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Permit Activity last week.  

  • PA – 40 permits; Chesapeake in Bradford; Rice in Greene; Seneca in Cameron and McKean; PA Gen. Energy in Lycoming; CONSOL in Washington
  • OH –11 permits; PDC in Noble County.  This is interesting because PDC just sold its holding to Mountaineer Keystone

Expo/Industry events for the next few months:


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 http://midstreampa2014.com/wordpress/

     
Make your online marketing more effective. Generate more leads.

Sign up for Shale Directories’ search engine optimization webinar.  It’s FREE!    

https://attendee.gotowebinar.com/register/6121645697729324289


Governor Corbett Rally, October 26th Beaver PA

Governor Corbett has his hand on the wheel, his foot on the gas and is ready to lead Beaver County and Southwestern Pennsylvania into a new era of prosperity! 

Please Join
Chuck Betters
Representative Jim Christiana
Chuck Copeland
Rick Granati
Representative Jim Marshall
Commissioner Dennis Nichols
Senator Elder Vogel

As they welcome  Tom Corbett  Governor, Commonwealth of Pennsylvania
to Beaver County Sunday, October 26, 2014 1 pm The Gazebo at Irvine Park at the corner of Market & Third Streets | Beaver, PA
This is not just another election, Beaver County’s future depends on it!

For questions please contact Robert at rjohnson@tomcorbettforgovernor.com

OOGA Oilfield Expo and Technology Conference, Dec 3-4, Cleveland

http://ooga.org/expo/

http://www.shaledirectories.com/site/oil-and-gas-expo-information.html

Latest facts and a rumor from the Marcellus and Utica Shale

  • Thoughts for the week
  1. Who will blink first?  The game of chicken between the Saudis and U.S. E&P Companies continues.  The Saudis have stated that it will continue to produce more and keep oil prices low especially when selling to Asia.  The Saudis cannot afford to lose market share which will have negative impact on prices and its position in the oil production world long term.  

    We will be watching the U.S. rig count to see if Saudis’ strategy will force U.S. companies to close in some wells.  This is only a one-week snap shot, but the Baker-Hughes U.S. rig count last week was up 8 rigs to 1930.
     
  2. Utica Summit II.  We held our second annual Utica Summit II this past Tuesday at Kent State Stark.  We will provide more in-depth information on the presentation next week, but here are a few of the highlights:
  • The current Utica Shale production could support four cracker plants.
  • The biggest opportunities from the Shale Play game changer are going to be downstream.  The U.S. will have considerable price advantage over the rest of the world in manufacturing and chemicals/plastics.
  • The U.S. has so much oil, gas and coal reserves it’s unbelievable.
     
  • Technically Recoverable Resources
    • 120 years of Nat Gas
    • 206 Years of Oil
    • 464 years of Coal
  • In-place Resources
    • 586 years of Nat Gas
    • 536 years of oil
    • 9,844 years of coal

Institute for Energy Resources Analysis of U.S. Government Data

  • Chesapeake continues to unwind.  Chesapeake Energy Corporation announced that it has executed a Purchase and Sale Agreement to sell assets in the Southern Marcellus Shale and a portion of the Eastern Utica Shale in West Virginia to Southwestern Energy Company for aggregate proceeds of $5.375 billion. The transaction, which is subject to certain customary closing conditions, including the receipt of third-party consents, is expected to close in the fourth quarter of 2014.

    Chesapeake has agreed to sell approximately 413,000 net acres and approximately 1,500 wells in Northern West Virginia and Southern Pennsylvania, of which 435 are in the Marcellus and Utica formations, along with related property, plant and equipment. Average net daily production from these properties was approximately 56,000 barrels of oil equivalent (boe) during the month of September, consisting of 184,000 Mcf of gas, 20,000 barrels of natural gas liquids and 5,000 barrels of condensate. As of December 31, 2013, net proved reserves associated with these properties were approximately 221 million barrels of oil equivalent (mmboe).
     
  • NY may be opening up.  Anadarko Petroleum Corp and EOG Resources might be one step closer to tapping New York State's Marcellus Shale. Bloomberg reported that the two companies have reached a deal to disclose information about fracking to the public with New York State Attorney General Eric Schneiderman.

    The deal will not lift New York State's fracking ban, but it will require EOG and Anadarko to disclose data about fracking risks in SEC filings. The data released will include analyses of the effects of fracking on well water and potential risks from fracking. The agreement will end a probe that Schneiderman's office was conducting into oil and gas drillers.

    It is not clear whether the deal will hasten Democratic Governor Andrew Cuomo's decision on a six-year moratorium on fracking in the Empire State that has been in place since 2008. The Attorney General's office refused to say whether it was working on similar deals with other oil and gas drillers.
     
  • Badlands Cracker Plant.  North Dakota Governor Jack Dalrymple and Badlands NGL's, LLC Chairman and Chief Executive Officer William Jeffrey Gilliam announced new polyethylene (PE) manufacturing facility to be built in North Dakota. At an estimated $4 billion, this will be the large private sector investment made in state history. The value-added manufacturing facility will use North Dakota's abundant supply of natural gas liquid ('NGL') sourced ethane gas coming out of the Williston Basin as a byproduct of oil production.

    The project will significantly reduce the amount of natural gas flared into the atmosphere, which has been a critical area of focus for State and industry leaders. The Badlands facility will convert the ethane to polyethylene which is used to make a wide variety of end use consumer and industrial products. The facility will be able to produce 1.5 million metric tons of polyethylene, or 3.3 billion pounds annually, and employ in excess of 500 highly trained persons in manufacturing, marketing, administrative, safety, financial and executive positions. The project will take at least three years for full development.

    The company intends to market the majority of the polyethylene products to U.S. markets, which are closer to North Dakota than a Gulf Coast PE facility, but product will also find its way to global markets, including Southeast Asia. In this instance, North Dakota's location is a benefit in that product can be delivered to world markets through Seattle or Vancouver and Atlantic Ports much more efficiently and economically than comparable Gulf Coast facilities.
     
  • The Marcellus keeps on giving.  A new study by the Oil and Natural Gas Industry Labor-Management Committee showed that industry spending in the Marcellus area on construction and maintenance grew over 60% between 2012 and 2013, reaching $5 billion, resulting in a 40% increase in construction jobs in eight trades.

    Louis Finkel, American Petroleum Institute executive vice president, said the organization welcomes the news in a statement.

    “This study reaffirms that responsible domestic energy production is fueling our economic recovery,” said Finkel. “We need to fully embrace this energy renaissance and develop the affordable reliable energy all Americans need and want.

    “The U.S. energy boom is lifting up the middle class and lowering costs for American families,” said Finkel. “Workers in our industry are earning about seven times the federal minimum wage. These are good paying jobs and we need more of them.

    “We must seize this great American made opportunity by enacting smart energy policies. Energy is not a partisan issue; Washington needs to reject duplicative regulations, open the door to U.S. energy exports, and eliminate counterproductive fuel mandates.”
     
  • Antero 3rd Qtr. Update.  Marcellus Shale —Antero has utilized shorter stage length (SSL) completions on virtually all of its 93 horizontal Marcellus wells completed and placed on line during 2014.  Of the 93 wells completed in 2014 utilizing SSL completions, 84 have been on line for more than 30 days and had an average 30-day rate of 13.0 MMcfe/d while rejecting ethane (14% liquids).  The average lateral length for the 84 wells was approximately 7,900 feet.

    Antero is currently operating 15 drilling rigs in the Marcellus Shale play including four intermediate rigs.  Six of these drilling rigs are powered by either natural gas from producing wells in the field or liquefied natural gas (LNG).  Antero implemented a program two years ago to convert drilling rigs to natural gas from the field or LNG in order to reduce emissions, realize fuel savings and minimize diesel tanker truck traffic.

    The Company has 91 gross (90 net) horizontal wells either in the process of drilling, completing or waiting on completion as well as two gross (two net) wells waiting on pipeline in the Marcellus.  Antero has five dedicated completion crews and three spot completion crews currently working in West Virginia.

    Utica Shale –Antero has completed and placed on line 30 wells in the Utica Shale during 2014.  Of the 30 wells completed in 2014, 25 have been on line for more than 30 days and had an average 30-day rate of 15 MMcfe/d while rejecting ethane (44% liquids).  The average lateral length for the 25 wells was approximately 7,600 feet.

    Antero is currently operating seven drilling rigs in the Utica Shale play including one intermediate rig.  Five of these drilling rigs are powered by either natural gas or LNG.

    The Company has 29 gross (26 net) horizontal wells either in the process of drilling, completing or waiting on completion.  Antero currently has one full time dedicated completion crew and one spot completion crew working in Ohio.
     
  • Marcellus moving to #1.  The U.S. Energy Information Administration's Drilling Productivity Report, released Oct. 14, revealed that the Marcellus Shale play is anticipated to produce more gas than other reported regions in November.

    The Marcellus region is expected to produce 16,045 million cubic feet of gas per day in November 2014, reflecting a 217 mcf/day increase from October, making it both the highest-producing region among the Utica, Bakken, Eagle Ford, Haynesville, Niobrara and Permian basins.

    New-well gas production per rig is anticipated to increase across all regions between October and November 2014, with the Marcellus and Utica seeing potential increases of 39 thousand cubic feet per day and 114 tcf/day, respectively. The Marcellus play has the highest expected production in November over all the other regions, at 7,946 tcf/day.

    With the exception of the Haynesville region, which isn't expected to change, new-well oil production per rig is anticipated to across all reported regions, including the Marcellus shale play, which is expected to see an increase of 31 to 32 barrels per day, and Utica shale play, which will increase from 183 to 190 barrels per day.
     
  • Utica can support 4 cracker plants.  Ohio’s Utica shale in generating enough liquid ethane to support new so-called cracker plants.

    That assessment came Tuesday from Cleveland State University economist Iryna Lendel, a speaker at the day-long Utica Summit II at Kent State University’s Stark Campus.

    At least four cracker cracks to turn ethane into ethylene, a key ingredient in making plastic, have been proposed in Ohio, West Virginia and western Pennsylvania.

    The Utica and Marcellus shale natural gas wells in those three states are producing enough ethane to support three large cracker plants, said Lendel, whose comments were based on a preliminary economic assessment of the Utica shale. The report is expected to be completed by December.

    About 60 percent of the liquids derived from Utica wells are ethane, she said.

    Such plants will cost from $1 billion for a small one to $7 billion for the largest. It would take five to seven years before the first cracker plant would likely open in the Appalachian Basin, she said.

    The latest oil and gas midstream spinoff has raised $368 million in its initial public offering.
     
  • More funding for midstream building out.  Dominion Midstream Partners LP, a master limited partnership, raised $368 million, according to Renaissance Capital.

    Its offering exceeded its expectations. The company had planned to offer 17.5 million shares priced between $19 and $21 each, as I reported, for $350 million.

    It sold the 17.5 million units at the high mark of $21.

    The company is a spinoff of Dominion Resources Inc. (NYSE:D), and plans to use the raised money to fund its $3.8 billion Cove Point liquefied natural gas terminal in Maryland. That facility is just the second to be approved to export natural gas. Dominion expects the project to start sending gas to India and Japan, much of it from the Utica and Marcellus shale plays, in 2017.

    It will be listed on the New York Stock Exchange under the “DM” ticker symbol.
     
  • Anadarko adjusting its land in the Utica.  Anadarko assigns all its non-core acreage and all wells in the Utica to Artex Energy Group LLC except a small area in the SE OH.  (RUMOR)
     
  • Range in Allegheny County, PA.  Range Resources and Allegheny County on Thursday signed a lease that authorizes the Fort Worth-based energy company to drill for natural gas under Deer Lakes Park in West Deer and Frazer, according to a notice sent to county council members.

    The county received $4.7 million in bonus payments and the first $600,000 installment of a $3 million Parks Improvement Fund on Thursday, county spokeswoman Amie Downs said.

    County Executive Rich Fitzgerald told council members Tuesday that nearly $3.2 million of the money would pay for improvements in the county’s nine parks this year. Deer Lakes Park will receive $2.13 million, and $2 million will go into the county’s reserves, Fitzgerald said.
     
  • New player in the Marcellus and Utica.  Wexford-based Mountaineer Keystone LLC has finalized its acquisition of the equity interests in PDC Mountaineer LLC, a joint venture formed to explore the Marcellus Shale.

    PDC Mountaineer was created in 2009 by Colorado-based PDC Energy and private equity firm Lime Rock Partners. Keystone Mountaineer, which drilled its first Utica and Marcellus wells in 2012, operates in northern West Virginia and eastern Ohio.

    Keystone Mountaineer said the deal adds more than 131,000 net acres to its West Virginia Marcellus Shale position.

    "Our combined footprint offers immediate drilling opportunity, ample natural gas takeaway, and accelerates our five-year development plan, which includes the drilling of more than 400 wells in our core development area and the build out of significant gathering and midstream assets," said CEO and President Robert Kozel in a statement.

    As part of the deal, the joint venture’s midstream assets -- 24 miles of high-pressure gathering lines -– were sold to MK Midstream Holdings LLC, a joint venture in which Mountaineer Keystone has a 50-percent stake.

    The aggregate sale price was $500 million, according to Mountaineer Keystone. The company is a First Reserve portfolio company. First Reserve is a private equity firm exclusively focused on energy.
     
  • Eagle Ford and Permian output up again.  The Eagle Ford Shale is expected to make 1.61 million barrels of oil per day in November, up 42 percent from the year before, according to a new government report.

    The field is making around 1.58 million barrels of oil daily this month, according to the U.S. Energy Information Administration.

    The EIA shows production from the Eagle Ford and other major shale fields increasing even as the price of crude oil dips.

    The Permian Basin remains the nation’s most prolific oil field. It’s expected to make 1.8 million daily barrels of oil in November, up 30 percent from the same month last year.

    The Bakken Shale in North Dakota and Montana is expected to make 1.19 million barrels of oil daily, up 18 percent from last November, according to the data.

    Eagle Ford operators also continue to become more efficient. The EIA’s Drilling Productivity Report said new-well oil production per drilling rig is at 532 barrels per day this month. It should increase to 540 barrels of oil daily next month.

    New-well oil production per rig in the Bakken Shale in North Dakota and Montana is expected to be 530 barrels daily this month, increasing to 537 barrels daily in November.

    In the Permian Basin, the productivity measure is expected to rise from 172 to 176 barrels daily in November.

    The EIA’s monthly report focuses on the seven most prolific oil and gas fields in the U.S. – the Permian, Eagle Ford, Bakken, Marcellus, Haynesville, Niobrara and Utica. Its measure of oil production includes both crude oil and condensate.
     
  • More changes coming to the Eagle Ford.  Reliance Industries is looking to sell its 45 per cent stake in the Eagle Ford basin shale oil and gas venture in the US for an estimated USD 4.5 billion.

    RIL, which bought 45 per cent interest in Pioneer Natural Resources Co's Eagle Ford shale formation of south Texas for USD 1.3 billion, is working with Citigroup Inc and Bank of America Merrill Lynch to find a buyer, industry sources said.
     
  • Rex moving quickly.  Rex has opened the permitting process for two previously Shell well pads in Butler County, PA.  The Coopers Lake Pad in Worth Township and the Caporali Pad in Clay Township in Butler County, PA.  (RUMOR)
     
  • Utica Investments keep rising.  Ohio has seen $3.5 billion in oil and gas-related investment in the past six months.

    That’s according to a report from Law firm Bricker & Eckler LLP’s energy group, which counts $22.3 billion in shale-related projects since it started keeping track in 2013, up from $18.8 billion in the firm’s last accounting in April.

    The biggest driver is infrastructure, the pipelines and associated projects that eastern Ohio’s Utica shale play has craved since exploration and production ramped up in recent years. The state is flush with wells waiting to be hooked up for processing and transportation.

    “I’m not surprised about the type of projects. I’m always surprised about the size, scope and dollar amount,” said Matt Warnock, an oil and gas attorney with the law firm.

    The biggest project announced since April is one from a close-to-home company. NiSource Inc., parent company of Columbus’ Columbia Gas of Ohio, said last month that it would invest $1.75 billion in Leach Xpress, a 160-mile pipeline in Ohio and West Virginia to support gas development in Ohio, northern West Virginia and western Pennsylvania.

    The other projects with announced totals are smaller than the NiSource project, and many others gathered by Bricker have unknown costs.

    Another big recent project is a $1 billion dollar ethane cracker plant in Monroe County.

Rig Count

  • Baker Hughes Rigs count for the October 10th reporting week.  Again we believe Baker Hughes count is on the light side
    • PA
      • Marcellus 51 rigs – down 3
      • Utica 4 rigs – up 1    
    • Ohio
      • Utica 42 – up  2
    • WV
      • Marcellus 30 up 2
    • TX
      • Eagle Ford – 211 up 1
      • Permian Basin – 466 up 5
    • NM
      • Permian Basin – 96 up 1
    • ND
      • Williston – 182 down 7
    • MT
      • Williston – 11 up 3
    • CO
      • Niobrara – 57 down 2
         
    • TOTAL U.S. Rig Count 1930 up 8

PA Permits for October 9, to October 16, 2014

       County              Township            E&P Company
1.    Bradford              Leroy                  Chesapeake
2.    Bradford              Monroe               Chesapeake
3.    Bradford              Monroe               Chesapeake
4.    Bradford              Monroe               Chesapaeke
5.    Bradford              Overton               Chesapeake
6.    Bradford              Tuscarora            Chesapeake
7.    Cameron             Shippen              Seneca
8.    Cameron              Shippen             Seneca
9.    Cameron              Shippen             Seneca
10.    Cameron            Shippen             Seneca’
11.    Cameron            Shippen             Seneca
12.    Cameron            Shippen             Seneca
13.    Cameron            Shippen             Seneca
14.    Greene              Aleppo               Rice
15.    Greene              Aleppo               Rice
16.    Greene              Aleppo               Rice
17.    Greene              Aleppo               Rice
18.    Greene              Franklin             Vantage
19.    Greene              Richhill              CONSOL
20.    Lycoming          McHenry            PA Gen Energy
21.    Lycoming          McHenry            PA Gen Energy
22.    Lycoming          McHenry            PA Gen Energy
23.    Lycoming          McHenry            PA Gen Energy
24.    McKean            Norwich             Seneca
25.    McKean            Norwich             Seneca
26.    McKean            Norwich             Seneca
27.    McKean            Norwich             Seneca
28.    McKean            Norwich             Seneca
29.    McKean            Norwich             Seneca
30.    Susquehanna    Middleton           WPX
31.    Tioga                Chatham            Shell
32.    Washington       Buffalo               Range
33.    Washington       Chartiers            Range
34.    Washington       East Finley        CONSOL
35.    Washington       East Finley        CONSOL
36.    Washington       East Finley        CONSOL
37.    Washington       East Finley        CONSOL
38.    Washington       East Finley        CONOL
39.    Washington       East Finley        CONOL
40.    Washington       Mt. Pleasant      Range        

OH Permits – week ending October 11th, 2014

      County            Township              E&P Companies

1.    Carroll                Harrison              Rex
2.    Carroll                Harrison              Rex
3.    Harrison             German              Chesapeake
4.    Monroe              Switzerland         CONSOL
5.    Noble                Seneca                PDC
6.    Noble                Seneca                PDC
7.    Noble                Seneca                PDC
8.    Noble                Seneca                PDC
9.    Noble                Seneca                PDC
10.    Noble              Seneca                PDC
11.    Noble              Seneca                PDC


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