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NewsLetters

  • Permit Activity.  
    • PA –1 permit; a slow July 4th week
    • OH –1 permit:
  • 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#ex8

Latest facts and a rumor from the Marcellus and Utica Shale

  • Rice Energy announced that it has signed a definitive purchase and sale agreement to acquire approximately 22,000 net acres and 12 developed Marcellus wells in western Greene County, Pennsylvania, from Chesapeake Appalachia, LLC and its partners for approximately $336 million. We expect to close the transaction in August 2014, subject to customary closing conditions, with an effective date of February 1, 2014.
     

Acquisition Highlights:

  • Approximately 22,000 net acres (100% operated, average 95% working interest), representing a 24% increase in our net acreage position as of March 31, 2014
     
  • Approximately 152 net risked locations, representing a 47% increase to our Marcellus inventory of 325 net risked locations as of March 31, 2014
     
  • Current net production of approximately 20 MMcf/d from 7 wells, plus 5 additional wells in various stages of development

 

  • Major midstream update (Thanks, Dave Messersmith) Previous increases in takeaway capacity out of the Appalachian basin were largely upgrades and expansions of existing transmission lines.

    However, as more takeaway capacity is needed, midstream operators are turning to ‘greenfield’ projects (new pipeline construction) to deliver natural gas to new, high demand markets throughout the eastern United States.

    The following is a sampling of natural gas transmission projects that have been proposed or are under regulatory review in and around Pennsylvania.

    The focus is on projects that contain a significant amount of greenfield pipeline rather than upgrades or expansion of existing pipelines:

    Atlantic Sunrise Expansion (Williams)

    The Atlantic Sunrise Expansion includes 178 miles of new greenfield pipe in Pennsylvania divided into two sections – Central Penn North (Susquehanna, Wyoming, Luzerne and Columbia counties) and Central Penn South (Columbia, Schuylkill, Lebanon and Lancaster counties).

    The Atlantic Sunrise also includes two pipeline loops, totaling 12 miles in Pennsylvania and additional pipeline and compression upgrades in four other states (Maryland, Virginia, North Carolina, and South Carolina).

    The project will add 1.7 Bcf/day of takeaway capacity out of the northeastern Marcellus area when it comes online in the second half of 2017 (anticipated).

    Constitution Pipeline (Williams)

    The 124-mile Constitution Pipeline is proposed to extend from Susquehanna County to Schoharie County, NY. The proposed route would be generally along the I88 corridor through Upstate New York.

    The project would have a capacity of 0.65 Bcf/day to meet incremental demand in New England and the greater northeastern United States.

    The Federal Energy Regulatory Commission (FERC) issued a draft environmental impact statement for the proposed project in February.

    Williams has a target in-service date of late 2015 to 2016 and has partnered with Cabot Oil & Gas, Piedmont Natural Gas and WGL Holdings to develop the project.

    Marcellus to North Carolina Proposal (Spectra Energy)

    While not yet officially named, Spectra Energy has proposed a new 427-mile pipeline from Bedford County through Maryland, West Virginia and Virginia, ending near Fayetteville, NC.

    The $4.0 billion, 1.1 Bcf/day project is a response to a Duke Energy/Piedmont Natural Gas request for proposals to bring natural gas to its customers in the Southeast. Spectra has indicated a tentative in-service date of late 2018.

    Northeast Energy Direct (NED) Project (Kinder Morgan)

    Tennessee Gas Pipeline Company, a subsidiary of Kinder Morgan, is proposing the Northeast Energy Direct Project from Troy through Upstate New York into Massachusetts to meet growing demand in the New England.

    The project includes 246 miles of greenfield pipe, plus an additional 100 miles of looping on existing lines and compression upgrades. Capacity could be as much as 2.2 Bcf/day pending interest from customers in New England and eastern Canada.

    The proposed project is estimated to be placed in service by November of 2018.

    Southern Reliability Project (Dominion)

    Dominion has proposed building a 450-mile pipeline to bring natural gas from the Appalachian Basin to markets in Virginia and North Carolina.

    The proposed $2 billion project would run from a Dominion Transmission pipeline in Harrison County, W. Va. through Virginia to Lumberton, NC. Construction would likely begin in 2017 with an expected in-service date of late 2018.
     
  • Vantage doing an IPO.  The Colorado company that is one of the largest natural gas producers in southwestern Pennsylvania is the latest E&P company to file paperwork to go public.

    Vantage Energy filed a registration statement with the U.S. Securities and Exchange Commission for a $400 million initial public offering. Vantage is based in Englewood, Colo., but has extensive operations in Greene County, PA. No pricing has been released for the IPO but Vantage plans to trade on the New York Stock Exchange with the ticker symbol VEI.

    Vantage is No. 12 on the 2014 Pittsburgh Business Times Book of Lists of biggest natural gas companies operating in southwestern Pennsylvania. A little less than half of its net acreage is in the Marcellus Shale and in Greene County, 51,771 net acres compared to 38,347 net acres in the Barnett Shale in Texas.

    Vantage has two bottom-hole rigs in the Marcellus and two in the Barnett with plans to continue with those rigs through at least the end of the year, according to Vantage's SEC filing. The firm has 49 horizontal wells in the Marcellus Shale with 18 in production. It has seen a jump in production from 1.9 million cubic feet per day in December 2011 to 30.3 million cubic feet per day in March 2014. It plans to drill 21 wells in 2014.

    Vantage has identified 1,074 drilling locations, 423 in the Marcellus Shale and 312 in the Upper Devonian, with the rest in the Barnett Shale.\
     
  • Top producing wells in ODNR’s 1st Qtr. Report (Thanks, Jim Wills) That information was released last week by the Ohio Department of Natural Resources.

    The top two natural gas-producing wells were the Eclipse Resources' Tippens well in Monroe County with 1,117,754,000 cubic feet and Antero Resources' Gary well in Monroe County with 1,115,8012,000 cubic feet in 1Q 2014.. The next eight wells for natural gas were all Gulfport Energy wells in Belmont County.

    For oil, the top-producing well was Antero Resources Neuhart well in Noble County with 49,057 barrels.

    Seven of the top 10 oil wells were in Noble County.  Carroll County was No. 1 for gas production with 224 producing wells and 27,550,376,000 cubic feet and Belmont County was No. 2 with 26 wells and 13,138,089,000 cubic feet in the quarter.  Belmont, obviously, is generating huge production numbers.

    For oil, it's Carroll County No. 1 in the quarter with 691,273 barrels, followed by Harrison (481,080 barrels), Noble (383,653 barrels) and Guernsey (306,184 barrels).
     
  • Citrus sells Marcellus Holdings. Warren Resources, Inc. said it will buy all of the Marcellus assets of Citrus Energy Corp. and two additional working interest owners for $352.5 million, with an aim to strengthen its new basin platform in the prolific Marcellus Shale and for adding a new core area to Warren's existing California oil and Wyoming natural gas assets. After the acquisition, Lance Peterson, president and Co-Founder of Citrus, will be joining Warren on its Board of Directors. Also, Citrus' key technical, operating and land personnel will join Warren as employees, including Zachary Waite, who will assume the role of Vice President of Business Development and Marcellus Operations, and Daniel Collins, who will be the Vice President of Marcellus Land.
     
  • ETP pipeline to move gas for AEP, Antero and Range.  Energy Transfer Partners, L.P. (NYSE: ETP) today announced that its Board of Directors has approved building a pipeline to transport natural gas from processing facilities located in the prolific Marcellus and Utica Shale areas to numerous market regions in the United States and Canada. In conjunction with this announcement, ETP is announcing it has signed long-term agreements with multiple shippers and is launching a binding Open Season.

    The natural gas pipeline is currently sized to transport 2.2 billion cubic feet per day, however, depending on additional shipper commitments, the project likely will be expanded to transport up to 3.25 billion cubic feet per day. ETP has secured capacity commitments from producers who hold significant acreage positions in the Utica and Marcellus Shales and has been in negotiations with numerous other shippers who have expressed a desire to contract for capacity in the Open Season. The three largest shippers on the project are American Energy – Utica, LLC, Antero Resources Corporation and Range Resources Corporation. American Energy and Antero Resources both have options to purchase non-operating equity interests in the project.
     
  • NW PA could a triple play.  Venango, Clarion, Elk, Forest, Cameron & Clinton will get developed at some point and have the potential for drilling in the Upper Devonian, Marcellus and Utica according to Range Resources.  (RUMOR)
     
  • Chevron leaving Lithuania.  U.S. oil major Chevron <CVX.N> has divested its assets in Lithuania and pulled out of the country, the company said on its website.

    Chevron won a tender to explore for shale gas in the Baltic state in 2013, but pulled out from the tender later citing an uncertain legal framework.

    A few weeks ago, we reported that the prime minister of Lithuania was in Philadelphia speaking with oil and gas companies about exporting LNG to Lithuania.  With the announcement, the requests will be stronger.
     
  • Will Germany need Marcellus LNG?  The German government just announced a ban on all fracking until 2021.  Will it want to maintain its dependence on Russia or could it be an outlet for Marcellus LNG.

Rig Count

  • Baker Hughes Rigs count for the July 3rd reporting week.  
     
  • PA
    • Marcellus 52 rigs – down 5
    • Utica 2 rigs – unchanged    
       
  • Ohio
    • Utica 41 – unchanged
       
  • WV
    • Marcellus 27 – up 2
       
  • TX
    • Eagle Ford – 213 down 1
    • Permian Basin – 474 up 5
       
  • NM
    • Permian Basin – 86 up 1
       
  • ND
    • Williston – 171 unchanged
       
  • MT
    • Williston – 7 unchanged
       
  • CO
    • Niobrara – 55 unchanged

TOTAL U.S. Rig Count 1874 up 1

PA Permits for July 3, to July 10 2014

       County              Township        E&P Company
1.    Westmoreland    Derry                WPX

OH Permits – week ending July 5th, 2014

      County       Township     E&P Companies

1.    Belmont      York             XTO

Take advantage of the bullish outlook and become a member in ShaleDirectories.com.

Joe Barone jbarone@shaledirectories.com 610.764.1232
Vera Anderson vera@shaledirectories.com 570.337.7149
Andrea Bagnell andrea@shaledirectories.com 610.256.1898

 

Northeast Supply Enhancement