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Permit Activity last week.

 

  • PA – 23 permits; Widespread permitting – 9 E&P Companies receive permits in 9 counties
  • OH –29 permits; 14 permits in Carroll, it’s back! Chesapeake is also back 13 permits.
     

Expo/Industry events for the next few months:


Midstream PA 2014, November 18TH, Penn State
PA’s first midstream conference.  Speakers from Williams, UGI and Sunoco Logistics.  You will learn what’s coming in midstream in 2015. Limited sponsorships and seating.  It will be a great networking opportunity.
 
There are only a few seats left.  Register now to reserve your seat.  When we sell out, there will be a waiting list where you can sign up.  There will be no walk up registrations.

http://midstreampa2014.com/wordpress/


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

Look for an exciting program that will provide information for both conventional operators and shale producers.

Chesapeake, Enervest and Ergon have become platinum sponsors.  The Expo is certainly gaining momentum.  

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. Is OH ready to explode?

    In looking at ODNR’s weekly, report there are 29 permits for building well pads.  It shows that there are 51 rigs in Ohio.  Baker Hughes reports that there are 41 working rigs in OH which means 10 rigs are sitting around waiting to drill.

    When you read further in Facts & Rumors, you’ll see that Gulfport is finding it hard to expand in the Utica.  While Gulfport was making those comments, EV Energy Partners stated it will be selling all of its Utica Shale assets.  Stay tuned it’s going to be an interesting year in Ohio.
     
  2. Halliburton is in talk to purchase Baker Hughes

    The buzz on Wall Street on Friday was the Halliburton – Baker Hughes deal.  There are a number of hypotheses for deal
  • The price of oil is going to stay down so companies have to consolidate.
  • With the price of energy stocks down, it’s a good opportunity for Halliburton to bulk up to compete with Schlumberger.
  • If the deal goes through, the FTC will make Baker Hughes sell off a number of its business in order for the deal to be approved.

    The question you are probably asking yourself, “What happens to our MSA with both companies or what happens to my MSA with Baker Hughes?”   
     
  • Warren Buffet may buy MarkWest Partners.  (WALL STREET RUMOR)
     
  • UGI moving gas in Tioga County, PA.  UGI Utilities, Inc. recently became the first of Pennsylvania’s natural gas utilities to connect its distribution route with the Utica Shale wells.

    The direct connection runs between a Utica Shale well, two Marcellus Shale wells in northern Tioga County and a UGI pipeline.

    The interconnection required that the company construct a new meter and regulator station system. The system expanded the supply of natural gas available to customers in Tioga and Potter counties. It can run approximately 14,000 dekatherms of natural gas into UGI’s pipelines daily.

    The natural gas resources in these shale wells can meet the energy needs of more than 50,000 households in UGI’s service area.

    “UGI continues to explore opportunities to bring affordable, local natural gas to our customers throughout Pennsylvania,” Kelly Beaver, the vice president of supply for UGI, said. “More than 70 percent of the natural gas we deliver through our system is produced in the Marcellus Shale region. We are pleased to add volumes of lower-cost Utica Shale natural gas to our portfolio as another supply source.”

    The U.S. Geological Survey estimates that the Utica Shale could supply 38 trillion cubic feet of natural gas, 208 million barrels of natural gas liquids and approximately 940 million barrels of crude oil.
     
  • Antero has 22 rigs in Appalachian. The company’s August update shows promising numbers for possible drilling sites within the Utica Shale region of Ohio, West Virginia and Pennsylvania.

    Antero predicts there are up to 835 Utica shale drill sites on its land, and after combining possible drilling locations in Ohio, West Virginia and Pennsylvania, there are a possible 5,011 locations.

    At 22 rigs operating rigs, Antero is the most active driller in Appalachia and has a 94 percent organic production growth for 2Q 2014 over 2Q 2013. The company is the most active Marcellus Shale driller with 15 rigs and the second most active Utica Shale driller with seven rigs.

    Twenty-seven percent of the company’s capital budget of $3.7 billion will cover Utica shale while the rest will cover Marcellus shale.
     
  • Rice Energy 3rd Qtr. Update.  A boost in natural gas production from the Marcellus and Utica shales helped Rice Energy Inc. cut its losses in the latest quarter.

    The Cecil-based company on Wednesday reported a net loss of $6.9 million or 5 cents per share during the third quarter, an improvement from the $33.7 million or 38 cents per share it incurred during the same period last year.

    Rice more than tripled revenue during the quarter to $79.1 million, from $23.7 million, but expenses also increased as it secured nearly 10,000 acres for drilling and extended gas and water pipelines.

    The company brought online five Marcellus wells in Pennsylvania, bringing that total to 64. It's operating two drilling rigs in the area. In the Utica shale in Ohio, Rice turned on its second and third wells in September.

    CEO Daniel J. Rice IV said he expects the company to have a big fourth quarter by bringing online 17 more wells by the end of the year.

    Rice drills 100th well

    Rice Energy, during its third-quarter earnings report, announced that the company has drilled its 100th horizontal shale-gas well, according to the Pittsburgh Business Times.

    Daniel J. Rice IV, Rice Energy CEO, said the well, drilled in the Marcellus Sale formation, has a lateral length of 10,200 feet and was drilled from the kick off point to the target in less than five days. He said, “Not a lot of companies have the good fortune to drill 100 wells, so we’re very appreciative of our team that got us to this stage.”

    The company has one horizontal rig operating in Ohio and two in Pennsylvania. A fourth well is in the works and will be exploring the Utica shale where the company projects to have five producing wells in place before the year’s end.

    The majority of Rice Energy’s acreage in Ohio is in Belmont County. According to Rice, the county has more rigs in operation than anyplace else in the Appalachia. The company plans to begin drilling its first Utica well in Pennsylvania’s Greene County this spring and will begin testing by the end of the year.
     
  • Rice Midstream Partners IPO raises money for midstream. Rice Midstream Partners LP, a formed by Rice Energy to own natural gas midstream assets in the Marcellus Shale, filed on Thursday with the SEC to raise up to $425 million in an initial public offering.
     
  • Gulfport trying to expand in the Utica.  One of the most active drillers in Ohio’s Utica Shale is struggling to find space to expand its operations, according to a report by Columbus Business First.

    Gulfport Energy Corp., after adding 500 acres to its assets in August, has 184,000 acres under lease in the area. During the third quarter the company brought 19 wells online and doubled its projected earnings per share, prompting one stock analyst to report that Gulfport “has its mojo back.”

    The company is happy with its current acreage holdings and has enough available to support years of drilling activity. Despite its growth, the company is still seeking to expand into eastern Ohio, but availability of unleased land in the region is limited.

    Due to the scant availability of new acreage, Gulfport will be spending much less capital on new leases when compared to its activity in 2014. The company has decided to not release its investor guidance report until the beginning of next year. In a conversation with analysts, Gulfport’s Chief Executive Officer Michael Moore stated, “Quite frankly … there’s just not much left in the core of the play.”

    The majority of the company’s leased acreage is in a dry gas section of the Utica. Only six percent of its acreage is in the Utica’s oil holding formation, which has yet to be explored due to declining prices.  
     
  • Stone Energy getting good results.  Chairman, President and Chief Executive Officer David Welch stated, “…In Appalachia, we have finished drilling our Utica test well and expect to flow first production within the next few weeks. Due to efficiencies, we now expect to drill over 35 wells in our Marcellus program this year.”
     
  • EV Energy Partners to sell thousands of acres in OH.  Texas-based EV Energy Partners is preparing to sell off its Utica shale assets in eastern Ohio in 2015, along with its interest in processing facilities.

    There has been "enough drilling activity and consistent result to de-risk our assets and acreage," said John Walker, the company’s executive chairman.

    The value of the company’s Utica shale leases have grown significantly, he said in an earnings call with analysts and the media earlier this week.

    The company intends to kick off a serious sale effort in January to sell off its joint venture acreage with Chesapeake Energy and Total SA in 10 Ohio counties, plus other leases held by the company, he said.

    The company wants to sell about 120,000 acres within the 660,000-acre joint venture. That includes about 55,000 acres in Carroll County.

    It also intends to seek a buyer for its 21 percent interest in Utica East Ohio that operates natural gas processing plants in Columbiana and Carroll counties and a liquids-separating plant in Harrison County.

    Last month, EV Energy Partners sold its 9 percent interest in Ohio’s Cardinal Gas Services to two South Korean companies for $162 million.

    EV Energy Partners, a publicly traded company that is part of privately held EnerVest Ltd., has said for some time that it intends to sell off Utica assets to monetize the holdings for its institutional investors. The company has been marketing about 335,000 acres in Ohio since 2013.

    The EnerVest companies are one of Ohio’s largest oil and gas companies with 8,700 vertical wells in Ohio. They were the largest producer from traditional gas and oil wells in Ohio and generated 25 percent of Ohio’s natural gas prior to the Utica shale boom. They control about 900,000 acres in Ohio.

    In other news, EV Energy Partners said production could begin in December on a much-watched Utica oil well in Tuscarawas County.

    The company drilled the experimental well with eight other industry partners, Walker said.

    "This is a test of what could be EnerVest and EVEP’s most valuable asset in the Utica," he said.

    Getting oil from the Utica shale has proven to be difficult for drillers, to date.

    That well near Uhrichsville is being hydraulically fractured or fracked with liquid butane and mineral oil. That should be completed in two weeks.

    "We’re excited but cautious as we are bringing new technology to bear in this process," said company president and CEO Mark Houser. "We are in the middle of the completion operations and have completed five of the 20 (fracking) stages so far."

    A full review of the well will be offered in the next few months, he said.

    The oil window covers all or parts of Portage, Stark, Trumbull, Tuscarawas, Holmes, Coshocton, Guernsey, Muskingum, Perry, Morgan, Athens, Vinton and Hocking counties.

    EV Energy Partners is also getting about 80 barrels of oil per day plus natural gas from four Stark County horizontal wells that were drilled into the shallow Clinton sandstone. A fifth well is not yet in production.

    Drilling each well costs about $2.6 million. Each well is projected to produce about 150,000 barrels of oil equivalents. The wells could generate 20 percent return on its investment at $80 per barrel for crude oil.

    The company said the East Canton oil field where more than 4,000 wells have been drilled since 1947 has an estimated 1.5 billion barrels of oil and only 7 percent has been recovered.

    The field in Stark, Carroll and Tuscarawas counties covers about 214,000 acres and EnerVest companies control half of it, the company said.

    It says it has identified 70 potential drilling sites and that number could grow if the wells are successful, Houser said.
     
  • Tug Hill Operating pays $100 million to drill in WV.  Mineral owners in Marshall and Ohio counties will receive more than $100 million worth of economic stimulus from signing Marcellus Shale lease agreements with driller Tug Hill Operating.
     
  • North Dakota get $5 million for drilling rights.  A quarterly state auction for oil drilling rights on North Dakota state land has fetched more than $5 million.

    More than 12,000 mineral acres in nine counties were auctioned last week.

    About 7,500 acres were auctioned for $2.9 million in McKenzie County. The remaining acreage was in Billings, Bottineau, Dunn, Hettinger, Mountrail, Renville and Williams counties.

    Western North Dakota has seen a massive amount of economic and industrial growth recently, as a result of a boom in energy production. The population of many of the affected towns has more than doubled in the past 5 years.
     
  • More leases being written in Northern PA.  One of the most-drilled Marcellus Shale counties in Pennsylvania has been Tioga County –just about dead center (horizontally) and at the top (vertically) of the state, sharing a border with New York State. Four to five years ago there was a leasing frenzy in Tioga and Potter counties, followed by a lot of drilling in Tioga and a little bit of drilling in Potter. Leasing activity all but stopped – then something really interesting happened.

    Utica Shale Leases Recently, Shell reported drilling six Utica Shale wells in Tioga County, the first two of which have turned in truly impressive production rates. Apparently, because of Shell’s success, leasing activity in Tioga and Potter (and even in McKean County) has once again picked up the pace – this time for Utica Shale leases, as a story in the Potter Leader-Enterprise reveals:
     
    • After a quiet lull, activity surrounding natural gas exploration and production is picking up in Potter and Tioga counties. And, once again, the excitement is over a shale formation, this time the Utica shale.
       
    • Located a few thousand feet below the Marcellus shale, which caused a leasing frenzy in Pennsylvania a number of years back, the Utica has become the new drilling target after horizontal drilling and hydraulic fracturing procedures made the Marcellus the world’s largest natural gas field.
       
    • Initial results for Utica shale gas production are promising, with Royal Dutch Shell announcing in September that two Utica well drilled in Tioga County have seen production rates of 11.2 and 26.5 million cubic feet (Mmcf) per day. In October 2013, Seneca Resources reported a peak production rate of 8.5 Mmcf at its Utica well in McKean County.
       
    • Jim Addison, president and CEO of Travis Peak Resources, said the Utica is one of the most prolific plays going right now. His company, which is based in Austin, Texas, is expecting to lease 25,000 to 50,000 acres in Potter and Tioga counties.
       
  • Senate to vote to speed up LNG export applications. A Senate committee will vote this week on a bill that would speed the federal government’s approval of applications to export liquefied natural gas (LNG).

    The legislation, sponsored by Sen. John Hoeven (R-N.D.), would set a limit on the time the Energy Department could take to consider whether a proposed export project is in the country’s interest.

    The Senate Energy and Natural Resources Committee will consider the proposal Thursday along with 18 other minor bills on subjects like national park boundaries, wilderness areas and land swaps.
     
  • ETP making major moves in the Eagle Ford.  Energy Transfer Partners LP (ETP), Dallas, has reached long-term gas gathering and processing agreements with producers in the Eagle Ford in South Texas and Eaglebine in southeast Texas. These agreements, said the company, have prompted it to begin building two cryogenic gas processing plants and additional gathering pipelines.

    East of the company’s La Grange, Tex., plant, ETP will build the 200-MMcfd East Texas gas plant scheduled to be in service by fourth-quarter 2015.

    The 70-mile, 24-in. Volunteer Pipeline will deliver as much as 200 MMcfd of rich gas initially to the East Texas plant with resulting NGLs and residue gas delivered to Lone Star NGL LLC’s pipeline and ETP’s Southeast Bossier 42-in. gas pipeline.

    The pipeline will be expandable to more than 400 MMcfd with addition of compression, the company said, and originate in eastern Brazos County, Tex., at an interconnection with ETP’s Southeast Texas gathering system.

    That system consists of more than 5,000 miles of pipe and 80,000 hp of compression and will extend to ETP’s new East Texas plant. The pipeline is also to be built and in service by fourth-quarter 2015.

    ETP also has begun building another 200-MMcfd cryogenic plant in the Eagle Ford that will be online by June 2015. It will be fully subscribed once it is on line, the company said, and deliver residue gas into ETP’s HPL intrastate pipeline system and the NGLs into Lone Star NGL’s pipeline system.

Rig Count

  • Baker Hughes Rigs count for the November 7th reporting week.  Again we believe Baker Hughes count is on the light side
     
    • PA
      • Marcellus 52 rigs – up 1
      • Utica 4 rigs – unchanged    
    • Ohio
      • Utica 41 – down 1WV
      • Marcellus 30 down 3
    • TX
      • Eagle Ford – 212 down 6
      • Permian Basin – 475 up 9
    • NM
      • Permian Basin – 92 down 4
    • ND
      • Williston – 181 up 1
    • MT
      • Williston – 11 unchanged
    • CO
      • Niobrara – 57 unchanged
         
  • TOTAL U.S. Rig Count 1925

PA Permits for November 6, to November 13, 2014

      County              Township         E&P Companies

1.    Beaver               Industry Boro    Chesapeake
2.    Beaver               South Beaver    Chesapeake
3.    Bradford             Albany             Chesapeake
4.    Bradford             Asylum            Chesapeake
5.    Bradford             Overton            Chesapeake
6.    Butler                 Clearfield         XTO
7.    Butler                 Donegal           XTO
8.    Butler                 Donegal           XTO
9.    Greene               Aleppo             Rice
10.    McKean            Norwich           Seneca
11.    McKean            Norwich            Seneca
12.    McKean            Norwich            Seneca
13.    Susquehanna     Franklin            WPX
14.    Susquehanna    Jackson            Southwestern
15.    Susquehanna    New Milford       Southwestern
16.    Tioga                Delmar              Seneca
17.    Washington      Buffalo               Range
18.    Washington      Buffalo               Range
19.    Washington      Carroll               EQT
20.    Washington      Mt. Pleasant      Range
21.    Washington      Mt. Pleasant      Range
22.    Washington      Robinson           Range
23.    Westmoreland  Washington       CONSOL

OH Permits – week ending November 8, 2014

       County              Township           E&P Companies

1.    Belmont              York                   XTO
2.    Belmont              Richland             Amer. Ener. Utica
3.    Belmont              Richland             Amer. Ener. Utica
4.    Belmont              Richland             Amer. Ener. Utica
5.    Belmont              Somerset            Gulfport
6.    Belmont              Somerset            Gulfport
7.    Belmont              Somerset            Gulfport
8.    Belmont              Somerset            Gulfport
9.    Carroll                  Fox                    Chesapeake            
10.    Carroll                Fox                    Chesapeake
11.    Carroll                Fox                    Chesapeake
12.    Carroll                Fox                    Chesapeake
13.    Carroll                Fox                    Chesapeake
14.    Carroll                Fox                    Chesapeake
15.    Carroll                Fox                    Chesapeake
16.    Carroll                Fox                    Chesapeake
17.    Carroll                Fox                    Chesapeake
18.    Carroll                Washington        Chesapeake
19.    Carroll                Washington        Chesapeake
20.    Carroll                Washington        Chesapeake
21.    Carroll                Washington        Chesapeake
22.    Carroll                Washington        Chesapeake
23.    Guernsey           Millwood             Rex
24.    Guernsey           Millwood             Rex
25.    Guernsey           Millwood             Rex
26.    Guernsey           Millwood             Rex
27.    Harrison             Washington        Chevron
28.    Monroe              Washington        Amer. Ener. Utica
29.    Monroe              Washington        Amer. Ener. Utica

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Joe Barone jbarone@shaledirectories.com 610.764.1232
Vera Anderson vera@shaledirectories.com 570.337.7149

 

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