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  • Permit Activity.  
    • PA –26 permits in 11 counties to 13 different E&P companies
    • OH –27 permits; Chesapeake and Gulfport leading the permitting activity
  • 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

Latest facts and a rumor from the Marcellus and Utica Shale

  • Chesapeake spins off operating companies.  Seventy Seven Energy Inc. previously operating as Chesapeake Oilfield Operating, L.L.C., announced the completion of its spin-off from Chesapeake Energy Corporation into a stand-alone, publicly traded oilfield services business.

    Jerry L. Winchester and Cary D. Baetz remain as Chief Executive Officer and Chief Financial Officer, respectively, of SSE. Karl Blanchard has been appointed the Chief Operating Officer of SSE.

    My hypothesis spin off is that first, it definitely makes sense for Chesapeake as it continues to shed costs, but more importantly, Seventy Seven Energy will be doing considerable work for Aubrey McClendon’s American Energy Partners.  If AEP brings in as many rigs as is rumored, it will have a difficult time finding service companies for all the rigs.  After all, most of the employees at Seventy Seven used to work for Aubrey.

    Seventy Seven Energy will quickly expand its services to the other E&P companies besides AEP.

    I strongly recommend that you find out where Seventy Seven Energy’s offices are in Canton, OH and get into to see them
  • Texas overtaking Iraq.  According to a recent US Energy Information Administration (EIA) report, oil production in Texas topped three million barrels per day in April thanks to fracking, while OPEC favorite Iraq’s oil production was 3.2 million barrels per day in April and 2.9 in June, because of the violence in the country.

    Based on this, it can be estimated that Texas will be producing more oil than Iraq very soon, while the US as a whole is expected to become the world’s largest oil producer by 2015, surpassing Russia and Saudi Arabia.
  • Shell creates motor oil from nat gas.  New PurePlus™ Technology results in base oils developed using 40 years of Shell natural-gas-to-liquids innovation.

    Shell announced today the creation of the first-of-its kind base oil made from natural gas, the cleanest burning fossil fuel. It is called Shell PurePlus(TM) Technology, a patented process of converting natural gas into a clear base oil, which is the main component of motor oils.

    Shell PurePlus Technology is now being used to create motor oils that offer complete protection to motorists in the United States. Pennzoil Platinum® and Pennzoil Ultra® Platinum Full Synthetic motor oils are the only ones blended exclusively with these base oils.
  • Marcellus and Utica projects continue to grow.   The consulting service ICF International said in its Second-Quarter 2014 Detailed Production Report that total daily production from gas wells in the Marcellus and Utica regions are now expected to reach 34 billion cubic feet (Bcf) per day by 2035, up from 25 Bcf this quarter. The report says this is partially due to the Utica’s deposits being much richer than initially anticipated. It also mentions advances in hydraulic fracturing technology, which make recovery of more gas possible.

    ICF experts also project more well completions because of improvements in the number of wells drilled per rig. The number of gas well completions is projected to average about 2,050 wells per year in Marcellus compared to 1,750 wells per year in the last quarter Report and 500 wells per year in Utica compared to 395 wells per year in last quarter’s Report.
  • Apex Energy getting active in Armstrong County, PA. As part of its push into Southwestern Pennsylvania, a Marcellus shale-drilling company is considering as many as eight projects in Penn Township, municipal and company officials said.

    Representatives of Apex Energy, which received state permits this year to drill in three Armstrong County locations, have met with officials in Penn Township and Murrysville as they evaluate several potential drilling sites in the region.

    Leasing agents working on behalf of the Pine Township-based company have been talking to people in Penn Township and Murrysville about obtaining mineral rights.
  • Ergon adding capacity.  Ergon plans to start up 10,000 barrels per day of condensate stabilization capacity at its Marietta, Ohio, river terminal. Startup of this capacity is anticipated for the fourth quarter of 2014 and will result in lower vapor pressure condensate for ultimate marketing. Additionally, Ergon plans to add 10,000 barrels per day of condensate stabilization in Newell, West Virginia, in 2015. Furthermore, Ergon plans to install new capacity at its 23,000 barrels per day specialty refinery in 2016.
  • GreenHunter midstream deal.  GreenHunter Resources, Inc., a diversified water resource, waste management, environmental services, and hydrocarbon marketing company specializing in the unconventional oil and natural gas shale resource plays, announced today that through its wholly-owned subsidiary, GreenHunter Pipeline LLC, it has executed multiple definitive agreements to have exclusive use of three independent pipelines. This new project covers approximately 34 miles of right-of-way to transport freshwater, oilfield waste water (brine), and hydrocarbons (oil, condensate and NGLs). The Points of Receipt (POR) have been strategically chosen in two locations in southwestern Pennsylvania and northwestern West Virginia. These regions have quickly become some of the most densely populated areas for new permitting, drilling, and producing in the Marcellus Shale Play and the evolving Utica Shale Play. The Point of Delivery (POD) will be along the Ohio River at one of GreenHunter's barge terminal locations. GreenHunter Pipeline will own and operate the POR and the POD facilities and associated equipment. Our equity partner, Major Pipeline LLC, will design, build, own, and operate the pipeline exclusively for GreenHunter's benefit.

    The agreement between GreenHunter Pipeline LLC and Major Pipeline LLC provides exclusive use for transportation of the above mentioned fluids for a period of 10 years with an option to renew the contracts for an additional 10 years. The terms of the agreements are specific to each type of fluid and priced on minimum volumes of fluid intake per day. The brine pipeline will be constructed of 12" diameter pipe capable of transporting approximately 100,000 bbls per day. The freshwater pipeline will be a 16" diameter pipe with the capacity to handle approximately 140,000 bbls per day. The condensate pipeline will be a 6" diameter pipe that will have a capacity of approximately 30,000 bbls per day. The first phase of the project has begun with right-of-way negotiations underway and is scheduled to be complete and 100% operational by January 1, 2016.

    The pipeline destination will also include a processing facility to split condensates into different quality products, typically resulting in higher value for these finished materials for ultimate marketing. The new processing plant for condensate is scheduled to be completed on or before the third quarter of 2016.
  • Marcellus Production up in July.  Both oil and gas production activity in the Marcellus Shale are expected to rise in July, according to a report by the U.S. Energy Information Administration.

    Oil production in June was listed at 42,000 barrels per day and is expected to rise 1 percent to 43,000 barrels; the EIA’s drilling productivity report said.

Rig Count

  • Baker Hughes Rigs count for the June27th reporting week.  
    • PA
      • Marcellus 57 rigs – up 2
      • Utica 2 rigs – unchanged    
    • Ohio
      • Utica 41 – up 1
    • WV
      • Marcellus 25 – unchanged
    • TX
      • Eagle Ford – 214 down 1
      • Permian Basin – 469 up 1
    • NM
      • Permian Basin – 85 unchanged
    • ND
      • Williston – 171 up 1
    • MT
      • Williston – 7 up 2

    • CO
      • Niobrara – 55 unchanged

TOTAL U.S. Rig Count 1873 up 15

PA Permits for June 26 to July 3, 2014

      County                 Township               E&P Company
1.    Bradford               Albany                    Chesapeake
2.    Bradford                Asylum                  Chesapeake
3.    Bradford                Ulster                     Chesapeake
4.    Bradford                Wyalusing              Chesapeake
5.    Lycoming               Gamble                 Atlas
6.    Lycoming               Gamble                 Atlas
7.    Lycoming               Gamble                 Atlas
8.    Lycoming               Gamble                 Atlas
9.    Lycoming               Gamble                 Atlas
10.    Lycoming              Gamble                Atlas
11.    McKean                 Norwich               Seneca
12.    McKean                 Norwich               Seneca
13.    McKean                 Norwich               Seneca
14.    McKean                 Norwich               Seneca
15.    McKean                 Sergeant             Seneca
16.    Sullivan                  Cherry                 Chesapeake
17.    Sullivan                   Fox                    Chief
18.    Susquehanna          Hart                    Cabot
19.    Susquehanna          Hart                    Cabot
20.    Susquehanna          Hart                    Cabot
21.    Susquehanna          Hart                    Cabot
22.    Susquehanna          Hart                    Cabot
23.    Susquehanna          Hart                    Cabot
24.    Susquehanna          Hart                    Cabot
25.    Susquehanna          Rush                   Chesapeake
26.    Washington            North Strabene     Range
27.    Washington            North Strabene     Range
28.    Washington            South Strabene     Range

OH Permits – week ending June 28, 2014

       County             Township              E&P Companies

1.    Belmont             York                    XTO
2.    Belmont             York                    XTO
3.    Belmont             York                    XTO
4.    Belmont             York                    XTO
5.    Carroll                East                    Chesapeake
6.    Carroll                Lee                     Chesapeake
7.    Carroll                Lee                     Chesapeake
8.    Carroll                Lee                     Chesapeake
9.    Carroll                Lee                     Chesapeake
10.    Carroll              Lee                     Chesapeake
11.    Guernsey          Wills                   PDC Energy
12.    Guernsey          Wills                   PDC Energy
13.    Guernsey          Wills                   PDC Energy
14.    Guernsey          Richland              Carrizo
15.    Guernsey          Richland              Carrizo
16.    Guernsey          Richland              Carrizo
17.    Guernsey          Richland              Carrizo
18.    Guernsey          Richland              Carrizo
19.    Guernsey          Richland              Carrizo
20.    Noble                Beaver                Antero
21.    Noble                Beaver                Antero
22.    Noble                Beaver                Antero
23.    Noble                Beaver                Antero

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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