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  • Permit Activity last week.  
    • PA –18 permits; CONSOL in Allegheny County; Hilcorp active in Lawrence County
    • OH –15 permits; American Energy Utica active in Belmont and Harrison; Hess in Belmont

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

Latest facts and a rumor from the Marcellus and Utica Shale

  • Shell’s hits a gusher in the Utica in Tioga County, PA.  Royal Dutch Shell is set to acquire more drilling rights in northern Pennsylvania later this year – 155,000 acres in Potter and Tioga counties.

    Last week, the company decided to leave its Pinedale and Haynesville onshore gas assets in exchange for about $2.1 billion, plus additional acreage in the Marcellus and Utica shale areas in Pennsylvania.

    The company has focused on Marcellus gas in northeastern and Central Pennsylvania as part of a joint venture with Houston-based Ultra Petroleum Corp., according to a story in the Pittsburgh Post-Gazette. Royal Dutch Shell’s subsidiary SWEPI LP also controls about 900,000 acres in Pennsylvania, according to that news report.

    “The deep-pocketed Shell became the first operator to make a serious attempt to harvest gas from another shale layer, the Utica, found even deeper. Discovery of a gusher, yielding eye-opening gas flows, in Tioga County has been the talk of the industry,” according to Potter County Today.

    In one agreement with Ultra Petroleum, Shell will acquire 155,000 acres in the Marcellus and Utica Shale areas in the state. The transaction, expect to close in the third quarter, will include active wells flowing about 100 million cubic feet of gas a day, according to Potter County Today.

    “We continue to restructure and focus our North America shale oil and gas portfolio to deliver the most value in the longer term” Marvin Odum, Shell’s Upstream Americas Director, said in a prepared statement.

    The Shell deal with Ultra is a big move by Shell which will put it in a very strong position in PA.  

    Shell’s Utica wells in Tioga County have hit oil according to the rumors that I have heard (RUMOR).  I’m anxiously looking for the production numbers from those wells.
  • Antero projects drilling 835 wells in the Utica.  According to the Antero Resources August 2014 company presentation, Antero anticipates "835 future gross drilling locations" in the Utica Shale in Ohio. This represents a significant capital investment when you consider the $5-$7 million estimated cost to bring one of the wells into production.
  • Indian company’s JV with Chevron and Carrizo is paying off.  Indian business newspaper Mint cited unnamed sources familiar with the plan as saying Reliance had now firmed up the new investments in the three joint ventures it has in the US.

    It reported that most of the funds would be directed towards operations in the Marcellus shale, in the eastern part of the US, where Reliance has agreements with Chevron and Carrizo Oil & Gas.

    “In the JVs with Pioneer and Carrizo, the business has already turned profitable and cash flows from the business are enough to fund the incremental capex there. Therefore, the new capex is meant for the stake with Chevron,” Mint cited one of its sources as saying.

    Natural Gas to cracker plants in India

    Reliance’s plan to ship ethane from the United States to a chemical complicated in its household nation may possibly involve gas from the Marcellus shale.

    Reliance Industries stated this week it struck a deal with a North American export terminal and ordered six new, enormous ships to carry 1.5 million tons of ethane annually to its upgraded ethane crackers.

    “Reliance's investments in shale gas and its current crackers portfolio in India are  all a natural match for sourcing ethane from North America and shipping it to India to attain lengthy term feedstock competitiveness,” the organization stated in a release.
  • PA 2014 production data.  DEP released the most current data for unconventional wells in Pennsylvania and once again the production figures have shown a dramatic increase. According to the data, wells termed unconventional in PA produced 1.9 TCF of natural gas, 1.8 MM barrels of condensate and little over 200,000 barrels of oil. It is important to note these figures typically are updated as operators update their production reports due to reporting errors that may include missing wells, incorrect data and in some cases there are operators who have not submitted their data prior to DEP releasing the data.

    Compared to the last 6 months production data (July 1 – December 31, 2013) operators in PA produced just under 1.7 TCF natural gas, 1.7 MM barrels of condensate and 182,000 barrels of oil.

    Susquehanna County was the top producing county in terms of natural gas with 455 BCF followed by Bradford (411 BCF), Lycoming (270 BCF), Washington (197 BCF) and Greene (172 BCF).   

    Chesapeake remains that top producing operator by volume with production at 399 BCF, an increase from 376 BCF last reporting period. Following Chesapeake were Cabot (260 BCF), Range (139 BCF), Southwestern (138 BCF) and EQT (135 BCF). When looking at production on a per well basis during the period, Cabot has the top 5 and 7 of the top 10. Chief has the other top 3 wells. When looking on a daily average, Cabot has 9 of the top 10 and 11 of the top 20 in the Commonwealth. Chief Oil and Gas has 7 and Range and Seneca Resources each 1. The top 8 wells all averaged over 20 million cubic feet per day.

    Matt Henderson is the Shale Gas Asset Manager for Penn State University’s Marcellus Center for Outreach and Research (MCOR) and a member of the Penn State Extension Marcellus Education Team (MET). A more in depth analysis of first half production will be delivered in September’s monthly webinar series. This analysis will look at some of the water usage as well as a look at some production figures from Utica in the Northern Tier and some Upper Devonian well data. More information on the MET’s educational webinar series can be found at .
  • EnLink planning new pipeline in OH.  The EnLink Midstream companies, EnLink Midstream Partners, LP and EnLink Midstream,  announced plans to construct a new 45-mile, eight inch condensate pipeline and six natural gas compression and condensate stabilization facilities that will service major producer customers in the Utica Shale, including Eclipse Resources. The total investment for the expansion project is over $250 million, roughly doubling the capital EnLink Midstream has invested in the Ohio River Valley to more than $500 million.
  • Proposed PA pipeline halted.  Spectra Energy has put a proposed interstate natural gas pipeline on hold.

    The pipeline would have run from Pennsylvania to North Carolina and would have crossed Maryland, West Virginia and Virginia.

    Arthur Diestel, spokesman for the Houston-based pipeline builder and operator, told The Daily Progress in an email that the company is suspending development work on the proposed project.

    I wonder what this means.  We’ll track this development to see what happened.
  • Athlon adds more acreage in the Permian.  Independent producer Athlon Energy is acquiring from multiple unrelated/unnamed third parties Permian Basin producing properties and undeveloped acreage for $382 million in cash.

    The properties are 100% operated with more than 90% of the total acreage concentrated on the western side of the northern Midland Basin in Texas’ Midland, Martin and Glasscock counties, with all acreage adjacent to Athlon’s existing operating areas.
  • EnerVest bullish on NE OH.  Jim McKinney, senior vice president and general manager from EnerVest, a Houston-based company, said his company believes that with changes in drilling techniques, activity will increase in the oil-rich northern part of the Utica Shale, which includes Trumbull County.

    “When companies first drilled, they were using the same techniques they were using in the dry- and wet-gas areas of the Utica,” he said.

    EnerVest has found in Tuscarawas and Guernsey counties that by using more water and sand in the fracking process, there can be success in the oil-rich portions of the Utica, McKinney said.
  • Ohio drilling activity
    • Counties
      • Harrison (49)
      • Guernsey (43)
      • Monroe (42)
      • Noble (35)
      • Carroll (17)
      • Belmont (12)
      • Jefferson (1)
      • Morgan (1)
      • Portage (1)
      • Trumbull (1)
    • Operators – wells classified as currently drilling
      • Antero (38)
      • Chesapeake (34)
      • Gulfport (32)
      • American Energy (22)
      • Eclipse (16)
      • Hess (14)
      • PDC Energy (8)
      • Triad Hunter (8)
      • HG Energy (6)
      • Carrizo (5)
      • CNX Gas (4)
      • Hall Drilling (4)
      • XTO (3)
      • EQT Production (2)
      • Rex Energy (2)
      • Chevron (1)
      • Mountaineer Keystone (1)

I had no idea so many companies were drilling in OH.  

Rig Count

  • Baker Hughes Rigs count for the August 15th reporting week.  
    • PA
      • Marcellus 49 rigs – unchanged
      • Utica 2 rigs – unchanged    
    • Ohio
      • Utica 42 – down 1
    • WV
      • Marcellus 28 up 3
    • TX
      • Eagle Ford – 199 down 2
      • Permian Basin – 470 down 1
    • NM
      • Permian Basin – 88 down 1
    • ND
      • Williston – 185 up 3
    • MT
      • Williston – 8 unchanged
    • CO
      • Niobrara – 57 up 3
    • TOTAL U.S. Rig Count 1913 up 5

PA Permits for August 14, to August 21, 2014

       County               Township            E&P Company
1.    Allegheny            Findlay                 CONSOL
2.    Allegheny            Findlay                 CONSOL
3.    Allegheny            Findlay                 CONSOL
4.    Allegheny            Findlay                 CONSOL
5.    Allegheny            Findlay                 CONSOL
6.    Allegheny            Findlay                 CONSOL
7.    Butler                 Connoquenessing   Rex
8.    Greene                Franklin                Vantage
9.    Greene                Franklin                Vantage
10.    Greene               Morris                  EQT
11.    Greene               Morris                  EQT
12.    Lawrence            Pulaski                Hilcorp
13.    Lawrence            Pulaski                Hilcorp
14.    Lawrence            Pulaski                Hilcorp
15.    Lawrence            Pulaski                Hilcorp
16.    Susquehanna      Rush                   WPX
17.    Westmoreland     Bell                    CONSOL
18.    Westmoreland     Derry                  WPX

OH Permits – week ending August 16th, 2014

       County                Township             E&P Companies

1.    Belmont                Wheeling              Amer. Ener. Utica
2.    Belmont                Wheeling              Amer. Ener. Utica
3.    Belmont                Flushing                Hess
4.    Belmont                Flushing                Hess
5.    Belmont                Flushing                Hess
6.    Belmont                Flushing                Hess
7.    Belmont                Flushing                Hess
8.    Carroll                   Perry                    Chesapeake
9.    Carroll                   Perry                    Chesapeake
10.    Carroll                  Perry                    Chesapeake
11.    Carroll                  Perry                    Chesapeake
12.    Harrison                Moorefield            Amer. Ener. Utica
13.    Harrison                Moorefield            Amer. Ener. Utica
14.    Harrison                Moorefield            Amer. Ener. Utica
15.    Harrison                Moorefield            Amer. Ener. Utica

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