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Permit Activity last week.

  • PA – No permits which could be the result of Thanksgiving and deer season.
  • OH – 13 permits; Gulfport in Belmont and Monroe Counties; Chesapeake back in Carroll.

Expo/Industry events for the next few months:

Marcellus-Utica Midstream
Jan. 27-29, 2015
David Lawrence Convention Center
Pittsburgh, PA

Billions are going to spent in Midstream the next couple of years.  Get the latest information to prepare your company for this multi-year opportunity.


Latest facts and a rumor from the Marcellus and Utica Shale

Thoughts for the week.

1.  OOGA’s Expo.

From all my conversations there, it does not seem to be any slowdown coming in the Utica in 2015.  Many people told me 2015 is going to be an explosive year compared to 2014.  ODNR reported this week that 53 rigs are in OH and Baker Hughes reported that 44 are working.  

Congratulations to OOGA a good expo.  A number of exhibitors commented that they had made some good connections.

As many of you know, we attend every expo.  The trending with Expos is fewer attendees, but higher quality attendees.  This was certainly the OOGA experience.  Exhibitors spoke with a number of decision-makers which is all you can ask for at an Expo.  

2.  Labor shortage could be a bigger threat than the Saudis.  The common lament at every industry gathering is the challenge to find good workers with the appropriate skills.  Every company that I speak with is looking for workers.  Let’s hope the young men and women graduating from high school, community college and college will start fill the many industry openings.   

  • Falling oil prices!  Aubrey looks to buy more.  Although falling oil prices are prompting some companies to divest assets, co-founder and former CEO of Chesapeake Energy Corporation Aubrey McClendon is continuing to invest in mineral interests.

    On Monday, McClendon’s American Energy Mineral Holdings LLC announced that it has raised about $500 million from equity commitments to obtain mineral rights and royalties in a few different U.S. shale formations, according to a report by The Oklahoman.

    The first round of funding closed on Sunday. It will be used to secure 28,000 net mineral acres and 29,000 acres of royalty interests where affiliates of American Energy Partners LP are operating. The formations included in the acquisition include the Utica Shale in Ohio, the Marcellus Shale in Pennsylvania and West Virginia, the Woodford Shale in Oklahoma, and the Permian Basin in Texas. The initial $350 million raised will also provide the company with working capital.

    The equity commitment (a bond issued by a lending institution that qualifies as regulated capital) came from Houston-based The Energy and Mineral’s Group. The group is American Energy’s chosen private equity sponsor. Additional equity was provided by the company’s management.
  • Southwestern buys WPX Marcellus Holdings.  WPX Energy Inc. agreed to sell holdings in the Marcellus Shale to Southwestern Energy Co. for about $300 million in cash.

    The sale includes approximately 46,700 net acres and 50 million cubic feet of natural gas production a day primarily in Susquehanna County, Pennsylvania, WPX said Tuesday. It also includes 260 million cubic feet a day of pipeline capacity.

    We reported a few weeks ago that WPX would be selling off its Marcellus acreage.  I didn’t think it would happen this quickly.  Southwestern is becoming one of the largest E&P companies in the Marcellus.
  • Shell bringing another rig coming to PA.  Looks like it’s not going to happen. (RUMOR)
  • FERC approves Constitution pipeline.  The Federal Energy Regulatory Commission has given the green light to a proposed interstate pipeline that would bring Marcellus Shale natural gas to markets in New York and New England, provided it meets certain environmental conditions.

    The Constitution project involves building 124 miles of new 30-inch-diameter pipeline, connecting gas production in Susquehanna County to existing transmission lines in New York. It would be operated by subsidiaries of Williams Partners, Cabot Oil and Gas, Piedmont Natural Gas, and WGL Holdings.

    In an Environmental Impact Statement released in October, FERC determined the pipeline would have some limited, but adverse environmental impacts. The commission is requiring Constitution’s operators to submit numerous mitigation plans before construction to avoid impacts to sensitive areas and wildlife.
  • Ohio-Gulf Coast pipeline approved.  Federal regulators have approved a $468.5 million eastern Ohio pipeline project to send natural gas from Ohio to the Gulf Coast. Texas Eastern, a subsidiary of Houston-based Spectra Energy Corp.  in February lined up four companies to use its 76-mile long pipeline extension, but had not yet received final confirmation from the agency that oversees interstate pipelines.

    Now, its Ohio Pipeline Energy Network– or Open Project – can go forward. Houston-based Spectra hopes the project is done at the end of 2015.
  • Marcellus and Utica Nat Gas to Cove Point LNG to India.  WGL Holdings, through its subsidiary, WGL Midstream, announced the execution of a gas sale and purchase, and capacity agreement with GAIL Global (USA) LNG LLC (GGULL), a subsidiary of GAIL (India) Limited (GAIL), under which WGL Midstream has agreed to sell up to 430,000 Dth/day of natural gas, for a term of approximately 20 years, commencing on the in-service date of the Cove Point LNG export facility. WGL expects that the majority of the natural gas would be purchased by WGL Midstream through an existing arrangement with Antero Resources Corporation (Antero), a premier producer and the most active operator in the Marcellus and Utica Shale region.
  • UGI hooks up first Utica well.  UGI Utilities Inc. is now the first natural gas utility provider in Pennsylvania to establish a direct connection between a Utica Shale well and its distribution system.

    The new connection between a Utica Shale well and the utility system is the result of a partnership involving UGI and Shell Western Exploration & Production, Inc. (a division of Shell Oil). The connection ties one Utica Shale well and two Marcellus Shale wells, each located in Tioga County, with a high pressure transmission line owned by UGI.
  • The more we drill, the more we find.   Proven crude oil and lease-condensate reserves in the United States increased 9.3 percent to 36.5 billion barrels in 2013, up from 33.4 billion barrels in 2012, the U.S. Energy Information Administration said in a report Thursday.

    That was the fifth year in a row of increases, with reserves exceeding 36 billion barrels for the first time since 1975, EIA said.

    It also said proven wet natural gas reserves rose 9.7 percent to a record 354 trillion cubic feet in 2013, up from 322.7 tcf in 2012.

    EIA said the increase in gas reserves was spurred by a rise in the average price for the fuel to $3.66 per million British thermal units in 2013 from $2.75 in 2012, which encouraged energy companies to drill for gas in fields that were not considered economic in 2012.

    Proved reserves of crude oil and lease condensate in North Dakota, meanwhile, surpassed those in the federal Gulf of Mexico in 2013, ranking it second only to Texas among U.S. states, EIA said.

    Collectively, North Dakota and Texas accounted for 90 percent of the overall net increase in U.S. proved oil reserves in 2013.

    Tight oil plays accounted for 28 percent of all U.S. crude oil and lease condensate proved reserves, EIA said, noting the Bakken/Three Forks play covering parts of North Dakota, Montana and South Dakota regained its position as the largest tight oil play in the nation.

    The Marcellus shale in Pennsylvania and West Virginia accounted for 70 percent of the increase in proved gas reserves. The increase in Pennsylvania alone was 13.5 tcf, the largest increase in the nation.

    While U.S. oil and gas reserves and production increased in 2013, EIA said imports of both crude and gas declined by near 10 percent and 8 percent, respectively. (Reporting by Scott DiSavino, Editing by Franklin Paul; and Peter Galloway)
  • Magnum Hunter’s monster well in the Utica in WV.  A well in northern West Virginia has become the biggest producer of Utica shale gas in the region that includes Ohio and Western Pennsylvania, its Texas-based operator has reported.

    The so-called Stewart Winland 1300U well, in Tyler County, also is among the biggest-producing shale wells in the United States, according to Magnum Hunter Resources of Houston.

    Well production began last week and has reached 46.5 million cubic feet of natural gas per day, the company reported. That’s enough gas to heat nearly 241,000 houses for a day.
  • WV wants more under river drilling.  Even as the West Virginia Department of Commerce finalizes the contract with Gastar Exploration for drilling Marcellus and Utica shale beneath the Ohio River, officials are seeking bids for additional underwater state-owned mineral tracts.

Rig Count

  • Baker Hughes Rigs count for the November 28th reporting week.  Again we believe Baker Hughes count is on the light side
  • PA
    • Marcellus 52 rigs – unchanged
      • Utica 4 rigs – unchanged    
  • Ohio
    • Utica 44 down 1
  • WV
    • Marcellus 30 down 1
  • TX
    • Eagle Ford – 209 unchanged
    • Permian Basin – 474 unchanged
  • NM
    • Permian Basin – 92 up 1
  • ND
    • Williston – 180 up 3
  • MT
    • Williston – 11 unchanged
  • CO
    • Niobrara – 56 up 2
  • TOTAL U.S. Rig Count 1929 up 1

PA Permits for November 27, to December 4, 2014

County            Township                E&P Companies

There were no permits issued between November 27th (Thanksgiving Day) and December 4th.  Between Thanksgiving and deer season, not much was happening.

OH Permits – week ending November 29, 2014

County                     Township            E&P Companies

1.    Belmont             Somerset              Gulfport
2.    Belmont             Somerset              Gulfport
3.    Belmont             Somerset              Gulfport
4.    Carroll                Union                    Chesapeake
5.    Carroll                Union                    Chesapeake
6.    Carroll                Union                    Chesapeake
7.    Carroll                Union                    Chesapeake
8.    Jefferson             Smithfield             Amer. Ener. Utica
9.    Jefferson             Smithfield             Amer. Ener. Utica
10.    Monroe             Seneca                Antero
11.    Monroe             Seneca                Antero
12.    Monroe             Sunsbury             Gulfport
13.    Monroe             Sunsbury             Gulfport

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