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Permit Activity last week.  

  • PA – 13 permits; EQT in Clearfield County;
  • OH –8 permits; American Energy Utica in Guernsey; Chesapeake in Harrison

Expo/Industry events for the next few months:

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

I look forward to seeing a number of you next week.  Visit us at booth #300.  OOGA has a great program planned with a number of very informative presentations and networking event on Wednesday evening.

Latest facts and a rumor from the Marcellus and Utica Shale

Thoughts for the week.

1. OOGA’s Expo and Technical Conference is just a few days away.  Kudos to OOGA for putting together a solid program that looks forward and identifies the changes that are coming to drilling in Ohio.

  • Technical Conference Presentations Include:
  • Management & Disposal Options of Shale Drill Cuttings & Brines - Ohio One Size Does Not Fit All -- Ababu Gelaye, and Roy Stanley, Civil & Environmental Consultants, Inc.
  • Delineating the Utica-Point Pleasant Play in Ohio -- Irene Haas,  Wunderlich Securities
  • Practical Risk Mitigation - Integration of a Foam Firefighting System into Large Scale Fracturing Operations -- Frank Leeper and Ralph Boley, Producers Service Corporation
  • Learning to Horizontally Drill a Depleted Clinton Sandstone Reservoir-- Greg Mason, The Energy Cooperative
  • Horizontal Drilling in Conventional Reservoirs -- Mark Lytle, Buckeye Oil Producing
  • AccessFrac - Proven Diversion Technology for Horizontal Completions --Ryan Loya,  Halliburton Corporation
  • Taking the Guesswork Out of Enhanced Oil Recovery -- Mark Moody, Dr. Srikanta Mishra, Battelle
  • Seismicity -- Tom Tomastik,  ALL Consulting
  • Hot Works and the Increase of Flash Fires -- Sarah Ghezzi, Ohio Bureau of Workers' Compensation, Charlie Dixon, Ohio Oil and Gas Energy Education Program
  • The LPG Stimulation Process -- Roger Meyers, Atlas Energy, L.P.
  • The event will host more than 125 exhibitors. See who is exhibiting with the interactive Trade Show Floor Plan.

2. OPEC does not cut production.  On Thursday, while we enjoying the Thanksgiving, OPEC was deciding not to cut production.  Oil prices dropped quickly with WTI going below $70 and Brent going below $75.  After listening to numerous “experts” on CNBC, there is no real consensus as to what the impact will be, but here are some thoughts:

  • The Saudis are refusing to cut because they want to slow oil production in the U.S.  We’ve been reporting similar stories the last few weeks.
  • The price decline could be short-lived.
  • It is not likely to curtail current oil production in the U.S., but may impact the growth of oil production.
  • It is much easier to shut down and restart a shale oil well than a conventional oil well.
  • The price drop in oil does not have an effect on nat gas prices which is only impacted by weather.  
  • Nat Gas prices should stay up if it’s a cold weather.  The US Energy Information Administration (EIA) reported US natural gas stocksdropped by 17 billion cubic feet (Bcf) for the week ended Nov 14.

    That compared with an expected increase of 38 Bcf anticipated by analysts. The five-year average injection for the week is around 16 Bcf.

    Stockpiles are roughly 5.3% below their levels of a year ago and about 6.4% below the five-year average, Shale Media Group understands.

    Cabot Nat Gas going to New York and New England.  Constitution Pipeline Company, LLC reported a key regulatory milestone toward approval to construct its proposed pipeline on a schedule that targets increasing natural gas supply to New York and New England markets in time for the winter 2015-16 heating season. The Federal Energy Regulatory Commission on Oct. 24 published its final environmental review of the proposed 124-mile Constitution Pipeline. The FERC action is a key step toward the commission’s decision on the project, which is expected soon.
  • Drilling in Maryland.  Approval for drilling in Maryland’s Garrett and Allegany Counties is moving forward. There have not been any published reports on the amount of nat gas in MD nor is there any information about leasing in MD.   We’ll watch for drilling activity in MD.
  • US Production Growth Remains Resilient Amid Lower Crude Oil Prices: IHS Most potential US tight oil production growth remains economical in the current crude oil price environment, according to a new report by research firm IHS.

    Roughly 80% of potential gross US tight oil capacity additions in 2015 would remain resilient at West Texas Intermediate (WTI) prices as low as $70 per barrel, the report says.

    The new report examines the outlook for US tight oil growth in light of the recent drop in crude oil prices, which have fallen by nearly 33% since summer.

    IHS estimates 2015 US tight oil production growth at around 700,000 barrels per day (BPD) at an average 2015 price of $77/Bbl. Though production would slow 2014 tight oil growth of more than one million barrels per day (MMBPD), the amount of growth remains significant, the report says.
  • Sunoco opens first CNG dispensers on PA Turnpike.  Officials from the Pennsylvania Turnpike Commission and Sunoco Inc. today marked the opening of three Compressed Natural Gas (CNG) fueling dispensers at the Turnpike's New Stanton Service Plaza located at milepost 77.6 westbound in Hempfield Township, Westmoreland County.

    The current cost for the CNG at New Stanton is $1.99 per Gasoline Gallon Equivalent (GGE), both for on- and off-Turnpike fueling. The GGE unit for CNG is comparable to one gallon of gasoline for powering vehicles.

Rig Count

  • Baker Hughes Rigs count for the November 21st reporting week.  Again we believe Baker Hughes count is on the light side
    • PA
      • Marcellus 52 rigs – up 3
      • Utica 4 rigs – unchanged    
    • Ohio
      • Utica 45 down 1
    • WV
      • Marcellus 31 unchanged
    • TX
      • Eagle Ford – 209 up 1
      • Permian Basin – 474 down 1
    • NM
      • Permian Basin – 91 down 2
    • ND
      • Williston – 177 down 4
    • MT
      • Williston – 11 unchanged
    • CO
      • Niobrara – 54 down 4
  • TOTAL U.S. Rig Count 1929 up 1

PA Permits for November 20, to November 27, 2014

       County              Township           E&P Companies

1.    Clearfield            Huston                EQT
2.    Clearfield            Huston                EQT
3.    Clearfield            Huston                EQT
4.    Clearfield            Huston                EQT
5.    Clearfield            Huston                EQT
6.    Clearfield            Huston                EQT
7.    Clearfield            Huston                EQT
8.    Greene               Aleppo                Rice
9.    Greene               Aleppo                Rice
10.    Greene             Aleppo                Rice
11.    Susquehanna    Dimock               Cabot
12.    Susquehanna    Springville           Cabot
13.    Washington       Smith                 Range

OH Permits – week ending November 22, 2014

       County                 Township              E&P Companies

1.    Guernsey              Londonberry          Amer. Ener. Utica
2.    Guernsey              Londonberry          Amer. Ener. Utica
3.    Guernsey              Londonberry          Amer. Ener. Utica
4.    Harrison                North                    Chesapeake
5.    Harrison                North                    Chesapeake
6.    Harrison                North                    Chesapeake
7.    Harrison                North                    Chesapeake
8.    Monroe                 Washington           Chesapeake

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