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NewsLetters

Permit Activity last week.  

  • PA – 18; Chesapeake in Bradford; EQT in Elk County
  • OH –3; light 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.

LAST CHANCE TO REGISTER!!
 
https://www.cantonchamber.org/utica-upstream

 


Upstream PA 2015 – April 16, 2015 Penn State

“Operating Successfully in a Cost Environment”

The past six months has seen considerable pricing pressure placed on contractors for the E&P companies.  How has your company been responding?  Being able to successfully adjust to the new normal for the oil and gas industry is critical to your company’s success.

Wood Mackenzie has published a study that stated cost reduction programs being enacted now could bode well for drilling 2016.  The E&P companies will have reduced their operational costs by 33% which enable them to drill more in 2016.  

At Upstream PA 2015, we have created panel which will discuss “Operating Successfully in a Cost Cutting.”  Representatives from Dawood Engineering, Best Line Inc. and Rigmaids will share with attendees what they are doing to strive and thrive in this challenging environment.

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

 

Save the Date “Get Ready for Summer Safety Seminar”
May 27, St.  Clairsville, OH

Latest facts and a rumor from the Marcellus and Utica Shale

  • Thoughts from the DUG Bakken Niobrara.  I attended my first DUG expo covering the Bakken and Niobrara.  It was an interesting time to attend since the two shale plays have seen considerable reduction in drilling activity.  What I heard:
     
    • The Bakken current rig count is 96 which down from 189 in early October 2014.
    • The rigs in the Bakken are focused in its core area which is four counties –Dunn 13 rigs; McKenzie 41; Mountrail 18; and Williams 19. Drilling in those counties is every active.  Those counties are compared to Carroll County, OH when the drilling started
    • Analysts feel there are 17 billion barrels of recoverable oil in the Bakken at $60 per barrel
    • The rig count is expected to level off between 90 – 100 rigs
    • In the Niobrara, the Wattenberg and Redtail area will continue to see drilling activity at somewhat lower levels.
    • Anadarko and Noble will be the most active in the Niobrara where both companies have committed a good portion of their CAPEX budgets to these regions.
       
  • Shell is buying the property in Beaver County, PA.  Seven years ago, a visitor to the Beaver County region near the Horsehead Corp. zinc smelter site here would have had a difficult time finding a hotel room to spend the night.

    That is no longer the case.

    Six new hotels have been constructed in the past three years, with more to be built on commercial property that is becoming more and more of a commodity.

    Three years ago, Shell leased the former Horsehead Corp. zinc smelter site to explore the feasibility of building an ethane cracker plant, with an estimated cost from $2.5 to $3 billion. Golden Opportunity - cracker plant

    One could say that the proposed Shell cracker plant is the proverbial golden goose laying a large basket of golden eggs in Monaca and surrounding Beaver County.

    It would be the first cracker plant built in the Northeast. A “cracker” converts ethane, a by-product of natural gas, to ethylene, which is used to make plastics, plastic bags, antifreeze and detergents.

    After three lease renewals, Shell exercised its option to buy the property on Nov. 7, 2014. The company said the purchase will help advance the permitting process. Shell has applied for an air-quality permit and has contracted with Consol Energy Inc. to ship ethane to the proposed plant. Consol is drilling 45 wet gas wells on 9,000 acres at the Pittsburgh International Airport.

    Shell also recently held a meeting with engineers last month at the state Department of Transportation building to talk about the next phase of the Route 18 realignment.

    In additional recent developments, Shell just purchased

    According to Beaver County Commissioner Joe Spanik, Route 18 currently runs past the plant itself. Shell is planning to move the highway about 1,000 feet into the hillside, and create a six-lane highway for a certain portion of it.

    Spanik said that, even though the plant is still “proposed” and not a sure thing as of yet – the “golden opportunity” awaiting the area is evidenced by the commercial development upswing as of late.
     
  • Williams looks to expand Atlantic Sunrise pipeline. Energy infrastructure company Williams said its Transco unit is seeking authorization from the Federal Energy Regulatory Commission (FERC) for its $2.1 billion Atlantic Sunrise expansion project.

    The expansion would transport roughly 1.7 billion cubic feet per day of natural gas (Bcf/d) to markets in the Mid-Atlantic and Southeastern US.

    “Atlantic Sunrise is a vital piece of North American energy infrastructure needed to transport low-cost, abundant supplies of natural gas from the Marcellus producing region in Pennsylvania to hungry markets along the Atlantic Seaboard,” said Rory Miller, Senior Vice President of Williams Partners’ Atlantic-Gulf operating area. “Shippers have signed long-term commitments for the expansion’s entire capacity ….”

    The project consists of compression and looping of the Transco Leidy line in Pennsylvania and various locations along its mainline between Pennsylvania and South Carolina, in addition to a new-construction pipeline segment, referred to as the Central Penn Line, connecting the northeastern Marcellus Shale play to the Transco mainline in southeastern Pennsylvania.

    The new construction segment will be jointly owned by Transco and a third party.

    Williams expects to place Atlantic Sunrise into service in the second half of 2017 as part of $4.8 billion in transmission projects planned to come online through 2017. Atlantic Sunrise adds to the list of Transco’s projects to connect supplies of domestic natural gas with demand on the Eastern Seaboard from New York City to the far Southeast.

    Transco, the nation’s largest-volume interstate natural gas pipeline system, is a wholly owned subsidiary of Williams Partners, of which Williams owns roughly 60%, including the general-partner interest.
     
  • Rex does JV to develop Butler Operating Area.  Independent oil and gas producer Rex Energy said, the company and private equity firm ArcLight Capital Partners have formed a joint venture to develop wells within Rex’s so-called Butler Operating Area, north of Pittsburgh.

    Under the terms of the JV, State College, PA-based Rex and an ArcLight affiliate will jointly develop 32 wells in the company's Butler Operated Area. ArcLight will participate and fund 35% of the well costs for the 32 wells.

    The JV agreement is expected to reduce Rex’s 2015 capital expenditure (CAPEX) program by $60 million, to $135-$145 million, or a 30% decrease at the midpoint of guidance.

    Total consideration for the transaction will be $67 million, with $16.6 million received at closing. Upon achieving certain threshold triggers of internal rate of return and return on investment on specific well groups, ArcLight's working interest will revert to 17.5%.

    In addition, ArcLight will have the option to participate as a 20% working interest partner in 17 additional Moraine East (Pennsylvania) wells in 2016.

    "This joint venture is consistent with our 2015 strategy to further hold by production our liquids-rich prospects in the Butler Operated Area, specifically in the Moraine East Area," said Tom Stabley, CEO, Rex.

    Rex today also provided an update for its first-quarter and full-year production and operating capital expenditure guidance, which takes into account the new JV with ArcLight.

    The company expects first-quarter production volumes to be at the midpoint of its previously announced guidance of 190-196 million cubic feet-equivalent per day (MMcfe/d).

    Full-year production is expected to range from 185 MMcfe/d-195 MMcfe/d, a 23% increase at the midpoint of guidance as compared to 2014 production volumes. Rex expects 2015 operating CAPEX to settle between $135-$145 million, down 30% at the midpoint of the updated 2015 operating CAPEX compared to the midpoint of the previous program of $180-$220 million.
     
  • Warburg Pincus to fund start up to work in Midcontinent and Rockies.  Private equity firm Warburg Pincus said Tuesday, March 31, it’s committing up to $500 million to back oil and gas exploration-production startup Independence Resources Management.

    Equity for the deal is split between the New York firm’s Warburg Pincus Private Equity XI LP, a $11.2 billion fund, and Warburg Pincus Energy, a $4 billion investment vehicle.

    Independence plans to acquire and develop onshore oil and gas properties in the Anadarko and other producing basins primarily in the Midcontinent and Rockies regions, it said in a release.
     
  • Monroe County Cracker location.  Information from a posting on GOMARCELLSHALE.com.  “Here is link to property transfer regarding the proposed cracker in Salem TWP Monroe County Ohio.  And no I don't know about the names on the transfer that took place the first week in March.  And there is no price listed on the property card.   However, I did get "a nod" that this is the site.”

    “Remember Monroe County formed a port authority recently (2014) and they work at undertaking these types of industrial/business transactions.”  (RUMOR)

http://monroecountyauditor.org/Data.aspx?ParcelID=180050010000
I reported last year that Appalachian Resins was going to build a cracker   plant in Monroe County, OH.  It appears that this project is moving forward.     

  • Columbia seeking approval for 161-mile pipeline. Texas-based Columbia Pipeline Group is seeking federal approval to build a new 161-mile pipeline for natural gas plus three compression stations in southeast Ohio and northern West Virginia.

    The company has filed initial paperwork for the Leach XPress Pipeline with the Federal Energy Regulatory Commission.

    The $1.4 billion pipeline would carry natural gas from Utica and Marcellus shales in Ohio, West Virginia and western Pennsylvania to markets served by Columbia Gas Transmission and Columbia Gulf Transmission in Mid-Atlantic and Gulf Coast states.

    The 36-inch diameter pipeline would transport up to 1.5 billion cubic feet of natural gas per day. That’s enough to heat 15,000 American houses for one year.

    The Columbia Pipeline Group is a unit of Indiana-based NiSource Inc. It is also the parent company of Columbia Gas of Ohio.

    The new pipeline would be built by Columbia Transmission.

    The project is supported by four drilling companies: Oklahoma-based American Energy Partners LP, Range Resources Corp., Noble Energy Inc. and Kaiser Marketing Appalachia LLC. The four companies have signed up to ship their natural gas in the new line.

    Pipeline construction could begin in late 2016 with service beginning in late 2017.
     
  • How big is the Marcellus Shale?  The Marcellus Shale now accounts for 36 percent of U.S. shale gas production, yielding 14.4 billion cubic feet of natural gas per day, according to the U.S Energy Information Administration.

    Overall, the Marcellus is delivering more than 18 percent of the total of the country's dry gas production.

    The EIA also has updated its maps showing the extent and thickness of the shale layer. According to the maps, the shale play covers about 72,000 square miles. Most of the producing wells are above portions of the shale that lie between 2,000 feet to 6,000 feet below sea level.

    And most of the producing wells tap portions of the shale that are more than 50 feet thick.
     
  • Seneca hits big well with its first Utica well in Tioga County, PA.  Seneca recently completed an exploration well, targeted for the Utica Shale formation, on a pad located within its DCNR 007 tract in Tioga County, Pa. The well had a 24-hour peak production rate of 22.7 million cubic feet ("MMcf") of natural gas per day. The well was drilled to a true vertical depth of approximately 12,200 feet, had a treatable lateral length of 4,640 feet, and was completed over 30 stages.

    Ronald J. Tanski, President and CEO of National Fuel Gas Company, stated, "We are very pleased with the initial production results from our first Utica Shale well in Tioga County, Pa. This well, along with wells drilled by other operators in the area, have de-risked the Utica potential of our 10,000 acres on DCNR Tract 007. We estimate resource potential on this tract alone of approximately 1 trillion cubic feet. With these strong results in hand our team is evaluating options to develop this acreage in the next few years, depending on local gas prices and pipeline take-away capacity. We have additional Utica potential not only in Tioga County, but across much of our large Pennsylvania acreage position. Our next Utica exploration well is planned for fiscal 2016."

    Could Tioga County in Northern PA be the next big Utica Shale play?  Last summer, Shell hit oil with two big Utica Shale wells in the same county.  We know that Shell is very active in Tioga County as the result of these successes.   
     
  • Permian pipeline to Mexico.  ONEOK Partners on Wednesday, April 1, said it’s entered into a 50-50 joint venture with a subsidiary of Mexico City-based natural gas infrastructure company Fermaca Infrastructure BV to construct a $450-$500 million pipeline from the Permian Basin to Mexico.

    The Roadrunner Gas Transmission pipeline project extends from ONEOK Partners' ONEOK WesTex Transmission natural gas pipeline system at Coyanosa in West Texas, west to a new international border-crossing connection near San Elizario, TX, where it will connect with Fermaca's Tarahumara Gas Pipeline.

    The project, to be built in phases, includes roughly 200 miles of new, 30-inch pipeline currently designed to transport up to 640 million cubic feet per day (MMcf/d) of natural gas with up to 570 MMcf/d to be transported to Mexico markets.

    The pipeline’s initial phase for 170 MMcf/d of capacity is expected to be completed by the first quarter of 2016. The second phase, which will increase the pipeline's capacity to 570 MMcf/d, is projected to be completed in the first quarter 2017.

    The third and final phase of the project is expected to be completed in 2019 and will increase capacity to 640 MMcf/d. ONEOK will manage project construction and will be the pipeline operator upon completion.
     
  • Monthly Nat Gas production information now available in PA.  In an effort to increase efficiency and consistency, the Department of Environmental Protection (DEP) now collects natural gas production data from operators of unconventional natural gas wells on a monthly basis. Production data was previously reported on a semi-annual basis every February and August.

    The Unconventional Well Report Act, passed by the General Assembly on October 22, 2014, requires operators of unconventional wells to supply monthly gas production data to DEP. This requirement took effect in the beginning of this year, with January’s production data due by midnight on March 31. All subsequent months’ production data will be due 45 days after the end of the month of production. The February 2015 monthly production report is due no later than April 14.

    As of the March 31 deadline, 80 percent of operators reported their production for January. The operators that met the deadline represent 99.5 percent of unconventional natural gas wells in Pennsylvania.

    We’ll look for this information and put into Facts & Rumors.

Rig Count

Baker Hughes Rigs count for the week April 3, 2015

  • PA
    • Marcellus 48 down 1
    • Utica 2 unchanged
  • Ohio
    • Utica 27 down 1
  • WV
    • Marcellus 22 up 1
  • TX
    • Eagle Ford – 137 unchanged
    • Permian Basin  237 down 5
  • NM
    • Permian Basin – 48 down 2
  • ND
    • Williston – 90 down 6
  • MT
    • Williston – 1 unchanged
  • CO
    • Niobrara –27 unchanged
       
  • TOTAL U.S. Rig Count 1028 down 20

PA Permits for March 26 2015 to April 2, 2015

       County              Township           E&P Companies

1.    Bradford             North Towanda    Chesapeake
2.    Bradford             Standing Stone   Chesapeake
3.    Bradford             Terry                  Chesapeake
4.    Bradford             Wilmot               Chesapeake
5.    Bradford             Wyalusing          Chesapeake
6.    Clarion               Toby                   N.E. Natural Ener.
7.    Elk                    Horton                EQT
8.    Elk                    Horton                EQT
9.    Elk                    Horton                EQT
10.    Elk                  Horton                EQT
11.    Elk                  Horton                EQT
12.    Elk                  Horton                EQT
13.    Lawrence         Mahoning           Hilcorp
14.    Lawrence         Mahoning           Hilcorp
15.    Lawrence         Mahoning           Hilcorp
16.    Lycoming         Hepburn             Inflection Energy
17.    Potter              West Branch      Chesapeake
18.    Washington     Robinson            Range            

OH Permits – weeks ending March 28, 2015

        County                 Township                   E&P Companies

1.    Jefferson                Mt. Pleasant                Amer. Ener. Utica
2.    Jefferson                Mt. Pleasant                Amer. Ener. Utica
3.    Jefferson                Mt. Pleasant                Amer. Ener. Utica

Maximize your 2015 marketing budget by being a member in ShaleDirectories.com

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

 

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