 8th Pro Football Hall of Fame, Canton, OH
       
    • Shale Gas Symposium, October 8th Agri-Plex Expo Center, Allentown, PA
       
    • Midstream PA 2014, November 18TH, Penn State

      http://www.shaledirectories.com/site/oil-and-gas-expo-information.html

Latest facts and a rumor from the Marcellus and Utica Shale

  • EQT drilling in the Upper Devonian.  EQT is drilling on a pad in Washington County, PA which will have 23 wells on it with six of them drilling into the Upper Devonian. (RUMOR)
     
  • Aubrey moves into midstream.  Shale pioneer Aubrey McClendon is continuing to pile onto his heap of affiliated unconventionals-focused enterprises with the formation of a midstream company that will service several basins where American Energy Partners has established operations.

    The latest piece to McClendon’s sprawling empire, dubbed American Energy – Midstream, was announced just under two weeks after Upstream revealed the plans of American Energy Partners to buy assets in the Appalachian basin from private players East Resources and HG Energy, and in the Permian basin from Enduring Resources.

    American Energy later confirmed the planned purchases, unveiling a price tag of $4.25 billion.

    The midstream company announced on Wednesday it will focus primarily in those areas where McClendon-led companies have active upstream activities.

    Its portfolio will consist of midstream assets “strategically focused” on natural gas gathering and processing systems and long-haul pipelines, specifically in the Utica and Marcellus shales, the Woodford shale and the Permian basin.

    Energy & Minerals Group is the lead equity investor in each affiliate.

    McClendon has raised $10 billion in less than a year to fund a suite of companies active in shale plays around the US.
     
  • Five important facts about the Utica.  The June 14, 2014 Utica Shale Activity Report released by the Ohio DNR today is reporting how much things have changed vs. last year and where things are heading. Let's have a look.
  1. Of the 153 wells classified as "drilling" in the June 14, 2014 report, only 3 wells are situated north of downtown Canton. 

    At about 7 million/well, current drilling activity alone accounts for a current bet of approximately one billion dollars on the Utica Shale.

    As a comparison, on June 15, 2013, only 12 wells were classified as "drilling".
     
  2. Just six counties: Belmont, Carroll, Guernsey, Harrison, Monroe, and Noble account for 149 of the 153 wells currently drilling. These counties lie mostly to South.
     
  3. Wells classified as "drilled" and waiting for production stands at 284. Some of those wells are in a "resting period" and soon will be producing. Other wells are awaiting infrastructure, and still more are not being put into production for other reasons (more favorable economics, etc).
     
  4. 467 wells are classified as "producing" 254 of those, or 54%, lie in two counties, Carroll and Columbiana. Given the shift in activity to the south, this percentage will go down over time as Southern wells come online.
     
  5. Of the 69 new permits issued June 1-14, 2014, only 1 new permit is north of downtown Canton


And looking at all permits issued from January 1, 2014 through June 14, 2014. The map below tells it all. The future activity is south.

  • Permian Basin’s Cline Shale could be big.  An updated study estimates the oil and gas industry in a slice of West Texas could have a $20 billion economic impact and support more than 30,000 jobs by 2022.

    The Permian Basin in West Texas has a multitude of overlapping oil fields, but the emerging Cline Shale on the northeastern edge has created a stir.

    The University of Texas at San Antonio report considers the Cline Shale region as well as other counties nearby where the more established Wolfberry/Spraberry and Wolfcamp reservoirs are present.

    UTSA estimates the economic impact of the industry could be anywhere from $7.5 billion on the low end to $34 billion under intense development. UTSA’s Institute for Economic Development considers $20 billion to be a moderate projection.

    The study focuses on 10 of the Permian Basin’s 39 counties: Fisher, Glasscock, Howard, Irion, Martin, Mitchell, Nolan, Reagan, Scurry and Sterling counties. It also includes a secondary study of five Permian Basin counties that surround those 10: Brown, Coke, Coleman, Runnels, Taylor and Tom Green.
     
  • Bakken producing 1 million barrels a day.  North Dakota is now producing 1 million barrels of oil per day, with a large part of the credit due to the rich Bakken shale formation in the western part of the state.

    The state’s Department of Mineral Resources on Tuesday released the April production numbers that show the oil fields’ record level. In March, the state produced 977,000 barrels per day.

    The director of the department, Lynn Helms, says only Texas, Alaska and California have also reached a million-barrel-a-day production.
     
  • Carrizo’s 2nd rig arrives in the Utica.  The spudder rig has arrived on the location of Carrizo's second Utica Shale well; the Brown 1H in Guernsey County, OH, and drilling is expected to begin shortly. The Company currently plans to drill the top hole with the spudder rig and bring in a larger rig to drill the horizontal section next month. The Company plans to drill the well with an effective lateral of 6,280 ft. and complete it with 26 frac stages. Carrizo operates the Brown 1H well with a 50% working interest. Carrizo currently plans to keep both the spudder and larger rig active for the remainder of the year.
     
  • Gastar getting good results in the Utica in WV.  Gastar Exploration reported today that it has reached total depth on the vertical pilot hole for its first Utica/Point Pleasant well in Marshall County, West Virginia. The Simms 5-UH well was drilled to a total depth of 11,410 feet and encountered approximately 92 net feet of pay in the Point Pleasant formation with measured porosities up to 17%. Gastar expects estimated formation pressures to be approximately 9,400 psi upon completion of the well.

    Gastar is currently plugging back the well in order to drill a 4,200 foot horizontal section in the Point Pleasant formation. After drilling the lateral, a 23-stage completion is planned followed by a three week "soaking" of the well with first production expected in late August 2014.

    Gastar's President and CEO, J. Russell Porter, commented, "These results have confirmed our expectations regarding the Utica/Point Pleasant formation. As a result of this information, and the Utica/Point Pleasant results reported by other nearby operators, we are planning to move forward with a program that should rapidly de-risk this asset and add substantial net asset value to Gastar."
     
  • Magnum could have the most productive well in the Utica.  Magnum Hunter Resources Corp thinks it could soon take the throne as owner of the most productive well in the Utica shale play. Magnum Hunter’s well is only the second in the Utica shale in West Virginia drilled the first in Marshall County earlier this year). It’s located on the Steward-Winland pad in Tyler County, just east of Marietta. “We think this well is on the equivalent of (Rice Energy Inc.’s Bigfoot 9H) well,” Gary Evans, Magnum Hunter’s CEO, told CNBC host Jim Cramer June 2. “We’ll be fracking that well over the next 30 to 45 days.”
     
  • Eclipse raises $900 million. Eclipse Resources launched its initial public offering of 30.3 million shares of common stock at a price between $27-$30/share, and worth up to $909 million, according to the E&P Company’s SEC filing.

    The company is offering 21.5 million shares of its common stock, while selling stockholders, including private equity, limited partnerships and individuals, are offering 8.8 million shares of common stock.

    Look for most of these funds to go into drilling in the next couple.  Antero’s and Rice’s IPO’s have led to greater drilling activity by these two companies.
     
  • Williams gets bigger.  Pipeline giant Williams, has acquired Access Midstream Partners, the former Chesapeake Energy midstream unit, for a reported $5.99 billion.

    Williams acquired roughly 33% of Access Midstream, and 50% of its general partner. In 2012, Williams bought about 25% of Tulsa, Oklahoma-based Access and half of its general partner.

    Access has a market capitalization of about $13.2 billion.
     
  • Range boosting E&P budget.  Even as many energy producers continue to focus primarily on oil, some are aggressively ramping up gas-drilling activity. Range Resources, for instance, plans to boost its capital budget for the year by $220 million to $1.52 million, as the Fort Worth, Texas-based gas producer seeks to capitalize on high gas prices and its massive inventory of high-margin drilling opportunities in the Marcellus shale. Let's take a closer look at whether or not it's a smart move.


Rig Count

  • Baker Hughes Rigs count for the June13th reporting week.  
     
    • PA
      • Marcellus 57 rigs – up 2
      • Utica 2 rigs – unchanged  
         
    • Ohio
      • Utica 38 – down 1
         
    • WV
      • Marcellus 26 – up 1
         
    • TX
      • Eagle Ford – 231 down 1
      • Permian Basin – 470 up 3
         
    • NM
      • Permian Basin – 86 up 5
         
    • ND
      • Williston – 169 unchanged
         
    • MT
      • Williston – 5 down 4
         
    • CO
      • Niobrara – 53 unchanged

TOTAL U.S. Rig Count 1854 down 6

PA Permits for June 12 to June 19, 2014

       County                  Township                E&P Company
1.    Bradford                 LeRaysville Boro     Chesapeake
2.    Bradford                 Orwell                   Southwestern
3.    Bradford                 Orwell                   Southwestern
4.    Bradford                 Orwell                   Southwestern
5.    Bradford                 Overton                 Chief
6.    Bradford                 Overton                 Chief
7.    Bradford                 Overton                 Chief
8.    Bradford                 Overton                 Chief
9.    Bradford                 Overton                 Chief
10.    Bradford                Wilmont               Chesapeake
11.    Butler                    Mercer                 Shell
12.    Elk                       Jones                   Hunt Marcellus
13.    Greene                 Center                  CONSOL
14.    Greene                 Center                  Vantage
15.    Greene                 Center                  Vantage
16.    Greene                 Franklin                Vantage
17.    Greene                 Franklin                Vantage
18.    Lycoming             Eldred                   Inflection
19.    Lycoming             Lewis                    Range
20.    Lycoming             Lewis                    Range
21.    Lycoming             Upper Fairfield        Inflection
22.    McKean               Norwich                 Seneca
23.    Mercer                 Shenango              Hilcorp
24.    Sullivan                Fox                       Chief
25.    Sullivan                Fox                       Chief
26.    Sullivan                Fox                       Chief
27.    Susquehanna       Auburn                  Chesapeake
28.    Susquehanna       Lathrop                  Chief
29.    Susquehanna       Lathrop                  Chief
30.    Susquehanna       Lathrop                  Chief
31.    Susquehanna       Lathrop                  Chief
32.    Susquehanna       New Milford            Southwestern
33.    Susquehanna       New Milford            Southwestern
34.    Susquehanna       New Milford            Southwestern
35.    Susquehanna       New Milford            Southwestern
36.    Washington         Amwell                   Rice
37.    Washington         Buffalo                    Range
38.    Washington         Buffalo                    Range
39.    Washington         Canton                    Range
40.    Wyoming            Meshoppen              Chesapeake
41.    Wyoming            Meshoppen              Chesapeake    


OH Permits – week ending June 14, 2014

        County                 Township             E&P Companies

1.    Belmont                  Washington          XTO
2.    Belmont                  Washington          XTO
3.    Belmont                  Washington          XTO
4.    Belmont                  Washington          XTO
5.    Belmont                  Wayne                Gulfport
6.    Belmont                  Wayne                Gulfport
7.    Belmont                  Wayne                Gulfport
8.    Belmont                  Wayne                Gulfport
9.    Belmont                  Wayne                Gulfport
10.    Belmont                Wayne                Gulfport
11.    Carroll                   Union                  Chesapeake
12.    Carroll                   Union                  Chesapeake
13.    Carroll                   Union                  Chesapeake
14.    Carroll                   East                   Chesapeake
15.    Geauga                 Parkman             Chesapeake
16.    Guernsey              Londonderry         AEP
17.    Guernsey              Wills                   PDC
18.    Guernsey              Londonderry         AEP
19.    Guernsey              Londonderry         AEP
20.    Harrison                Moorefield            Gulfport
21.    Harrison                Moorefield            Gulfport
22.    Harrison                German               Chesapeake
23.    Harrison                German               Chesapeake
24.    Harrison                Cadiz                  Hess
25.    Harrison                Cadiz                  Hess
26.    Harrison                Cadiz                  Hess
27.    Monroe                Sunsbury             Gulfport
28.    Monroe                Sunsbury             Gulfport
29.    Monroe                Sunsbury             Gulfport


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