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NewsLetters

Permit Activity last week.  

  • PA – 19; eight different E&P Companies working in eight counties
  • OH –3; a slow week

Expo/Industry events for the next few months

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

Two dynamic speakers have been added to the list of presenters for Utica Upstream – Congressman Bill Johnson, representing Ohio’s 6th congressional district, including most of the state’s Utica shale counties, and Shawn Bennett, Executive Director of OOGA.   

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
Cabot Joins Speakers

Cabot Oil and Gas, one of the most productive E&P Companies in the Marcellus, will give you a perspective on 2015, a challenging year.

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/

Ohio Valley Oil & Gas Expo
April 28 & 29
James Carnes Center
St. Clairsville, OH

Last year’s event showcased over 150 booths and brought in 2,000+ visitors.  An even larger turn out is expected this year, as this area continues to evolve into the busiest shale play—making our business to business event the place to be!

Register now to exhibit!  www.ohiovalleyoilgasexpo.com

Latest facts and a rumor from the Marcellus and Utica Shale

  • More Nat Gas going to coal fired plants.  The year 2015 will be remembered in the history of the US electricity market as a watershed between two eras.

    With the Environmental Protection Agency (EPA) finally presenting its new emissions standards, natural gas-fired generation has officially turned from a future opportunity to a present necessity.

    With 45 gigawatts (a gigawatt is 1 billion watts) of coal-fired capacity to retire in the next two years, cleaner and cheaper natural gas-fired power plants are the most viable option for the industry to replace the missing capacity.

    By 2035, natural gas will have surpassed coal, with 40% of the country’s generation projected to be gas-fired. However, the shift to natural gas is far from easy. The increasing pressure put on existing natural gas-fired generation, coupled with constraints on the construction of new power plants, is raising concerns the capacity gap won’t be filled in time.

    According to analysis by the consulting/analytical firm ICF, natural gas consumption could increase as much as 2 trillion cubic feet (Tcf) due to coal plant retirements.
     
  • Williams’s pipeline has big economic impact.  Williams said construction of the company’s $3 billion Atlantic Sunrise natural gas pipeline project will generate roughly $1.6 billion in economic impact, according to a study authored by Pennsylvania State University researchers.

    Lead author of the study (financed by Williams), Seth Blumsack, Associate Professor of Energy Policy at Penn State, said the proposed project would have a major, positive economic impact on Pennsylvania’s and Virginia’s economies, where new pipeline facilities would be built and operated.

    According to the researchers, design and construction of Atlantic Sunrise could support roughly 8,000 jobs and an associated $870 million in economic value added during the construction period. The ongoing operation of the pipeline would generate approximately $1.9 million in annual economic impact, supporting 29 jobs, Penn State projects.
     
  • Rex provides 2015 1st Qtr. update

    Appalachian Basin – Legacy Butler Operated Area

    During the first quarter of 2015, the company placed the four-well Powell pad into sales. The four-well Powell pad was drilled with an average lateral length of 5,500 feet and completed with an average sand concentration of approximately 2,300 pounds per foot. The four-well Powell pad produced at an average 5-day sales rate per well of approximately 9.3 MMcfe/d.

    The company has also placed the two-well Hamilton pad into sales. The two wells on the pad were drilled with an average lateral length of approximately 4,700 feet and completed with an average sand concentration of approximately 2,300 pounds per foot. The two-well Hamilton pad produced at an average 5-day sales rate per well of approximately 7.8 MMcfe/d.

    "We are very pleased with the performance to date of our two most recent pads in the Butler Operated Area," said Tom Stabley, Rex Energy's Chief Executive Officer. "The results of the Powell and Hamilton pads support our belief that increased sand concentration utilized during the completion process results in higher IPs and better performance on our Marcellus type curve. Based on the 5-day sales rates, these two pads are on trend to meet or exceed our 2015 Marcellus type curve projections."

    The company has released its second rig in the Appalachian Basin and expects to run a one-rig program through the remainder of 2015.

    Appalachian Basin – Moraine East Area

    In the Moraine East Area, the company has completed drilling the final well of the four-well Renick pad. The four wells on the pad were drilled to an average lateral length of approximately 5,820 feet. The company expects to begin completion operations on the four-well Renick pad at the end of March 2015.

    Appalachian Basin – Warrior North Prospect, Carroll County, Ohio

    As previously announced, the company's first quarter 2015 production had been constrained, in part because of involuntary production curtailments in the Warrior North Prospect due to downtime at the Blue Racer compressor station. The issue at the Blue Racer compressor station has been resolved and the company does not anticipate future production to be constrained in the Warrior North Prospect.
     
  • Good news for tank manufacturers.  The era of shale drilling waste pits is closing in Pennsylvania. Storage tanks and the companies that market them are on the rise.

    Last week, the Department of Environmental Protection announced plans to ban temporary waste pits at Marcellus and Utica shale gas well sites, marking the official end, if the rules pass, of a once commonplace practice that regulators said every shale operator in the state has already dropped for tidier and safer alternatives using tank systems.

    The environmental agency is also proposing to apply stricter standards similar to those that control the state’s landfill impoundments to the large centralized wastewater ponds that some shale operators use to store waste fluids from multiple well sites.
     
  • Delaware River Ban to continue.  Gov. Tom Wolf supports a moratorium on gas drilling in the Delaware River Basin, his spokesman confirmed a day after the issue came up in a legislative committee hearing.

    “This is a regional decision between Pennsylvania, New Jersey, New York and Delaware and Wolf supports it,” spokesman Jeff Sheridan said in an email Thursday.

    On Wednesday, state Department of Environmental Protection secretary-designate John Quigley, a former mayor of Hazleton, told the House Appropriations Committee that Wolf supports the de facto moratorium, which has been in effect since 2011.

    Wolf’s proposed budget also increases funding to the Delaware River Basin Commission to $750,000, up almost 73 percent from last fiscal year.

    “It was certainly very encouraging news for us,” commission spokesman Clarke Rupert said. “We’re definitely heading in the right direction.”
     
  • Four things you need to know about Texas energy this week (Thank you, Roseland)  Texas-operated liquefied natural gas exporting companies in Texas energy like Houston-based Cheniere Energy Inc. and Freeport LNG Development LP have big-time projects under construction, but a myriad of other Texas LNG companies are gearing up for major projects. Even with commodity prices down, projects are still moving forward.

    - As evidence of the ongoing oil crash, exploration and production activity in Texas’ Eagle Ford Shale has plummeted by more than one-third since last summer as evidenced by rig counts. There are fewer than 150 Eagle Ford-area rigs and just more than 300 rigs in the Permian Basin region, where activity has dropped even more sharply.

    - Energy M&A activity is expected to pick up as soon as the price of oil begins to stabilize. Potential mega deals could include Irving-based Exxon Mobil Corp. buying up a major competitor like London-based or Norway-based Statoil ASA acquiring a huge Texas shale company like EOG Resources Inc.

    - It’s not a done deal yet, but the United Steelworkers strike at several Texas refineries may be over shortly. The union has a tentative agreement with lead negotiator after strikes began on Feb. 1, which later included protests and marches in downtown Houston and other places.
     
  • EQT Midstream to build 100 mile pipeline.  EQT, an integrated energy company focused on natural gas production and transportation in the Appalachian region of West Virginia, plans to sell its Marcellus Pipeline System to its own subsidiary, EQT Midstream, for $1 billion.

    EQT Midstream says it will invest $370 million in the expansion of its pipeline network, including the installation of 100 miles of gathering pipeline and 5 compressor units. This will augment the EQT's current 70 miles of gathering pipeline and 9 compressor units in the Marcellus Shale development.

    The company has considerable room for growing its operations, with its present 76 000 net developed acres complemented by 59 000 net undeveloped acres.
     
  • Horizontal drilling in the Clinton and Berea in OH.  Experimental horizontal wells in Ohio and surrounding states show great promise as a way for drillers to tap into the much-drilled Clinton sandstone, industry representatives say.

    Such wells are three times more costly than comparable vertical-only wells, but the horizontal wells are seven to eight times more productive, said Mark Lytle, CEO emeritus of Wooster-based Buckeye Oil Producing Co.

    The new wells are "not monster gas wells," but his company was very surprised at the volume of natural gas that was tapped, he said.

    His company has drilled a horizontal well in the Berea sandstone in West Virginia and hopes to drill one Clinton sandstone well in Ohio this year, he said Thursday at the Ohio Oil and Gas Association’s winter meeting. The three-day program attracted more than 1,000 people and it wraps up on Friday.

    David Hill, the president of the OOGA, hailed Lytel and the two other panelists, Greg Mason of the Newark-based Energy Cooperative, and Bob Trevail of Pennsylvania-based Dallas Energy LLC, for being pioneers in drilling the Clinton and other shallow sandstones.

    Such horizontal wells may well be the future of Ohio drilling, Hill said.

    He said it is very encouraging that the new wells are reaching leftover natural gas and oil.

    Lytle’s company drilled its first Clinton sandstone well in Holmes County in 2011. The company has added the two West Virginia wells — one is in production and the second should be producing in the near future, he said.

    Mason’s company has drilled one shallow horizontal well in Coshocton County. That well has produced more natural gas than expected, he said. He said he hopes to drill three new wells this year, if the commodity prices rise. Trevail’s company has drilled successfully near Bradford, Pa.

    Mason said the new drilling was 10 times more expensive than vertical wells, but the production results were 20 times greater than a vertical well.

    A Texas-based company, Enervest Energy Ltd., began drilling horizontal wells in the Clinton sandstone in Stark County late last year. Those wells are about 4,600 feet deep with 1,500-foot laterals.

    The results of those 10 initial wells looked promising, but the company has released little information about its exploration.

    The Clinton sandstone has been heavily drilled three times, most recently in the 1970s and 1980s. It lays under 25 Ohio counties including the entire Akron-Canton area.

    About three-fourths of all oil and gas produced in Ohio from 1985 to 2009 came from vertical-only Clinton sandstone wells.

    The new horizontal wells cost from $1 million to $3 million per well, far less than the bigger Utica shale wells that cost from $6 million to $10 million per well.

    In other news, Ohio drillers in 2014 drilled 5.8 linear feet of wells, according to the Debrosse & Exploration report by Martin Shumway of Shumway Resources LLC.

    It took 654 wells to cover that distance, he said.

    The No. 1 driller was Oklahoma-based Chesapeake Energy Corp. with 3.020,914 feet of vertical and horizontal drilling last year in the Utica Shale. It drilled 285 wells.

    No. 2 was Oklahoma-based Gulfport Energy with 596,894 feet and 37 wells. Third was Colorado-based Antero Resources with 18 wells and 288,056 feet of drilling. Fourth was Pennsylvania-based Eclipse Resources with 237,403 drilling feet and 21 wells.

    Ohio has 89 operators in 2014, down from 113 in 2013, he said.

    Carroll County had the most completed wells in 2014 with 182. Harrison County was second with 64 and Columbiana County was third with 53.

    Shawn Bennett, the executive vice president of the association, said he and other staffers are aggressively working to "Make sure that our voice is heard."
     
  • Howard Energy Partners buys SWN pipelines.  Howard Midstream Energy Partners, LLC dba Howard Energy Partners (HEP) today announced that it has executed a definitive purchase and sale agreement northeast Pennsylvania natural gas gathering assets in Bradford and Lycoming counties for $500 million, subject to customary purchase price adjustments. The gathering systems, serving the Marcellus Shale region, include approximately 100 miles of natural gas gathering pipeline, with nearly 600 million cubic feet per day of capacity and 53,000 horsepower of compression.

    “This is a significant transaction for us as these established assets place Howard Energy Partners in the heart of the prolific Marcellus Shale”

    In addition to the existing systems, HEP plans to design, construct and operate a new natural gas gathering system for SWN in Tioga County, Pennsylvania. Once fully operational, the new system is expected to add up to 380 million cubic feet per day of capacity in the area.

    The companies backing a 124-mile pipeline designed to ferry cheap Marcellus Shale natural gas to New York and New England can build across seven northeastern Pennsylvania properties whose owners had not agreed to it, a judge ruled.
     
  • Judge rules Shale pipelines can cross holdout properties.  (Thank you, WRAL.com) U.S. District Judge Malachy Mannion ruled that the Constitution Pipeline has the necessary permits from the Federal Energy Regulatory Commission and that it serves the public interest by providing additional natural gas pipeline capacity.

    Mannion also wrote in the Tuesday ruling that the Susquehanna County landowners stand to gain adequate compensation from the pipeline's owners. Some of the defendants did not respond to the lawsuits seeking access to their land.

    The lead partners in the Constitution Pipeline are Tulsa, Oklahoma-based Williams Partners LP and Houston-based Cabot Oil & Gas Corp.

    Construction on the seven properties can begin after the partner companies posts a $1.6 million bond to ensure there is money to pay the landowners once a judge approves the final compensation.

    A Williams spokesman, Chris Stockton, said Thursday the group hopes to begin construction June 1 and still needs permits from the U.S. Army Corps of Engineers and New York's Department of Environmental Conservation.

    Pennsylvania's Department of Environmental Protection approved erosion control and stream crossing permits for the pipeline last week.

    Read more at http://www.wral.com/judge-rules-shale-gas-pipeline-can-cross-holdout-properties/14526277/#msKjTOOuiUWV6lCo.99

Rig Count

Baker Hughes Rigs count for the week March 20th

  • PA
    • Marcellus 48 up 3
    • Utica 2 unchanged
  • Ohio
    • Utica 28 down 3
  • WV
    • Marcellus 21 up 3
  • TX
    • Eagle Ford – 138 down 8
    • Permian Basin  242 down 15
  • NM
    • Permian Basin – 50 down 4
  • ND
    • Williston – 98 down 3
  • MT
    • Williston – 1 down 2
  • CO
    • Niobrara – 29 down 2
       
  • TOTAL U.S. Rig Count 1069 down 56

PA Permits for March 12 to March 19, 2015

       County             Township          E&P Companies

1.    Bradford             Litchfield            Chesapeake
2.    Butler                  Center                Rex
3.    Butler                  Center                Rex
4.    Elk                      Jones                  Seneca
5.    Elk                      St. Mary’s           Seneca
6.    Elk                      St. Mary’s           Seneca
7.    Greene               Aleppo                Rice
8.    Greene               Aleppo                Rice
9.    Greene               Aleppo                Rice
10.    Indiana             Center                Consol
11.    Lycoming         Jackson              Range
12.    Lycoming         Jackson              Range
13.    Lycoming         Jackson              Range
14.    Susquehanna  Lenox                  Cabot
15.    Susquehanna  Rich                     Chesapeake
16.    Washington     Chartiers             Range
17.    Washington     Chartiers             Range
18.    Washington     Chartiers             Range
19.    Washington     West Finley         Noble

OH Permits – weeks ending March 14, 2015

       County            Township         E&P Companies

1.    Noble                Wayne                Antero
2.    Noble                Wayne                Antero
3.    Noble                Wayne                Antero

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Joe Barone jbarone@shaledirectories.com 610.764.1232
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Midstream PA