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Permit Activity last week.  

  • PA – 35; New players (Triana, Burnett) this week; Chesapeake in Bradford; Vantage in Greene; Hilcorp in Mercer
  • OH –1; XTO in Belmont County

Expo/Industry events for the next few months:


OOGA Winter Meeting – March 11-13, 2015, Columbus, OH

OOGA’s featured speaker will be Dr. Philip K. Verleger, Jr., Owner and President of PKVerleger LLC, an independent consulting firm. Dr. Verleger’s research focuses primarily on the function and structure of energy commodity markets. His studies also encompass the changing relationship between the energy and economic sectors.

Visit us at Booth #74.

http://oogawintermeeting.com/

Utica Upstream 2015 – April 8, 2015, Canton, OH

If you are a business that serves the oil and gas economy in the Utica Shale, you will need the best information going forward in 2015.  Get the whole story from industry experts.  

https://www.cantonchamber.org/utica-upstream

Upstream PA 2015 – April 16, 2015 Penn State

David Spigelmyer, Marcellus Shale Coalition President, will be the featured speaker.  Spigelmyer along with some E&P Companies providing an overview for upstream activity in 2015.  Additionally, industry experts will comment on oil and gas pricing and government actions impacting the oil and gas industry.  

John Felmy, Chief Economist, American Petroleum Institute, will give a comprehensive outlook for oil and gas pricing globally and its impact on Pennsylvania oil and gas industry.   

If you’re doing business in the upstream market in PA, this is a must attend seminar.

http://upstreampa2015.com/


Latest facts and a rumor from the Marcellus and Utica Shale

Shale Directories 3-month rig count analysis.  Shale Directories is the only online directory for the six major shale plays in the U.S. which are the Marcellus, Utica, Eagle Ford, Permian, Bakken and Niobrara.

We have been reporting the rig count in activity of these six major shale plays in our weekly newsletter, Facts & Rumors.  In reviewing the price declines of oil and natural gas, we think December 5th is date for a stake in the ground to analyze the price change and rig count declines by shale play.

On December 5, 2014, the price of crude WTI was $66.25 and natural gas was $3.70.  Since that time we’ve seen a rollercoaster of price variations with crude dropping in the low $40’s range and going as high as $55.  The movement of natural gas prices has been primarily downward despite one of the coldest winters on record.

The impact of the price declines on rig counts (Baker Hughes) has been significant in some shale plays and minor in others.
 

State Shale Play Rigs 12/5/2014 Rigs 2/27/2015 %Chg.
PA Marcellus
Utica
52
4
52
1
0%
-75%
OH Utica 44 36 -18%
WV Marcellus 30 16 -47%
TX Eagle Ford
Permian Basin
209
474
157
290
-25%
-39%
NM Permian Basin 92 65 -29%
ND Williston 180 108 -40%
MT Williston 11 3 -3%
CO Niobrara 56 36 -6%
U.S.   1929 1267 -34%

In reviewing these numbers, it jumps out that the Marcellus in PA has not seen any drop in rig counts.  OH has experienced a mild drop in rig counts (17%).  The constant activity in the Marcellus and Utica shale plays is expected according to many industry experts.        
    
We hope you find this analysis helpful as you plan your business in the oil and gas industry whether you are just working the in the Niobrara or Marcellus or in all six shale plays.

  • Could this be the bottom?  As many of you know, I’m a CNBC junkie who has it all the time in my office.  This past Wednesday traders on the oil exchange in New York said that the bottom was in on oil at $50.  (RUMOR)
     
  • Dow betting on lower Nat Gas prices.  The company whose CEO was the most vocal industry critic of exporting natural gas to insure sufficient product for domestic use, seems to be comfortable with future supply.

    Dow Chemical plans to invest $6 billion to expand its manufacturing facilities in the US by 40%, betting low natural gas prices will persist for at least the next 10 years, a Dow executive said in Chicago last week.
     
  • Aubrey selling some acreage.  American Energy Partners LP is looking to sell 29,000 acres from its undeveloped Ohio Utica shale portfolio.

    The land is in two different parts of eastern Ohio: About 18,000 acres in Noble, Guernsey and Tuscarawas counties on the western edge of the play, and 11,000 acres in Jefferson, Columbiana and Carroll counties, according to a presentation the company sent to potential interested parties obtained by Columbus Business First.

    It touted the land as "providing acreage exposure ranging from rich condensate acreage in Guernsey and Noble counties to the northern dry gas window in Jefferson and Columbiana counties."

    The company and its Appalachian subsidiary, American Energy – Utica LLC, were formed by shale pioneer and former Chesapeake Energy Corp. (NYSE:CHK) CEO Aubrey McClendon. Until now, it has focused on buying, not selling, swaths of land.

    American Energy – Utica has about 250,000 acres in the play. It says it is considering trading or selling all or parts of the offered leasehold. The area falls outside what appears to be the "sweet spot" of the Utica shale play. Belmont and Monroe counties are home to some of the best natural gas wells in the state, as the latest production figures show.

    The offer was sent out in February. It's unclear how the current downturn in the industry, with most companies significantly reducing capital expenditures, might impact a possible sale.
     
  • Aubrey is also looking to raise more money.  Aubrey McClendon, long regarded as one of the brashest, most creative executives in the U.S. energy industry, has raised $15 billion in cash and debt financing for a new venture 1½ years after being ushered out of the drilling company he helped found, Chesapeake Energy.

    But just months after amassing that war chest for American Energy Partners, his new drilling company, McClendon is actively trying to add to it—amid a unique set of personal obstacles and some of the worst market conditions in recent memory.

    So far this year people familiar with the matter are saying, McClendon and his representatives have held multiple meetings with both banks and private-equity firms in hopes of raising additional capital in various forms.

    McClendon's proposals have ranged, these people say, from launching a new AEP vehicle to drill shale in parts of the U.S. where it does not now operate, like California, to gathering a pool of permanent capital for him that could be used for more general business purposes. One iteration of the permanent-capital effort—a special-purpose acquisition company, or "SPAC"— intended to raise $200 million, encountered a hiccup in mid-February, these people add, after Citigroup, the key underwriter, abruptly backed away.
     
  • Pipeline to Niagara Falls and Eastern Canada.  National Fuel Gas has received permission from federal energy regulators to move ahead with its plans to build a pipeline that will stretch from the Marcellus Shale region in Pennsylvania to Niagara Falls.

    The Federal Energy Regulatory Agency this week granted authorization to National Fuel’s Northern Access 2015 pipeline project, which is being built in conjunction with Tennessee Gas Pipeline Co.’s Niagara Expansion Project pipeline. Together, the two projects will create a pipeline running from the Marcellus Shale region in Pennsylvania to a connection with the TransCanada pipeline near Niagara Falls.

    The pipeline expansions give National Fuel options for transporting natural gas produced by its drilling business in the Marcellus Shale region in Pennsylvania to markets across the Northeast, as well as Canada.
     
  • Exxon cuts CAPEX 12%.  ExxonMobil, following the route of many of its competitors, said Wednesday, March 4, it will cut 2015 capital expenditures by 12% to $34 billion, while increasing its worldwide daily production 2% to 4.1 million barrels of oil-equivalent product.

    The world’s largest publicly-held oil company said it expects to bring online 16 major oil and natural gas projects during the next three years and is on track to increase daily production to 4.3 million oil-equivalent barrels (MMBOE) by 2017, according to Rex W Tillerson, CEO.
     
  • Another E&P Company looks to sell interest in process facility.  EV Energy Partners intends to sell off its interests in processing facilities in the Utica Shale region of eastern Ohio.

    It is seeking a buyer for its 21 percent stake in Utica East Ohio, which operates natural gas-processing plants in Columbiana and Carroll counties and a liquids-separating plant in Harrison County.

    The company said it hopes to close the sale soon. It has invested $294 million in the processing.

    Last fall, EV Energy Partners sold its 9 percent interest in Ohio’s Cardinal Gas Services to two South Korean companies for $162 million.
     
  • LNG to Lithuanian.  Lithuanian liquefied natural gas (LNG) importer Litgas has signed a non-binding agreement to purchase LNG from the United States' first export terminal, the company said last Saturday, Feb 28.

    Europe’s Baltic States and Poland are looking to imports from the US to reduce their dependence on Russian supplies. Lithuania opened a floating import terminal last year and Poland plans to open one later this year.
     
  • EnerVest update.  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 Utica assets to monetize holdings for its institutional investors. The company has been marketing about 335,000 acres in eastern Ohio for several years. Those sales have been postponed due to low commodity prices.

    In another development, EV Energy Partners said it is making progress in tapping into the crude oil window at a well near Uhrichsville in Tuscarawas County.

    The Nettle 3H well was hydraulically fractured, or fracked, with butane and mineral oil in an effort to get the crude oil to flow.

    The 5,400-foot laterals were fracked in 24 stages, and the well is in early flowback stages. The well was drilled with eight other industry partners.

    Initial crude oil results are comparable to what Chesapeake Energy Corp. has seen from the Parker well in Tuscarawas County’s Perry Township, EV Energy Partners said.
     
  • Eclipse Resources looking at Joint Venture.  A State College-based drilling company is cutting back further on its plans and is considering a joint venture as lower natural gas prices continue to bite the industry.

    Eclipse Resources Corp. (NYSE: ECR), which drills primarily in the eastern Ohio Marcellus and Utica shale, said in a statement it was in talks with unnamed companies for a joint venture that would "accelerate drilling on its assets without burdening the company's balance sheet." Eclipse said a joint venture could involve part of its 2015 capital budget and maybe factor into 2016's plans, but said there weren't any guarantees a deal would happen.

    Capital spending is expected to drop by as much as 50 percent for 2015 as the company deals with the down market for natural gas. It announced Wednesday a 38 percent cut in its $640 million capital spending beyond its 20 percent reduction announced in December 2014. It also cut two rigs during the first quarter, and in the fourth quarter deferred completion of 19 wells in the liquids portion of the play.

    "Having just raised over $434 million of capital, we want to move carefully and ensure that we retain a substantial portion of these funds as we get to year-end. As part of this strategy, we have commenced joint venture discussions with a number of financial partners, and I am encouraged by the progress and interest we are receiving," said CEO Benjamin W. Hulburt in a statement.

    Hulburt said the drop in capital spending would cut into Eclipse's growth but said he still expected a 100 percent increase from 2014.
     
  • Dodge Ram has more CNG options.  Fiat Chrysler is expanding the availability of compressed natural gas on its heavy duty Ram pickup.

    The CNG-fueled truck, originally engineered for fleet operators, is available now only in a four-door crew cab, four-wheel-drive and long-bed model. This fall, the truck will be offered in a regular cab two-door body style with two-wheel drive and a long bed.

    Since it made CNG available in late 2012, Ram has sold about 1,000 of the trucks. Dave Sowers, head of commercial marketing for Ram, said expanding the availability of CNG should boost sales to fleet buyers looking for a smaller, less expensive CNG truck.

    Ram officials announced the expansion of the CNG option Wednesday at the Association for the Work Truck Industry national trade show in Indianapolis.

Rig Count

Baker Hughes Rigs count for the week March 6th.
     

  • PA
    • Marcellus 45 rigs – down 7
    • Utica 2 unchanged
  • Ohio
    • Utica 35 down 1
  • WV
    • Marcellus 17 up 1
  • TX
    • Eagle Ford – 149 down 8
    • Permian Basin  276 down 14
  • NM
    • Permian Basin – 57 down 8
  • ND
    • Williston – 105 down 3
  • MT
    • Williston – 3 unchanged
  • CO
    • Niobrara – 31 down 5
       
  • TOTAL U.S. Rig Count 1195 down 75

PA Permits for February 26, to March 5, 2015

       County               Township              E&P Companies

1.    Bradford                Asylum                Chesapeake
2.    Bradford                Tuscarora             Chesapeake
3.    Bradford                Wilmot                Chesapeake
4.    Bradford                Wilmot                Chesapeake
5.    Bradford                Wilmot                Chesapeake
6.    Butler                    Summit               XTO
7.    Butler                    Summit               XTO
8.    Fayette                 Springhill             Burnett
9.    Greene                  Center                Vantage
10.    Greene                Center                Vantage
11.    Greene                Center                Vantage
12.    Greene                Center                Vantage
13.    Greene                Center                Vantage
14.    Greene                Center                Vantage
15.    Greene                Franklin               Vantage
16.    Greene                Franklin               Vantage
17.    Greene                Franklin               Vantage
18.    Greene                Franklin               Vantage
19.    Greene                Washington         Vantage
20.    Greene                Washington         Vantage
21.    Greene                Washington         Vantage
22.    Greene                Washington          Vantage
23.    Greene                Washington          Vantage
24.    Greene                Washington          Vantage
25.    Greene                Washington          Vantage
26.    Lawrence             Little Beaver          Rex
27.    McKean              Bradford                Triana
28.    McKean              Bradford                Triana
29.    Mercer                Lackawannock       Hilcorp
30.    Mercer                Lackawannock       Hilcorp
31.    Mercer                Lackawannock       Hilcorp
32.    Mercer                Lackawannock       Hilcorp
33.    Mercer                Shenango              Hilcorp
34.    Westmoreland     Derry                     WPX
35.    Wyoming            Washington            Warren

OH Permits – weeks ending February 28, 2015

      County               Township           E&P Companies

1.    Carroll                Center                Chesapeake
2.    Carroll                Center                Chesapeake
3.    Carroll                Center                Chesapeake
4.    Carroll                Center                Chesapeake
5.    Carroll                Center                Chesapeake
6.    Carroll                Center                Chesapeake
7.    Columbiana        Franklin              Chesapeake
8.    Jefferson            Salem                 Chesapeake
9.    Monroe              Switzerland          Eclipse
10.    Monroe            Switzerland          Eclipse
11.    Monroe            Switzerland          Eclipse
12.    Monroe            Switzerland          Eclipse


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

 

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