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NewsLetters

  • Permit Activity last week.  
     
    • PA –15permits; Shell is back in Tioga
    • OH –9 permits; Eclipse dominates Guernsey

Expo/Industry events for the next few months:

  • PA Energy Games September 6, 2014, Hughesville, PA
  • DUG Eagle Ford September 15 – 17, San Antonio, TX
  • Shale Insights September 24 – 25, Pittsburgh, PA
  • 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

  • Rex buys 208,000 acres from Shell.  Rex Energy has entered into a definitive purchase agreement with SWEPI, LP, an affiliate of Royal Dutch Shell, plc ("Shell") to acquire a 100 percent interest in approximately 208,000 gross (207,000 net) acres prospective for the Marcellus, Upper Devonian/Burkett and Utica Shales in Pennsylvania and Ohio for approximately $120 million in cash, subject to customary closing adjustments.

    The transaction is expected to close in September 2014. The assets to be acquired are located in Armstrong, Beaver, Butler, Lawrence, Mercer and Venango counties in Pennsylvania and Columbiana and Mahoning counties in Ohio.

    The additional acreage, combined with recent leasing, will bring Rex Energy's position in its Butler Operated Area to approximately 298,000 gross acres.

    Look for these counties to see increased drilling as the result of Rex’s purchase.
     
  • Shell shedding more North American assets.  Royal Dutch Shell is negotiating with private equity giant Blackstone Group for the oil major’s 50% stake in the Haynesville Shale for $1.2 billion, numerous media report.

    Shell has placed most, if not all, of its North America shale assets on the block, as the return on investment on the holdings hasn’t met the energy giant’s projections/needs.

    Shell owns a 50% stake in the Haynesville, with the other half owned by Canadian independent energy producer Encana.
     
  • Shells exchanges properties with Ultra.  Ultra Petroleum Corp. announced that the company has signed a purchase and sale agreement to acquire all Pinedale field properties from SWEPI, LP, an affiliate of Royal Dutch Shell, plc ("Shell") in exchange for a portion of Ultra's Marcellus Shale properties and cash consideration of $925.0 million.

    NOTE: It certainly looks like Shell is focusing its drilling efforts in Northern PA.  With the sale to Rex of Marcellus properties and the sale of Haynesville properties to Black Rock, Shell appears to executing its strategic plan to shed some its Shale assets in the U.S.  Shell’s properties in Northern PA must look promising.
     
  • Eagle Ford keeps on gushing.  The U.S. Energy Information Administration expects that the Eagle Ford Shale will produce 1.51 million barrels of crude oil and other liquids daily in September.

    It would be a gain of around 31,000 daily barrels over August production for the South Texas field, according to the EIA’s latest Drilling Productivity Report, released this week.
     
  • Eclipse has good 2nd quarter and expanding the 4th Qtr. Eclipse Resources’ production volumes for the three months ended June 30, 2014 were 3.8 Bcfe, or 41.9 MMcfe per day, which represents a sixty-fold increase over the prior year’s comparable quarter and 9% over the first quarter of 2014. Production for the quarter was comprised of 64% natural gas, 18% NGL, and 18% oil.

    The Company is currently running 5 operated rigs in the Utica Shale play, including 1 top hole rig, and has continued to make improvements in its drilling efficiencies, averaging just 23 days per well for wells drilled to depth during the quarter ended June 30, 2014. Additionally, as previously disclosed during the second quarter, the Company has contracted two additional horizontal rigs to be delivered in the fourth quarter of 2014. The Company currently has one dedicated frac crew and is negotiating for a second. Based on the current drilling pace, the Company continues to believe it is running at or ahead of schedule on its drilling plan for the year.
     
  • Rice forms Midstream Company.  Rice Energy announced that it is pursuing the formation of a midstream master limited partnership (MLP) and intends to confidentially submit a draft Registration Statement on Form S-1 to the U.S. Securities and Exchange Commission for an initial public offering (IPO) of common units of the MLP. The offering is expected to be completed in the first half of 2015.
     
  • Utica is just beginning with huge upside.  Ohio only has seen the tip of the iceberg when it comes to developing the Utica Shale, said Rayola Dougher, senior economic adviser for the American Petroleum Institute.

    Across the county, shale oil development is reducing the nation’s dependence on foreign oil and fueling the economy, said Dougher, who is one of several speakers slated for the Utica Summit II program Oct. 14 at University Center on the Kent State University Stark Campus.

    Utica Shale drilling — currently focused in a half dozen southeastern Ohio counties — should complement Ohio’s existing manufacturing base, especially the steel and chemical industries, Dougher said.

    “It’s just only the beginning of the journey,” she said.

    Utica Summit II has been organized by the Canton Regional Chamber of Commerce, Shale Directories and The Repository. Dougher and other speakers will lead discussions on what Utica Shale development can mean for manufacturing, transportation, job creation and more.
     
  • Columbia building more pipelines Columbia Pipeline Group (CPG), a unit of NiSource Inc., today announced a total of $1.75 billion in new investment in infrastructure that will enable it to transport up to 1.5 billion cubic feet per day (Bcf/D) of natural gas from Marcellus and Utica production areas to markets served by its Columbia Gas Transmission (Columbia Transmission) and Columbia Gulf Transmission (Columbia Gulf) pipeline systems.

    The new investments include two significant projects, one of which involves construction by Columbia Transmission of a new natural gas pipeline in Ohio and West Virginia that will enhance its existing infrastructure and support natural gas supply development in western Pennsylvania, northern West Virginia and eastern Ohio.

    The proposed Ohio and West Virginia pipeline, known as Columbia Transmission’s Leach XPress project, is supported by long-term firm service agreements with Range Resources – Appalachia, LLC, Noble Energy, Inc., Kaiser Marketing Appalachian, LLC and American Energy Utica – LLC. The project, which involves construction of approximately 160 miles of pipeline, compression and related facilities on Columbia Transmission’s system, will provide access to multiple Marcellus and Utica receipt points and establish a substantial new header system serving the heart of the Appalachian supply basin.
     
  • Gulfport plans to drill 95 wells in 2014. Gulfport has seven rigs working in the Utica and plans to drill as many as 95 gross wells this year. To move its natural gas to market, the company has signed an agreement to use Energy Transfer’s proposed Rover Pipeline, which would transport natural gas from Leesville, across southern Stark County, and eventually to Michigan and Canada.
     
  • New pipeline for eastern PA.  A new 100-mile pipeline will transport lower cost natural gas produced in the Marcellus Shale region to homes in eastern Pennsylvania and western New Jersey. PennEast Pipeline Company, LLC, announced plans Tuesday to build the new pipeline that will go through the Lehigh Valley into Hunterdon and Mercer counties in New Jersey. The PennEast pipeline will provide natural gas service to the equivalent of 4.7 million homes, and will offer savings to consumers in lower energy and gas transportation costs, according to company officials.
     
  • Texas leads oil resurgence.  Texas has squarely reaffirmed its status as king of the oil patch.

    Oil coaxed from the rapidly developing Eagle Ford and Permian Basin production areas recently lifted the state's output back above 3 million barrels per day (bpd) for the first time in more than three decades. That put the Lone Star state at more than a third of total U.S. oil production, vs. about 12% for No. 2 North Dakota. Texas is on track to outpace Iraq, which, at 3.2 million bpd in April, is the Organization of the Petroleum Exporting Countries' second-largest producer, behind Saudi Arabia.

    Texas' resurgence stems from capital spending that is expected to top $44 billion in the Eagle Ford area and Permian Basin this year, says research firm Wood Mackenzie. Effectively all of those dollars are developing means to reach oil held in shale reservoirs, part of the shale oil and gas revolution that has altered not just the U.S., but the global energy landscape.
     
  • Chesapeake’s Utica production soaring.  Chesapeake Energy reported lucrative production gains on its Utica shale properties today as part of its second-quarter earnings report.

    Oil and gas production rose 373 %over the same time period last year, and 34 percent over the previous quarter, reports Shane Hoover of CantonRep.com. That sets Chesapeake’s production at around 67,000 barrels of oil equivalent per day, 60 percent of which was natural gas, 30 percent of this production was natural gas liquids, and the remaining 10 percent was oil.

    Chesapeake is by far the leading producer of energy in the Utica shale, operating 8 rigs and 48 wells in the region during the quarter. Overall, it owns 210 Utica wells in various stages of completion.

    The company earned $5.2 billion revenue in the quarter, up 10 percent from a year before.
     
  • EV Energy to begin drilling Oct. 1 in Tuscarawas, County, OH.  EV Energy Partners LP announced it will begin drilling in Tuscarawas County on Oct. 1 to take advantage of the Utica shale oil boom, said EVEP Executive Chairman John Walker, with additional wells planned for 10 eastern Ohio counties including Stark and Tuscarawas, with French partner Total, where the company has acquired about 65,000 acres. The location of the wells was not disclosed.

Rig Count

  • Baker Hughes Rigs count for the August 8TH reporting week.
     
  • PA
    • Marcellus 49 rigs – down 3
    • Utica 2 rigs – unchanged    
    • Ohio
    • Utica 43 – unchanged
  • WV
    • Marcellus 25 down 2
  • TX
    • Eagle Ford – 201 down 3
    • Permian Basin – 471 down 1
  • NM
    • Permian Basin – 89 down 1
  • ND
    • Williston – 182 up 5
  • MT
    • Williston – 8 unchanged
  • CO
    • Niobrara – 54 up 2

TOTAL U.S. Rig Count 1908 up 19

PA Permits for August 7, to August 14 2014

       County              Township             E&P Company
1.    Beaver               Ohioville                Chesapeake
2.    Bradford             Albany                  Chesapeake
3.    Bradford             Litchfield                Chesapeake
4.    Bradford             Overton                  Chief
5.    Bradford             Wysox                   Chesapeake
6.    Centre                Snow Shoe            Range
7.    Lycoming            Anthony                Range
8.    Lycoming            Upper Fairfield       Inflection
9.    Tioga                   Chatham              Shell
10.    Tioga                 Chatham              Shell
11.    Tioga                 Chatham              Shell
12.    Tioga                 Middlebury           Shell
13.    Washington        Amwell                EQT
14.    Wyoming            Forkston             Southwestern
15.    Wyoming            Windham            Chesapeake

OH Permits – week ending August 9th, 2014

       County              Township                     E&P Companies

1.    Carroll                Perry                          Chesapeake
2.    Guernsey           Londonderry                Amer. Ener. Utica
3.    Guernsey           Londonderry                Eclipse
4.    Guernsey           Londonderry                Eclipse
5.    Guernsey           Londonderry                Eclipse
6.    Guernsey           Londonderry                Eclipse
7.    Guernsey           Londonderry                Eclipse
8.    Guernsey           Londonderry                Eclipse
9.    Guernsey           Londonderry                Eclipse

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

 

Midstream PA