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  • Permit Activity last week.  
    • PA –37permits; Bradford most active as the result of Chesapeake
    • OH –20 permits; activity in all southern counties lead by Eclipse and Gulfport
  • Expo/Industry events for the next few months:
    • PA Energy Games September 6, 2014
    • DUG Eagle Ford September 15 – 17
    • Shale Insights September 24 - 25
    • 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

  • Chevron’s Regional HQ on hold.  Plans for Chevron's proposed regional headquarters in Moon Township, PA are on hold.

    Trip Oliver, manager of policy, government and public affairs, said today the company has decided to delay a "final investment decision on the proposed office project" for the foreseeable future.

    In explaining the decision, Mr. Oliver said Chevron currently is in a "unique capital-intensive period" and that it is concentrating its efforts on projects that will deliver the greatest return for its shareholders.

    "We have delayed the project at this point. The delay is for the foreseeable future. I can't really say much more than that," he said.

    He could not say how long the project would be delayed.
  • Will Wayne and Pike Counties in PA open for drilling in the near future?  The Delaware River Basin Commission (DRBC) has a new Executive Director Steven J. Tambini who started on August 1st.  There has been a moratorium on drilling in these two counties ever since a drilling moratorium was enacted in NY.  We will be watching to see if Tambini lifts the ban.  Tambini has held a number of positions in water management and supply in PA and NJ.

    We’ll watch for any movement which may lead to the lifting of the moratorium in Wayne and Pike Counties.
  • Gulfport’s midstream agreements with Rice and MarkWest.  To capture development synergies within the area of mutual interest ("AMI") of the previously announced joint development agreement between Gulfport and Rice Energy Inc., Gulfport and Rice have entered into a letter of intent and are finalizing definitive agreements whereby Rice will construct and operate gas gathering pipelines associated with Gulfport's Utica Shale interests in Smith Township and portions of Goshen, Wayne and Washington Townships in Belmont County, Ohio.

    In conjunction with these agreements, Gulfport and MarkWest Energy Partners, LP  have executed a letter of intent and are finalizing definitive agreements pursuant to which MarkWest will construct gas gathering facilities to gather Gulfport's dry gas production from portions of Wayne and Washington Townships in Belmont County, Ohio, Sunsbury Township in Monroe County, Ohio and portions of adjacent townships.
  • EQT to drill in the Utica in PA.  EQT in its second quarter conference call stated that it will be drilling a Utica well in Greene County, PA.

    Will a successful Utica well in PA lead to more Utica drilling in PA?
  • Cabot 2nd Qtr. Results.  Cabot Oil & Gas reported strong double-digit increases in second-quarter results for natural gas and liquids production, primarily from Marcellus Shale operations, all contributing to a double-digit rise in profit, SMG finds.

    Natural gas production jumped 34.3%, to 121.8 Bcf, from 90.7 Bcf in the year-ago quarter, while liquids (crude oil, condensates, natural gas liquids) production totaled 961,000 Bbls, up 26% year-over-year.

    During the second quarter, Cabot averaged 1.26 Bcf of net Marcellus Shale production – a 41% increase from the year-ago quarter.

    Cabot’s second-quarter net production in the Eagle Ford Shale was 10,308 BOE/d, a 76% increase over 2013′s comparable quarter. The results included 9,784 BPD of liquids, an 83% jump from the year-ago period.

    Second-quarter profit increased 21%, to $118.42 million from $89.11 million, while quarterly revenue rose by 18.6%, to $533.19 million, from $449.68 million.
  • Exporting LNG to combat Russia.  A Freeport, Texas natural gas terminal has received permission from the Federal Energy Regulatory Commission to begin exporting liquefied natural gas (LNG).

    The Freeport LNG site was initially a natural gas import terminal in 2005. But as one would assume, the recent years of natural gas excess have made the necessity for imported essentially void. Now, according to The Hill, the Freeport based development will host three liquefaction units, each with a capacity of 4.4 million metric tons of gas a year.

    Freeport could be a part of an exporting trend as Russian political strife thickens. The hill reports that Freeport’s approval came as policymakers are debating whether to expedite the process of approving exports to help offset Russian supremacy over Europe. Moves are taking place to limit the Energy Department’s review of new facilities all the while, in other parts of the country; similar facilities are receiving permission to begin exporting natural gas. An article from fuelfix reported that an Oregon based project won the conditional 20-year permit to export up to 1.25 billion cubic feet per day of natural gas to countries that don’t have free trade agreements with the United States, a major milestone for the Pacific Northwest project.
  • Southwestern 2nd Qtr. Results.  In the second quarter of 2014, Southwestern placed 23 new wells on production in the Marcellus Shale resulting in net gas production from the Marcellus Shale of 61 Bcf, up approximately 80% from 34 Bcf in the second quarter of 2013. Gross operated production in the Marcellus Shale was approximately 744 MMcf per day at June 30, 2014. With activity to date and the company's planned level of drilling for the remainder of the year, Southwestern estimates that it will drill approximately 73 to 77 operated wells in the Marcellus Shale in 2014, compared to 80 to 85 wells previously forecast.

    As of June 30, 2014, Southwestern had 216 operated wells on production and 93 wells in progress. Of the operated wells on production, 215 were horizontal wells of which 102 were located in Bradford County, 16 were located in Lycoming County and 97 were located in Susquehanna County. Of the 93 wells in progress, 34 were either waiting on completion or waiting to be placed to sales, including 8 in Bradford County, 1 in Lycoming County and 25 in Susquehanna County.

    Southwestern continues to test its acreage in Wyoming and Sullivan Counties that was acquired in 2013 and is currently drilling its first horizontal well in Wyoming County, the Dimmig 2H, which is planned to be tested in the fourth quarter. Three vertical wells have also been drilled in Wyoming and Sullivan Counties to help delineate the company's acreage.

    Southwestern has also begun testing the Upper Marcellus formation and its first well, the Preston Perkins 7H located in Bradford County, is drilled. The company plans to have four Upper Marcellus wells drilled and completed by year-end.
  • PPL building transmissions line to take advantage of low cost nat gas.  Seeking to keep up with development of the Marcellus Shale and the changing power generation landscape, PPL Electric Utilities requested approval to build 725 miles of new transmission line stretching across northern Pennsylvania to New York and New Jersey and south to Maryland.

    It would be PPL’s most expensive transmission project to date.

    PPL submitted a proposal for the $4 billion to $6 billion power line to PJM Interconnection, the multi-state grid operator. The submission is the first step in the process.

    PPL says the proposed line would help deliver low-cost, clean-burning power to markets at a time when older power plants are being taken offline. With the growth of smaller natural gas generators located on natural gas plays, utilities are stringing transmission lines to allow plants to move their electricity into the power grid.
  • Seneca focusing on western PA.  Seneca’s Marcellus Shale drilling activity during the third quarter was focused largely in its greater Clermont-Rich Valley area located in Elk, McKean and Cameron counties, Pa., within the Western Development Area (WDA). This reflects a shift in operations from its prior focus area in Lycoming County, Pa. in the Eastern Development Area (“EDA”). Seneca had planned this shift after its delineation drilling in the WDA confirmed substantial development opportunity. Until the firm transportation capacity on the Atlantic Sunrise pipeline expansion project becomes available in late 2017, Seneca will continue to focus its operations in the WDA.

    In July, Seneca brought nine new wells on line from its first development pad in the greater Clermont-Rich Valley area with 24-hour peak production rates that averaged 8.2 MMcf per day per well. These wells, located on Pad N where Seneca has a 100% net working and revenue interest, had an average lateral length of 5,297' and each well was completed using a reduced cluster spacing (“RCS”) design, averaging 35 stages per well. The average capital cost to drill and complete each of these wells was approximately $6.5 million.

    In addition to the nine wells on Pad N in the greater Clermont-Rich Valley area, Seneca expects to initiate production from an additional 22 wells during its fiscal 2014 fourth quarter, 16 of which are located in the EDA. With this new production, Seneca expects that its daily net production rate in Pennsylvania will exceed 500 MMcfe per day.
  • Noble 2nd Qtr. Results. Noble Energy Reports Triple-Digit Marcellus Shale Production Increase

    Noble Energy said Thursday second-quarter production from its Marcellus Shale assets averaged a record 249 MMcfe/d — a 120% increase from the same quarter in 2013.

    Gross production from Noble’s Marcellus joint venture with Consol Energy surpassed 650 MMcfe/d, up more than 800% from 70 MMcfe/d when it was formed three years ago.
  • Aubrey’s next move.  American Energy Partners is coming to PA.  McClendon is currently seeking partners and vendors for an anticipated 20 wells by year-end 2015 (RUMOR)
  • Largest oilfields in the U.S.  The Permian Basin is certainly the place to be.


  • EQT 2nd Qtr. Results. EQT Corp, with its continued focus on the Marcellus Shale, reported second-quarter sales volume totaling 110.1 Bcfe, a 17% increase from second-quarter 2013’s results.

    Sales volume from the Marcellus/Upper Devonian shales alone averaged 943.4 MMcfe/d, 25% higher; while natural gas liquids volume totaled 1.33 MMBbls, 15% higher year-over-year.

    The sales were roughly 4 Bcf below guidance due to the delay of bringing online 22 wells on 3 multi-well pads, all of which are currently producing, Shale Media Group understands.

    Pittsburgh-based EQT’s second-quarter profit totaled $138.26 million, up 46.9%, from $94.12 million one year ago, while quarterly revenue rose 11.2%, to $526.17 million, from $473.09 million in the year-ago quarter.
  • Magnum Hunter adding acreage.  Magnum Hunter Resources Corporation announced that it closed on the purchase of approximately 1,700 net mineral acres located in Monroe County, Ohio and Wetzel County, West Virginia for approximately $22.7 million from the Ormet Corporation, et al.
  • CONSOL and Range need more pipelines. Consol Energy Inc. more than doubled its gas production during the past three months, compared with the same period in 2013, but like other Marcellus Shale operators, it’s eager to get its gas out of this region and to more lucrative markets.

    The Cecil-based company, like its peers, has been hamstrung by a lack of pipelines to take the growing quantity of Appalachian gas elsewhere. With so many competitors trying to squeeze their product into limited pipeline space, the price in this region is lower than the Henry Hub price, the national benchmark.

    When it comes to natural gas prices, “volatility is the key word,” said Consol’s Chief Commercial Officer Jim Grech said in a conference call with analysts on Tuesday.

    Consol announced Tuesday that it has signed a memorandum of understanding to be the anchor shipper on the proposed NEXUS pipeline that would carry gas into Michigan. The company said it already has a “very strong end user commitment on the other end of the pipe.”

    Range Resources said it sells its gas into 21 different markets using 11 interstate pipelines, partly to manage price volatility.

    “The midstream industry recognizes the dramatic volume growth coming from the Marcellus and Utica plays. And there had been numerous announcements of ... pipeline projects to move this growing volume from the Northeast to other markets,” said Ray Walker, chief operating officer for the Texas-based firm.

    The attractive markets are in the southeast, where utilities are building new natural gas-fired power plants, and the Gulf Coast, where the petrochemical industry is booming and there are liquefied natural gas terminals to ship U.S. gas abroad, Mr. Walker said. The Midwest is also an appealing destination, Range reported.
  • APEX Energy in Westmoreland County, PA. Company is supposedly going to drill 8 wells in Penn Township in Westmoreland County.  (RUMOR)
  • PDC Energy expands Utica Shale Acreage.  PDC Energy, Inc. announced that it agreed to sell its fifty percent interest in PDC Mountaineer LLC ("PDCM"), a Marcellus Joint Venture ("JV"), to Mountaineer Keystone Energy, LLC for approximately $250 million subject to certain purchase price adjustments. PDC's net pre-tax proceeds from the sale, after its share of JV debt repayment and other working capital adjustments, is expected to be approximately $190 million comprised of $150 million in cash and a $40 million note. The transaction includes the buyer's assumption of PDC's share of the firm transportation obligations related to the assets owned by PDCM as well as PDC's share of certain PDCM natural gas hedging positions for the years 2014 and 2015.

    Through a series of transactions, the Company recently added approximately 13,000 net acres, subject to confirmation of title, in the liquid-rich windows of the Utica Shale play in southeast Ohio. The newly acquired acreage closely offsets PDC's existing acreage in southern Utica including the Company's recently drilled Palmer unit acreage in eastern Morgan County as well as leasehold in northern Washington County. The cost for the additional acreage is approximately $35 million which the Company expects to be funded within its existing 2014 capital budget of approximately $647 million.

    PDC's total acreage position in the Utica Shale with the additional acreage increases from approximately 54,000 to 67,000 net acres. Total gross horizontal well inventory is projected to increase from approximately 300 to 350 locations. The Company's acreage position in southern Utica is substantially contiguous in the wet-gas and condensate windows and provides for increased drilling, operational and midstream synergies. The Company continues to pursue additional acreage acquisitions that complement its existing Utica Shale position.

    PDC recently added a second drilling rig in the play. The Company is progressing with completion operations on its two-well Palmer pad, and has re-initiated production from its three-well Garvin pad in Washington County that was temporarily shut in due to midstream issues.  

Rig Count

  • Baker Hughes Rigs count for the July 25th reporting week.
    • PA
      • Marcellus 51 rigs – down 2
      • Utica 2 rigs – unchanged    
    • Ohio
      • Utica 43 – down 1
    • WV
      • Marcellus 27 up 1
    • TX
      • Eagle Ford – 211 down 1
      • Permian Basin – 467 down 5
    • NM
      • Permian Basin – 88 up 4
    • ND
      • Williston – 178 unchanged
    • MT
      • Williston – 6 unchanged
    • CO
      • Niobrara – 55 unchanged

TOTAL U.S. Rig Count 1883 up 12

PA Permits for July 24 to July 31, 2014

       County            Township             E&P Company
1.    Beaver              New Sewickley     PennEnergy
2.    Beaver              New Sewickley     PennEnergy
3.    Beaver              New Sewickley     PennEnergy
4.    Bradford            Albany                Chesapeake
5.    Bradford            Athens                Chesapeake
6.    Bradford            Overton               Chesapeake
7.    Bradford            Pike                    Chesapeake
8.    Bradford            Terry                   Chesapeake
9.    Bradford            Tuscarora            Chesapeake
10.    Bradford          Olster                  Chesapeake
11.    Bradford          West Burlington    Chesapeake
12.    Bradford          West Burlington    Chesapeake
13.    Bradford          Wilmot                 Chesapeake
14.    Bradford          Wilmot                 Chesapeake
15.    Bradford          Wilmot                 Chesapeake
16.    Bradford          Wilmot                 Chesapeake
17.    Bradford          Wilmot                 Chesapeake    
18.    Butler              Adams                 Rex    
19.    Lycoming        Gamble                Atlas
20.    Lycoming        Gamble                Atlas
21.    Lycoming        McHenry               PA Gen Energy
22.    Lycoming        McHenry               PA Gen Energy
23.    Sullivan           Fox                      Chesapeake
24.    Susquehanna  Auburn                  Chesapeake
25.    Susquehanna  Great Bend            Southwestern
26.    Susquehanna  Middleton               WPX
27.    Susquehanna  New Milford            Southwestern
28.    Susquehanna  New Milford            Southwestern
29.    Tioga              Middlebury             Shell
30.    Tioga              Middlebury             Shell
31.    Tioga              Middlebury             Shell
32.    Washington     Independence         Range
33.    Washington     North Strabene        Range
34.    Washington     Robinson                Range
35.    Washington     Somerset                Range
36.    Wyoming        Washington             Chesapeake
37.    Wyoming        Washington             Chesapeake

OH Permits – week ending July 26th, 2014

       County               Township          E&P Companies

1.    Belmont              Smith                 Rice
2.    Belmont              Smith                 Rice
3.    Guernsey            Londonderry        Gulfport
4.    Guernsey            Oxford                Eclipse
5.    Guernsey            Oxford                Eclipse
6.    Guernsey            Oxford                Eclipse
7.    Guernsey            Oxford                Eclipse
8.    Guernsey            Oxford                Eclipse
9.    Harrison              Cadiz                 Hess
10.    Harrison            Cadiz                 Hess
11.    Harrison            Cadiz                 Hess
12.    Monroe             Adams               Gulfport
13.    Monroe             Adams               Gulfport
14.    Monroe             Adams               Gulfport
15.    Monroe             Adams               Gulfport
16.    Monroe             Adams               Gulfport
17.    Noble                Stock                CONSOL
18.    Noble                Stock                CONSOL
19.    Washington       Fearing              EM Energy Ohio
20.    Washington       Fearing              EM Energy Ohio

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Joe Barone 610.764.1232
Vera Anderson 570.337.7149
Andrea Bagnell 610.256.1898



Northeast Supply Enhancement