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Permit Activity last week.  

  • PA –27 permits; Chesapeake active in Bradford and more; Southwestern in Susquehanna
  • OH –22 permits; new player Atlas Noble in Columbiana; Eclipse Resources in Guernsey and Harrison

Expo/Industry events for the next few months:

The Fourth Annual West Virginia Oil & Gas Expo October 1, 2014

Flash-Fire-Workshop October 8th Pro Football Hall of Fame, Canton, OH

Bill Radford, Safety Basin Coordinator, Eclipse Resources will be the featured speaker. It will be a good networking event for everyone in safety compliance and you’ll learn latest about FR clothing and handling.  Learn more about safety, network during breaks and lunch, all courtesy of Cintas, Bulwark and

Utica Summit II, October 14th, Canton, OH

Learn about the downstream opportunities coming to OH and western PA as the result of the cracker plants and more.  National and local speakers will give you real insight into what’s coming.  
See what will be happening with the cracker plants in PA, OH and WV
Register now

Midstream PA 2014, November 18TH, Penn State

PA’s first midstream conference.  Speakers from MarkWest, Williams, UGI and more.  You will learn what’s coming in midstream in 2015. Limited sponsorships and seating.

Register now to reserve your seat

Latest facts and a rumor from the Marcellus and Utica Shale

Thoughts for the week

  1. Shale Insight.  Kudos to the Marcellus Shale Coalition.  It hosted a very good expo.  The E&P companies that are members of the coalition were well represented at all the events.  I heard a number of very positive comments from the exhibitors who felt they made a number of good contacts.  We at Shale Directories think Shale Insight was a good for us.
  2. It’s not too late.  A number of companies that stopped by our booth at Shale Insight were at Shale Insight to see if there are still opportunities for their respective businesses.  We encouraged these companies to “jump in.”  Resources are still needed to support the growth especially next year which looks like it will be a gangbuster year.
  • Shell rig rumor somewhat confirmed.  A few weeks ago, we reported a rumor that Shell was bringing 5 rigs by the end of October.  We have learned that Shell made announcement in a Susquehanna County, PA newspaper that it is bringing in more rigs, but not until early 2015.
  • Aubrey does another deal. Former Chesapeake Energy Corp. CEO Aubrey McClendon's new company has found a Denver partner to help him deliver all the natural gas he's after.

    McClendon's Oklahoma City-based American Energy Partners LP has raised billions to drill in unconventional shale plays in the U.S. Much of that money is geared toward the Utica in Ohio.

    Now, his Utica subsidiary, American Energy-Utica has signed on as a customer of Denver-based MarkWest Energy Partners LP (NYSE: MWE), which will ship, process and fractionate what McClendon’s company is producing.
  • Shell takes another step towards building the cracker plant.  Shell has told the railroad company that will build the rail line at its cracker plant to purchase the all the track and material needed to build the line. (RUMOR)
  • Rex focusing on the Marcellus.  Rex Energy is moving away from the Utica and will be focusing on the Marcellus.  It’s adding a rig to new Marcellus acreage.
  • Vantage delays IPO.  Stating that the market conditions were not right, Vantage announced on CNBC this week that it was delaying its IPO. We’ll have to see if this affects its production budget for the remainder of 2014 and 2015.
  • Spectra Energy CEO outlines give 24-month outlook.  Gregory Ebely, CEO of Spectra Energy Corp. made the most telling statement about competitive dynamics in the midstream space at the recent Barclays CEO Energy-Power Conference:

    “I think the next 24 months is a really fascinating window, where the bulk of natural-gas infrastructure decisions through the end of the decade will actually be made; big producers, big customers will sign up and determine who will actually create that web. I know there are a lot of studies out there that talk about $600 billion over the next 20 years needed for midstream infrastructure.

    But I think a big chunk on the long-haul pipes, gathering and processing, et cetera will be made in about the next 24 months. On the liquids side, it's probably out to 36 months. So when you look to the end of the decade, a lot of the decision on what's going to get built, given how long it takes, given the profiles of different supply areas and the demand needs, those decisions are probably going to be made in the next two years.”
  • Fracking with butane.  Some of you may or may not know that there is considerable oil in Tuscarawas and Muskingum Counties, OH.  For example, Anadarko hit oil with a couple of wells in Muskingum County, but could not get out of the ground cost efficiently.  In an attempt to capture this oil, we have heard that testing is being done in Tuscarawas County to frack with butane to make it cost efficient to get the oil out of the ground.  (RUMOR)
  • Eagle Ford reporting coming.  Next Tuesday, the University of Texas at San Antonio (UTSA) will release its latest Eagle Ford Shale economic report.

    Jennifer Hiller of the San Antonio Express-news reports that the U.S. Energy Information Administration expects the Eagle Ford formation to reach 1.5 million barrel of light crude and condensate per day this month.  In addition, the oil and gas industry is expected to spend roughly $28 billion in the Eagle Ford region. Given the huge estimate of investing planned for the Texas oil fields, it’s safe to assume the economic report will have astonishingly high numbers of financial prosperity.

    The last report from the UTSA estimated that in 2012, the Eagle Ford had a $61 billion impact and supported 116,000 jobs. Only two years later, Texans working for oil and gas companies exceeded 300,000 in July according to the Texas Petro Index.

    A release event is planned for the economic report which will take place at the downtown campus in San Antonio from 10:30 am to noon. For more information on the event and to read the full report from the San Antonio Express-news, check out the recent article from Jennifer Hiller here- “UTSA to release Eagle Ford economic update.”
  • Henry Hub pricing losing ground to the Marcellus.  For nearly a quarter-century, traders around the world have looked to a spot in Louisiana for the best price of U.S. natural gas. Now they're looking east.

    The Henry Hub in southern Louisiana, which connects to more than a dozen on- and offshore pipelines from Texas and the Gulf of Mexico, has been surpassed as the most active place for trading physical U.S. natural gas by hubs in shale-rich Pennsylvania.

    "How important is the Henry Hub as a price proxy for the Eastern U.S.? My thinking is that, before long, it won't be very important at all," said Teri Viswanath, director of commodity strategy for natural gas at BNP Paribas in New York.

    Only about 240,000 million British thermal units (mmBtu) per day of natural gas have traded in the day-ahead Henry Hub market this year, down 70 percent from an average of more than 825,000 five years ago, according to IntercontinentalExchange data.

    The Dominion South hub, a key supply point in the Marcellus shale in southwest Pennsylvania, has averaged nearly 400,000 mmBtu per day so far this year, up sharply from about 290,000 in 2009, the ICE data show.

    The switch reflects the boom in shale gas production, as well as a growing recognition that pricing all U.S. gas at a single hub no longer makes sense. The industry is struggling to build new pipelines and infrastructure quickly enough to even out growing price discrepancies in regions like the Northeast.
  • EQT has strong 2nd Qtr.  EQT Corp.'s profit jumped 28 percent in the second quarter on double-digit increases in production in its Marcellus Shale gas holdings.

    EQT posted a profit of $110.9 million, or 73 cents per share, in the three months ended June 30, 2014, up from $86.8 million, or 57 cents a share, in the same period a year ago. Revenue was $526.2 million in the quarter, up from $473.1 million a year ago.

    The highlights included a 17 percent increase in gas production and 33 percent higher operating revenue for its midstream transmission. Although its sales volume was down 4 billion cubic feet from its projections due to delays at 22 wells, EQT reaffirmed its full year production guidance of between 465 and 480 billion cubic feet. There were 89 wells drilled in the quarter, including 55 in the Marcellus and 11 in the Upper Devonian.

    We recently wrote about our opinion of under reporting by Baker Hughes on rigs in PA.  Here’s an example of what we were talking about.  EQT has been drilling in the Upper Devonian, but these rigs are not reported in Baker Hughes weekly report.
  • Production up in the Eagle Ford and Bakken.  Oil production in the Eagle Ford and Bakken shales continues to climb, according to the analyst company Platts.

    Petro Global News reports that production in the shales grew by a combined 78,000 barrels per day in August, a 3.1 percent increase over July. The benchmark once again sets new all-time production records.

    Eagle Ford’s oil production was up 37 percent from one year ago, falling just short of 400,000 barrels a day.

    Production in the Bakken rose about 23 percent in the same period, ultimately reaching 1.2 million barrels of crude per day.

    Since mid-August, barrels of Bakken crude have traded for around $80, while Eagle Ford barrels have hovered just below $100.
  • Governor curtails flaring in ND.  Reuters reported that the governor of North Dakota, Jack Dalrymple, stated that oil companies may experience a production dip in October due to new rules that limit flaring in the area. Flaring is the wasteful practice of burning off natural gas during oil production. Flaring is not good for the environment or for business.

    Companies in North Dakota alone burn off billions of dollars’ worth of natural gas every day. State regulators are requiring that companies do not flare off more than 26 percent of their gas beginning October 1st. These standards will continue to evolve and continue to lower the amount of gas that is flared as time goes on. If a company does not meet the standards they will have to produce less all together.  North Dakota only flared 26 percent of its natural gas last month, reaching the October goal three months early.
  • Technology impacting the Permian Basin.  Technology has radically transformed the Permian Basin oil industry, and that transformation has found its way into the economics of both the industry and the region.

    Earlier this month, Texas Tech University released its study “Economic Impact of the Permian Basin’s Oil and Gas Industry” that revealed some eye-popping numbers. The industry is responsible for creating and sustaining 546,000 jobs and economic output of $137.8 billion throughout the Permian Basin, $42 billion in Midland County alone and adding over $71 billion to the gross state product of both Texas and New Mexico.
  • Snake handlers wanted.  The Marcellus Shale natural gas activity in Pennsylvania has created numerous job opportunities, including one that involves rattlesnakes.

    Known as snake handlers or wranglers, these are certified individuals who have the job of protecting the workers and the rattlesnakes.

    "I've never seen so many snake handlers," said Chris Urban, the non-game and endangered species coordinator for the Pennsylvania Fish and Boat Commission. "I think it's the demand."|

    For approximately 10 years the Fish and Boat Commission has recommended contractors employ a snake handler when doing work in areas where there are known timber rattlesnakes, which are candidates for the threatened species list.

    The natural gas well pad and pipeline work has increased that need, Urban said.

Rig Count

Baker Hughes Rigs count for the September 19th reporting week.  Again we believe Baker Hughes count is on the light side.

  • PA
    • Marcellus 56 rigs – unchanged
    • Utica 2 rigs – unchanged    
  • Ohio
    • Utica 42 – unchanged
  • WV
    • Marcellus 25 down 2
  • TX
    • Eagle Ford – 205 up 2
    • Permian Basin – 467 down 7
  • NM
    • Permian Basin – 94 up 1
  • ND
    • Williston – 189 up 4    
  • MT
    • Williston – 8 unchanged
  • CO
    • Niobrara – 58 up 1

TOTAL U.S. Rig Count unchanged

PA Permits for September 18, to September 25, 2014

       County            Township            E&P Company
1.    Bradford            Athens                Chesapeake
2.    Bradford            Overton               Chesapeake
3.    Bradford            Terry                   Chesapeake
4.    Bradford            Ulster                 Chesapeake
5.    Bradford            Wilmot               Chesapeake
6.    Bradford            Wysox               Chesapeake
7.    Cameron           Shippen              Seneca
8.    Clearfield           Jordan                Campbell
9.    Greene              Cumberland        Energy Corp of Am
10.    Greene            Jefferson             Vantage
11.    Lycoming         McIntyre             Anadarko
12.    Sullivan            Cherry                Chesapeake
13.    Sullivan            Forks                 Chesapeake
14.    Susquehanna   Auburn                Chesapeake
15.    Susquehanna   Great Bend          Southwestern
16.    Susquehanna   Great Bend          Southwestern
17.    Susquehanna   Great Bend          Southwestern
18.    Susquehanna   Great Bend          Southwestern
19.    Susquehanna   Liberty                 WPX
20.    Susquehanna   New Milford          Southwestern
21.    Susquehanna   New Milford          Southwestern
22.    Tioga               Chatham              Shell
23.    Tioga               Liberty                 Shell
24.    Washington     West Pike Run      Rice
25.    Washington     West Pike Run      Rice
26.    Wyoming         Lemon                  Chesapeake
27.    Wyoming         Nicholson              Chesapeake

OH Permits – week ending September 20, 2014

       County                 Township             E&P Companies

1.    Belmont               Smith                  Rice        
2.    Belmont               Smith                  Amer. Ener. Utica
3.    Belmont               Smith                  Amer. Ener. Utica
4.    Carroll                  Loudon                Chesapeake
5.    Carroll                  Loudon                Chesapeake
6.    Carroll                  Loudon                Chesapeake
7.    Carroll                  Loudon                Chesapeake
8.    Columbiana          Fairfield                Atlas Noble
9.    Columbiana          Fairfield                Atlas Noble
10.    Columbiana        Fairfield                Atlas Noble
11.    Columbiana        Fairfield                Atlas Noble
12.    Guernsey           Wills                    Eclipse Resources
13.    Guernsey           Millwood               Eclipse Resources
14.    Guernsey           Millwood               Eclipse Resources
15.    Harrison             Stock                   Eclipse Resources
16.    Harrison             Stock                   Eclipse Resources
17.    Harrison             Stock                   Eclipse Resources
18.    Monroe              Adams                 Gulfport
19.    Monroe              Adams                 Gulfport
20.    Monroe              Adams                 Gulfport
21.    Monroe              Adams                 Gulfport
22.    Noble                Marion                  Antero

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Utica Summit 2019