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Permit Activity last week. 

  • PA – 99 permits; 15 E&P Companies secured permits in 14 counties.  It’s going to be a busy first quarter.
  • OH – 19 permits; American Energy Utica secured 15 permits; It’s really ramping up for 2015.

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.

To ATTEND, SPONSOR or EXHIBIT, visit www.MarcellusMidstream.com

See the rest of the Expos at www.shaledirectories.com

Latest facts and a rumor from the Marcellus and Utica Shale

  • OH acreage.  Energy analyst Irene Haas of Wunderlich Securities in a speech at the Ohio Oil and Gas Association's 2104 Oilfield Expo and Technical Conference in Cleveland last week provided acreage by E&P company:
  1. Chesapeake Energy, 925,000 acres.
  2. Chevron Corp., 332,000 acres.
  3. American Energy Utica, 280,000 acres.
  4. Eclipse Resources, 230,550 acres.
  5. Gulfport Energy, 184,000 acres.
  6. EV Energy Partners, 173,000 acres.
  7. Halcon Resources, 135,000 acres.
  8. Antero Resources, 134,000 acres.
  9. Magnum Hunter Resources, 118,497 acres.
  10. CONSOL Energy, 109,000 acres.
  11. BP Plc, 100,000 acres.
  12. Devon Energy, 90,000 acres.
  13. PDC Energy, 67,000 acres.
  14. XTO Energy, 55,000 acres.
  15. Rice Energy, 53,824 acres.
  16. Hess Energy, 44,000 acres.
  17. Carrizo Oil, 27,300 acres.
  18. Anadarko Petroleum, 20,000 acres.
  19. EQT Corp., 13,600.

The Ohio acreage total for the Utica shale is 3,091,771 acres.

Of that total, 694,210 acres are in the oil window, 198,100 acres are in the condensate window, 681,215 acres are in the wet gas window and 655,946 acres are in the dry gas window.

  • EQT to spend $2.3 billion and drill 259 wells in 2015.  EQT has been busy acquiring permits the last few months.  I can see why now.  EQT is focusing much of its drilling in Greene County, PA.

    Marcellus Development

    In 2015, the Company plans to drill 181 Marcellus wells with an average lateral length of 5,500 feet – all of which will be on multi-well pads to maximize operational efficiency and well economics. More than 75% of the Marcellus drilling program will focus on the Company’s core development areas in southwestern Pennsylvania and northern West Virginia. EQT Production owns approximately 580,000 net Marcellus acres.

    Upper Devonian Development

    The Company plans to drill 58 Upper Devonian wells, with an average lateral length of 5,800 feet – all of which will share a pad with Marcellus wells in order to minimize development costs. EQT Production owns approximately 170,000 net acres in the Upper Devonian, which sits above the Marcellus; however, it will be developed as a separate zone.

    Permian Development

    The Company plans to drill a total of 15 horizontal wells, which includes 12 developmental wells that target the Upper Wolfcamp; and three exploration wells that target the Lower Wolfcamp and Cline zones. EQT owns approximately 73,000 net acres in the Permian Basin of Texas.

    Dry Utica Development

    The Company plans to drill five Utica wells. EQT spud its first Utica test well in Greene County, PA during the fourth quarter 2014, and plans to spud a second Utica test well in Wetzel County, WV, during the first quarter of 2015. EQT owns approximately 400,000 net acres that the Company believes are prospective for the Utica.

    Huron

    The Company does not plan to drill new wells in the Huron during 2015, primarily due to the consistently low commodity price of natural gas, which has made the Huron less profitable than EQT’s required returns.
     
  • ODNR 3rd Qtr. production report.  Oil and natural-gas production from Ohio’s Utica Shale wells increased significantly in the third quarter of this year.

    Horizontal shale wells produced more than 3 million barrels of oil and 132 billion metric cubic feet of natural gas in the third quarter of 2014, according to the Ohio Department of Natural Resources’ report issued Friday.

    Oil production increased by more than 546,000 barrels and gas by more than 43 billion cubic feet compared with the previous quarter.

    The report lists production results for 674 out of 717 wells. Ohio’s highest-producing oil well was in Noble County at 50,159 barrels of oil.

    The state’s highest- producing natural-gas well was in Monroe County at 1.7 billion Mcf.

    In the Mahoning Valley, the highest-producing oil well was the CNX Gas Co.’s Hendricks well in Mahoning County at 9,677 barrels of oil.

    The Valley’s highest- producing natural-gas well was Chesapeake Exploration’s Albaneso 24-14-4 well in Columbiana County at 452 million Mcf.
     
  • Americans support Nat Gas.  A total of 75% of poll respondents agreed development of natural gas is driving economic growth in America, underpinning the support for infrastructure development.

    The survey of more than 2,000 US adults conducted online by Ipsos Public Affairs found 56% support expanded development of infrastructure, including processing facilities to clean natural gas and transportation pipelines to bring gas to consumers.

    Only 10% of adults oppose such investments, while 31% are unsure whether to support infrastructure expansion.

    Among the other findings of the survey:

    When asked about the two most appealing reasons to use natural gas, respondents most frequently said it reduces energy dependence on other countries (48%), while (35%) agreed it costs less than other sources of energy fuels. Nearly one-third (30%) said it’s better for the environment than other energy fuels. Almost one quarter (23%) said natural gas is more abundant and accessible than other fuels, and 19% said natural gas creates jobs and powers economic growth.
     
  • North American Gas Production Will Nearly Triple by 2040: ExxonMobil

    North American unconventional gas production will nearly triple by 2040, and is expected to surpass the combined output of Russia and the Caspian Sea region as the largest gas-producing area in the world, ExxonMobil’s new annual study, “Outlook for Energy: A View to 2040,” projects.

    Natural gas is expected to be the fastest-growing major fuel source during the outlook period 2015-2040, as demand increases by about 65%, according to the study.

    Half of the increase will come from the Asia-Pacific Region, led by China. Utilities and industrial operations are expected to account for about 80% of the demand increase worldwide, as operators increasingly choose natural gas because of its lower emissions and versatility as a fuel and feedstock.

    By 2040, natural gas is expected to account for more than a quarter of global energy use, surpassing coal in the overall mix, the ExxonMobil outlook projects.

    The outlook projects a major shift as North America will likely become a net exporter of liquids by 2020, due to an increase in tight oil, natural gas liquids, and bitumen from Canadian oil sands. This is expected to open new trading opportunities as Asia-Pacific’s net imports are projected to rise by nearly 80% by 2040, according to ExxonMobil.

    Other key findings of the outlook include:

    Energy required to meet rising electricity demand will account for about half of total demand growth.

    Technologies that unlock new unconventional oil and gas supplies will help enable oil and natural gas to meet about 65 percent of global energy demand growth.

    Oil will remain the No 1 energy source and demand will increase by nearly 30%, driven by expanding needs for transportation and chemicals.

    By 2040, abundant sources other than conventional crude and condensate will account for roughly 45% of global liquids production, compared with less than 25% in 2010.

    Estimates of remaining recoverable crude and condensate relative to current demand have risen from roughly 60 years in 1981, to about 150 years in 2013.

    Rising natural gas demand will be met with abundant new supplies and significant expansion in trade as unconventional gas production nearly quadruples and LNG trade triples by 2040.
     
  • EIA project growth next year.  The US Energy Information Administration has published its latest Drilling Productivity Report; projecting growth into next year at effectively the same rate as it is currently, reflecting an apparent delayed reaction to the recent fall in oil prices.

    The Drilling Productivity Report takes “recent data on the total number of drilling rigs in operation along with estimates of drilling productivity and estimated changes in production from existing oil and natural gas wells to provide estimated changes in oil and natural gas production for seven key regions” according to the EIA website.

    Oil production from the Bakken, Eagle Ford and Permian Basin is set to rise by 103,000 barrels per day (bpd) in January 2015 compared to December 2014.

    The growth from November to December this year was 105,000 bpd and the 103,000 figure compares favorably with a majority of this year’s monthly growth.

    In addition, as drilling efficiencies improve, new wells are expected to have increased productivity, for example in the Bakken shale play each new well is set to produce 10% more per day in January than in June of this year.

    Production from the Bakken formation will rise by some 27,000 bpd to 1.25 million bpd, while Eagle Ford oil production will rise by some 30,000 bpd to 1.69 million bpd, according to the report.

    Whilst oil production from the Permian Basin of West Texas and New Mexico will see output grow 46,000 bpd to 1.87 million bpd.

    Natural gas production across the major regions is set to grow 0.6 billion cubic feet per day (bcfd) month-over-month to 44.7 bcfd in January; growth in the Marcellus shale play will be responsible for a majority of the gas growth from 16.1 bcfd in December to 16.3 bcfd in January.

    EIA Report link   http://www.eia.gov/petroleum/drilling/
     
  • Magnum Hunter focuses on Nat Gas.  The company has cashed out of its holdings in the Eagle Ford and is currently trying to sell its assets in the Bakken which may be difficult due to the falling price of oil.

    Magnum Hunter currently owns a total of 80,500 net acres in Marcellus shale, along with 118,000 net acres in Utica shale. According to estimates drawn by Magnum Hunter a total of 1,438 locations in these acres remain untouched and ready to be explored. Given the size of the company, this is quite a significant growth opportunity as each of these sites is a treasure waiting to be unearthed.

    Last week, we reported on Magnum Hunter’s monster well in the Utica.
     
  • Warren’s 2015 preliminary capital budget.  Warren is projecting approximately $80 million of capital expenditures in 2015, with primary focus on developing its Marcellus shale assets. For the full year 2015, Warren expects production volumes to range between approximately 41 Bcfe to 43 Bcfe, a 95% increase over the midpoint of projected 2014 production, primarily due to the increased production volumes from the Marcellus assets acquired in August 2014. Warren expects natural gas volumes to comprise approximately 85% of total production in 2015.

    In the Marcellus, where production volumes have continued to outperform expectations and development activity offers attractive rates of return at current realized pricing, Warren has budgeted approximately $44 million in order to drill 7 wells and complete 8 wells in 2015.
     
  • 38,000 miles of pipeline OH. A huge supply of natural gas in the shale of northern Appalachia is igniting a mega-boom in gas pipeline construction in Ohio, the likes of which haven’t been seen since the 1940s.

    “You have interstate, intrastate, local utility service lines upgrades, collection lines for oil and gas utilities, and lines for gas-fired electric utilities. Altogether, there will be 38,000 miles of pipeline development in Ohio over the next decade,” said Dale Arnold, director of energy services for the Ohio Farm Bureau Foundation.
     
  • Rice launches midstream IPO.  Rice Energy Inc. hopes to bring in about $600 million with the initial public offering of its midstream company on the New York Stock Exchange beginning Monday.

    Rice said it planned to sell 25 million units at $19 to $21 per unit, which would total between $475 million and $525 million. It also expects to sell another 3.75 million units — worth another $71.2 million to $78.7 million, depending on price — in a 30-day option.

    The shares in the IPO of the new company, Rice Midstream Partners would represent 43.5 percent of its limited partner interest, reaching to 50 percent if the 3.75 million option of shares are also sold. Rice, which is based in Canonsburg, owns the general partner.
     
  • PDC slows down in OH.  PDC Energy Inc. will temporarily pause its Ohio Utica Shale operations in 2015 in favor of focusing on Colorado’s Wattenberg field, according to a report by Columbus Business First.

    Next year, the company will spend a mere $38 million on its Ohio operations to maintain leases and to complete a four-well pad in Guernsey County. This is an 80 percent decrease from the $190 million the company spent this year. Despite the completion of the well pad, the rig will remain idle.
     
  • Goodrich Petroleum to ‘Explore Options’ for Company’s Eagle Ford Assets

    Goodrich Petroleum said Wednesday, Dec 10; it was “exploring strategic options” for all or part of its Eagle Ford shale assets in South Texas to boost corporate liquidity.

    The independent producer’s Eagle Ford assets include roughly 40,000 acres, with proved reserves totaling 12 million barrels of oil-equivalent (MMBOI), and risked resource potential is pegged at 59 MMBOE.

    The company also said it expects capital spending for 2015 to fall to between $150 million and $200 million, down from the lower end of $325 million to $375 million in 2014.
     
  • Kinder Morgan and Cheniere announce LNG deal.  Kinder Morgan announced Kinder Morgan Texas Pipeline, Kinder Morgan Tejas Pipeline, and Tennessee Gas Pipeline have entered into 15-year firm transportation agreements and a multi-year storage agreement with Cheniere Energy via its Corpus Christi Liquefaction subsidiary.

    Under the agreements, Kinder will provide 550 million cubic feet per day (MMcf/d) of firm natural gas transportation service, as well as 3 billion cubic feet (Bcf) of natural gas storage capacity to serve Cheniere’s LNG export facility being developed near Corpus Christi, TX.

Rig Count

  • Baker Hughes Rigs count for the December 5th reporting week.  Again we believe Baker Hughes count is on the light side
     
  • PA
    • Marcellus 52 rigs – unchanged
      • Utica 3 rigs – down 1    
  • Ohio
    • Utica 45 up 1
  • WV
    • Marcellus 30 unchanged
  • TX
    • Eagle Ford – 206 down 3
    • Permian Basin – 475 up 1
  • NM
    • Permian Basin – 93 up 1
  • ND
    • Williston – 180 unchanged
  • MT
    • Williston – 9 down 2
  • CO
    • Niobrara – 55 down 1

TOTAL U.S. Rig Count 1920 down 3

PA Permits for December 1, to December 11, 2014

      County                  Township                E&P Companies

1.    Bradford                Burlington               Chesapeake
2.    Bradford                Canton                   Chesapeake
3.    Bradford                Columbia                Talisman
4.    Bradford                Columbia                Talisman
5.    Bradford                Columbia                Talisman
6.    Bradford                Columbia                Talisman
7.    Bradford                Herrick                   Southwestern
8.    Bradford                Herrick                   Southwestern
9.    Bradford                Herrick                   Southwestern
10.    Bradford               Herrick                  Southwestern
11.    Bradford               Herrick                  Southwestern
12.    Bradford               Sheshquin             Chesapeake
13.    Bradford               Smithfield              Chesapeake
14.    Bradford               Terry                     Chesapeake
15.    Bradford               Towanda                Chesapeake
16.    Bradford               Wilmot                  Chesapeake
17.    Bradford               Wyalusing             Chesapeake
18.    Bradford               Wysox                  Chesapeake
19.    Butler                  Clearfield                XTO
20.    Butler                  Clearfield                XTO
21.    Butler                  Clinton                   Range
22.    Butler                  Donegal                  XTO
23.    Clinton                 Grugan                   Anadarko
24.    Clinton                 Grugan                   Anadarko
25.    Clinton                 Grugan                   Anadarko
26.    Clinton                 Grugan                   Anadarko
27.    Clinton                 Grugan                   Anadarko
28.    Elk                       Jones                    Seneca
29.    Elk                       Jones                    Seneca
30.    Elk                       Jones                    Seneca
31.    Elk                       Jones                    Seneca
32.    Elk                       Jones                    Seneca
33.    Elk                       Jones                    Seneca
34.    Elk                       Jones                    Seneca
35.    Elk                       Jones                    Seneca
36.    Forest                   Jenks                    Shell
37.    Greene                  Center                   Consol
38.    Greene                  Morris                   EQT
39.    Greene                  Morris                   EQT
40.    Greene                  Morris                   EQT
41.    Greene                  Morris                   EQT
42.    Greene                  Morris                   EQT
43.    Greene                  Morris                   EQT
44.    Greene                  Morris                   EQT
45.    Greene                  Morris                   EQT
46.    Greene                  Morris                   EQT
47.    Greene                  Morris                   EQT
48.    Greene                  Morris                   EQT
49.    Greene                  Morris                   EQT
50.    Greene                  Morris                   EQT
51.    Lycoming               Cogan House        Southwestern
52.    Lycoming               Cummings            Range
53.    Lycoming               Cummings            Range
54.    Lycoming               Cummings            Range
55.    McKean                 Norwich                Seneca
56.    McKean                 Norwich                Seneca
57.    Sullivan                  Cherry                  Chesapeake
58.    Sullivan                  Elkland                 Chesapeake
59.    Sullivan                  Elkland                 Chief
60.    Sullivan                  Elkland                 Chief
61.    Sullivan                  Elkland                 Chief
62.    Susquehanna         Bridgewater           Cabot
63.    Susquehanna         Forest Lake           WPX
64.    Susquehanna         Jackson                Southwestern
65.    Susquehanna         Jackson                Southwestern
66.    Susquehanna         Jackson                Southwestern
67.    Susquehanna         Jackson                Southwestern
68.    Susquehanna         Jackson                Southwestern
69.    Susquehanna         New Milford           Southwestern
70.    Susquehanna         New Milford           Southwestern
71.    Susquehanna         New Milford           Southwestern
72.    Susquehanna         Rush                    WPX
73.    Tioga                     Delmar                 Shell
74.    Washington            Amwell                 Range
75.    Washington            Amwell                 Range
76.    Washington            Amwell                 Range
77.    Washington            Amwell                 Range
78.    Washington            Amwell                 Range
79.    Washington            Cecil                    Range
80.    Washington            Cecil                    Range
81.    Washington            East Finley           Consol
82.    Washington            East Finley           Consol
83.    Washington            East Finley           Consol
84.    Washington            East Finley           Consol
85.    Washington            East Finley           Consol
86.    Washington            Independence       Range
87.    Washington            North Strabene     Range
88.    Washington            Robinson             Range
89.    Washington            Robinson             Range
90.    Washington            Robinson             Range
91.    Washington            Robinson             Range
92.    Washington            West Pike           Rice
93.    Washington            West Pike           Rice
94.    Washington            West Pike           Rice
95.    Westmoreland         Bell                    Consol
96.    Westmoreland         Washington        Consol
97.    Wyoming                Mehoopany         Chesapeake
98.    Wyoming                Windham            Chesapeake
99.    Wyoming                Windham            Chesapeake

OH Permits – week ending December 6, 2014

       County                   Township          E&P Companies

1.    Belmont                  Goshen              Rice
2.    Belmont                  Goshen              Rice
3.    Guernsey                Oxford                Amer. Ener. Utica
4.    Guernsey                Oxford                AEU
5.    Guernsey                Oxford                AEU
6.    Guernsey                Oxford                AEU
7.    Guernsey                Oxford                AEU
8.    Guernsey                Oxford                AEU
9.    Guernsey                Oxford                AEU
10.    Harrison                Moorefield           AEU
11.    Harrison                Moorefield           AEU
12.    Harrison                Moorefield           AEU
13.    Harrison                Moorefield           AEU
14.    Harrison                Moorefield           AEU
15.    Harrison                Nottingham         AEU
16.    Harrison                Nottingham         AEU
17.    Harrison                Nottingham         AEU
18.    Noble                    Jefferson             Triad
19.    Noble                    Jefferson             Trian

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

 

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