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Permit Activity last week.  

  • PA – 24; EQT in Greene and Elk Counties; Rice in Washington County
  • OH –1; Protégé Energy III in Washington County

Expo/Industry events for the next few months

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 events the place to be!

Stop by our booth #40

Register now to exhibit!  www.ohiovalleyoilgasexpo.com

DUG Permian Basin
May 19-21, 2015
Fort Worth, TX

The DUG Permian Basin conference and exhibition provides a 360° view of what's happening in Permian Basin today, and what you need to do to stay ahead of its enormous growth curve. If you are looking to keep pace with the latest technology advances, drilling plans and pipeline build-outs, DUG Permian Basin is the your connection to all of the action. Join us May 19-21, 2015 in Fort Worth, TX to discover new business opportunities and network with other individuals active in the Permian Basin.

www.DUGPermian.com

Energy & Education Expo
May 20, 2015
Kiwanis Wyoming County Fairground
Meshoppen, PA

The Wyoming County Chamber of Commerce announces the Energy & Education Expo sponsored by Southwestern Energy, Sugar Hollow Water Services & Williams.  
 
The energy industry in the Marcellus Shale region is evolving and the Wyoming County Chamber of Commerce wants to assist you in staying apprised of the focus and next steps. The event is free to the public and open for all to attend from 11:00am - 3:30pm.

Vendors for the Energy & Education Expo are encouraged to register NOW!

“Get Ready for Summer Safety Seminar”
May 27, 2015
Undo’s
St. Clairsville, OH

Summertime is the height of the drilling season in the oil and gas industry.  It is a time when workers have to be especially aware of the safety issues and how it relates to work practices, clothing and general health.

The “Get Ready for Summer Safety Seminar” will the first safety seminar of its type held in the Marcellus and Utica Shale regions of OH, WV and PA.  

The topics to be covered in the seminar are:

  • Summer means: It’s storage tank vapor hazard season
  • Bulwark – Flame Resistant Clothing
  • Timberland PRO – Foot protection
  • HexArmor – Hand protection
  • Sqwincher – Hydration
  • Strata Products Worldwide – OSHA training and gas meters

Register here:  http://bit.ly/1BEDfRr

Utica Midstream
June 10, 2015
Walsh University
North Canton, OH

The midstream business is very active in Ohio. There are 13 pipelines that are being built or in the early start up phases in Ohio. If you want to get the latest information from the major midstream companies, plan on attending Utica Midstream seminar. It will feature speakers from Williams, Marathon Petroleum, EnLink, Spectra Energy and Blue Diamond.

Register now! https://www.cantonchamber.org/utica-midstream

DUG East
June 23-25, 2015
Pittsburgh, PA

The DUG East conference and exhibition is the world’s leading event focused on unconventional resource development in the vast Marcellus and Utica shale plays, as well as emerging plays throughout the Appalachian region. Each year, thousands of oil and gas industry professionals gather for two days of world-class presentations and exclusive networking opportunities. Conference sessions are impactful and informative, covering a wide range of timely topics around exploration, drilling, completions and production.

www.DUGEast.com

Latest facts and a rumor from the Marcellus and Utica Shale

  • Second cracker plant coming to OH.  A Thailand energy company has picked Ohio over West Virginia for the potential location of a multi-billion dollar petrochemical cracker complex.

    Meanwhile, the Brazilian company behind the potential West Virginia cracker continues to say volatility in global energy prices is delaying the decision to green-light its project.

    Ohio Gov. John Kasich announced Wednesday PTT Global Chemical, Thailand’s largest integrated petrochemical and refining company, has partnered with Japan-based Marubeni Corp. and selected a site in Belmont County, which borders West Virginia in the area around Wheeling and Moundsville, to locate the potential plant. The companies will spend the next 12 to 16 months completing engineering, designs and permitting at the Ohio site, before making a final investment decision to proceed with the project sometime in 2016.

    If approved, it would take about three and a half years to build the cracker plant, which takes ethane from natural gas and “cracks” it into ethylene, which is used to make plastics and resins used in everything from packaging to pharmaceuticals.
     
  • A fifth cracker plant coming to the Appalachian Basin.  A major Middle East entity is looking to leverage land from Bayer and GE in Parkersburg, WV to build a world scale cracker plant. As with all of these major investments a lot of dominos have to fall in the right direction and it will take years to play out. It does highlight the continuing interest in Appalachian chemical and plastic production.
     
  • Update on the cracker plants.  The announcement of another cracker in the Appalachian Basin has prompted me to provide an update to the various comments that I’ve heard regarding cracker plants in the Appalachian Basin.
    • Shell cracker plant – supposedly, Shell has told PA Governor Wolf that if his severance tax plan adversely affects the oil and gas industry, it may not proceed with the cracker plants.  After all if there is less drilling in PA, where will Shell get its feedstock?  (RUMOR)
    • Braskem plant – the Odebrecht officials are telling everyone they are re-evaluating its plan.  I am wondering if the Petrobras problems are impacting this development.
    • Appalachian Resins has supposedly purchased land in Salem Township Monroe County, OH. 
    • PTT Global Chemical – Marubeni joint venture has just announced plans for a cracker plant in Belmont County, OH
    • Foreign entity is looking in Parkersburg, WV.

      The possibility of five cracker plants in the Appalachian Basin is a phenomenon that no one visualized four or five years.  The intelligent hypothesis was that all the Appalachian wet gas was going to the Gulf.  It looks like a fair amount natural gas will stay in the Appalachian Basin and be the foundation for a petrochemical industry in PA, OH and WV.
       
  • New E&P Company in OH.  Protégé Energy III has received its permit for a well in Washington County, OH.  I meet the Protégé chairman at OOGA.  It’s good to see that the company has received its first permit.  Look for Protégé drill a few wells in OH this year.
     
  • Exporting oil ban maybe lifted.  The chance of the US government lifting the ban on crude oil exports this year is between 40% and 50%, Scott Sheffield, CEO, Pioneer Natural Resources, said Tuesday, April 21.

    Sheffield said he’s recently held talks with members of Congress and Obama administration staff about removing the decades-old restriction on shipping unrefined crude overseas.

    On Monday, April 20, Sen Lisa Murkowski, R-AK, said she would introduce legislation this year to allow US crude exports.

    The odds of lifting the ban will plummet in 2016 as attention shifts to the U.S. presidential race, Sheffield said. However, he sees an 80% to 90% chance American exploration and production companies will be allowed to export crude by early 2017.

    Last year, the Commerce Department gave Pioneer and Enterprise Products Partners permission to begin selling condensate to foreign buyers.

    The US banned crude exports in 1975 in a move to promote domestic oil production and build its reserves amid an oil crisis precipitated by a petroleum embargo by Arab nations.

    Sheffield also told CNBC he believes US oil production will begin to decline soon, noting growth has slowed for five consecutive weeks and total output has stalled at 9.4 million barrels per day (MMBPD).

    In the next six months, he thinks production will bottom at 9.1 MMBPD to 9.62 MMBPD.
     
  • New operator in Tioga County, PA.  Travis Peak is a new E&P Company that will be drilling in this county along with Shell and Seneca.  (RUMOR)
     
  • Nat Gas up slightly in PA. Unconventional natural gas production in Pennsylvania during February totaled roughly 356 billion cubic feet (Bcf), or roughly 12.7 Bcf/d, up slightly from January’s production of 12.6 Bcf/d, according to data released earlier this week by the state Department of Environmental Protection (DEP).

    Despite 28 vs 31 days, however, natural gas liquids production in February was up slightly from January, to 434,000 Bbl, from 416,000 Bbl, according to the DEP.
     
  • Upstream PA 2015 recap.  “We all have skin in the game,” said David Spigelmyer, President, Marcellus Shale Coalition (MSC), at the April 16th Upstream PA 2015, referring to Pennsylvania natural gas production and consumption. Upstream PA 2015 was held at the Penn Stater Conference Center in State College, PA and hosted by Shale Directories, the leading online directory that connects the oil and gas industry with local businesses in the major shale plays throughout the U.S.

    Concentrating on the Marcellus Shale in Pennsylvania, the event started at 9am and ran until 2pm, in which guest speakers made appearances, networking breaks offered insight, and lunch was served. Emceed by Joe Barone, President, Shale Directories, the guest speakers of the day included: David Spigelmyer; George Stark, Director of External Affairs, Cabot Oil & Gas Corporation; Matt Henderson, Public Relations Manager, Inflection Energy; Rick Stouffer, Senior Energy Editor, Shale Energy Business Briefing; Robert Johnson, President, ADKL; John Felmy, Chief Economist, American Petroleum Institute (API); Jim Rodgers, Marketing & Business Development Director, Dawood Engineering; Jim Cheunes, Market Manager, Best Line, Equipment; and Dave Pfleegor, President, Rigmaids.

    Key topics and discussion thrown around included shale oil and gas education, Marcellus Shale technologies and innovations, the Atlantic Sunrise Pipeline, natural gas power generation, and PA’s severance tax and impact fee. Driving the message home, Spigelmyer relayed, “To turn your lights on 365 days a year, 24 hours a day, you need gas, coal, and nuclear power to provide baseload fuel supply.”

    “Fossil fuels do not only involve power generation, but also includes: steel, glass, plastics, chemicals, fertilizers, powdered metals, and pharmaceuticals,” continued Spigelmyer. This is exactly what Spigelmyer means by everyone having “skin in the game.”
     
  • U.S. Nat Gas March production up.  Natural gas production in the Lower 48 States grew 1.8 billion cubic feet per day (Bcf/d) in March, to 73.4 Bcf/d, according to Platts’ Bentek Energy.

    The Northeast continues to lead all regions in production, setting a new record in March of 19.9 Bcf/d.

    Production last month was 8%, or 5.3 Bcf/d, greater than the daily average production in March 2014, and up 1% from February totals, Bentek found.

    “While last month's US natural gas production made a full recovery from freeze-offs experienced in February, continued offshore maintenance curtailed production by up to 300 million metric cubic feet per day (MMcf/d) until the end of March," said Sami Yahya, Energy Analyst, Bentek. "Northeast production managed a new record of 19.9 Bcf/d late last month, pushing US natural gas production to its highest daily level this year of 73.3 Bcf/d."
     
  • Shale oil March production up.  March oil production from shale formations in North Dakota and Texas jumped 559,000 barrels per day (BPD) – 25% -- from March 2014’s production total, according to Bentek Energy, an analytics/forecasting unit of Platts.

    In South Texas, Eagle Ford Shale play crude oil production averaged 1.6 million barrels (MMBbls) last month, up 344,000 BPD, or 28%, from March 2014, according to Sami Yahya, an Energy Analyst with Bentek.

    Crude oil production in the North Dakota section of the Bakken averaged 1.2 MMBPD in March, Bentek data shows, 215,000 BPD higher than the year-ago level.
     
  • BG purchase gives Shell more acreage in PA.  Royal Dutch Shell's agreement to buy BG Group for $70 billion may give it a bigger footprint in the Marcellus shale play, an area that Shell had backed away from in 2014, reports the Pittsburgh Business Times. The newspaper says BG has a 50-50 joint venture agreement with Exco Resources Inc. for conventional and unconventional oil and natural gas assets in Pennsylvania. Some of that acreage is not far from what Shell affiliate SWEPI sold to Rex Energy Corp. last summer.
     
  • Rex looking to make a sale or JV on Illinois assets.  While it previously announced it’s pursuing the sale of its 60% ownership interest in its water service unit, Keystone Clearwater Solutions, independent oil and gas producer Rex Energy revealed Monday, April 20, it’s also looking to sell or find a joint-venture partner for its operated assets in the Illinois Basin.

    The State College, PA-based Company has hired Evercore Group as its financial advisor to pursue the potential sale or JV of its operated assets in Illinois, Indiana, and Kentucky.

    Rex Energy produced 1,873 barrels per day (BPD) of crude oil from its Illinois Basin holdings in the first quarter, and is one of the largest producers in the basin.

    Proceeds from both transactions would enhance Rex’s liquidity position and improve flexibility in the company's 2015 and 2016 development program, it said.
     
  • Cabot Oil & Gas 1ST Qtr. update.

    Marcellus Shale

    During the first quarter of 2015, the Company averaged 1,727 million cubic feet (Mmcf) per day of net Marcellus production, an increase of 43 percent over the prior year's comparable quarter and a 16 percent sequential increase over the fourth quarter of 2014. These production levels were primarily the result of an average gross operated Marcellus production rate of 2,018 Mmcf per day during the first quarter. Cabot plans to reduce its average gross operated Marcellus volumes in the second quarter of 2015 to between 1,550 and 1,600 Mmcf per day as the Company monitors the supply and demand balance in Appalachia.

    "While pricing pressure remains a challenge for Marcellus gas in the near-term, Cabot's operating efficiencies in the play continue to exceed expectations," noted Dinges. During the quarter, Cabot drilled 26 wells to total depth in the Marcellus Shale and averaged 15.0 drilling days for spud-to-rig release, representing the Company's best quarter since inception of the program. Year-to-date, the Company's Marcellus Shale program has realized a 15 to 20 percent decrease in drilling and completion costs as compared to the 2014 program.

    Cabot is currently operating three rigs in the Marcellus Shale and plans to remain at this level for the remainder of the year.

    Eagle Ford Shale

    Cabot's net production in the Eagle Ford Shale during the first quarter of 2015 was 17,831 barrels of oil equivalent (Boe) per day, an increase of 145 percent over the prior year's comparable quarter. This included 17,017 barrels of liquids per day, an increase of 149 percent over the prior year's comparable quarter. "Our daily Eagle Ford Shale liquids production increased 19 percent sequentially over the fourth quarter of last year, driven by strong performance from the 20 wells that were placed-on-production during the quarter including six wells that were located on the acreage we acquired in 2014," explained Dinges. "These six wells, in addition to four wells we placed on production during the fourth quarter, have outperformed the previous operators' cumulative oil production at 30, 60 and 90 days by over 50 percent on average, highlighting the value-enhancing proposition of these bolt-on acquisitions."

    Cabot's Eagle Ford Shale program continues to realize significant improvements in operating efficiencies and cost savings. During the quarter, Cabot drilled 24 wells in the Eagle Ford Shale to total depth and averaged 10.6 drilling days for spud-to-rig release, a 25 percent reduction compared to the 2014 program. On the completions side, the Company averaged 6.4 completed frac stages per crew day during the first quarter of 2015, an increase from 5.5 completed frac stages per crew day for the 2014 program. Year-to-date, the Company's Eagle Ford Shale program has realized a 20 to 30 percent decrease in drilling and completion costs as compared to the 2014 program.

    Cabot is currently operating two rigs in the Eagle Ford Shale and plans to reduce to one rig by the end of May.  
     
  • EQT 1ST Qtr. update.  EQT Corp. announced this morning first-quarter earnings of $173.4 million, or $1.14 per diluted share, compared to $192.2 million, or $1.26 per diluted share, in the year-ago quarter.

    The Pittsburgh natural gas company reported a 37 percent growth from the year-ago quarter in sales volume in its production business. But the company said its average natural gas price in the first quarter fell from the same quarter last year.

    “The average realized sales price was 39 percent lower than last year, which more than offset the impact of the increase in sales volume,” the company said in its press release.

    The company’s drilling operations continued to focus on the Marcellus Shale formation, which underlies northern Appalachia. Of 49 wells drilled in the first quarter, 36 were in the Marcellus. Eleven were in the Devonian Shale in northern West Virginia, and two were Permian Basin in western Texas.

    In response to low prices, EQT has cut its capital expenditures by $150 million to $1.9 billion. The company also decided to suspend drilling on its acreage in the Permian, where the company had already reduced drilling to the minimum number of wells to hold certain leases.

    Therefore, the company lost development rights to about 700 acres, said Steven Schlotterbeck, EQT executive vice president and president for exploration & production.

    “It’s always a tough decision to let leases expire, but we think, in this environment, that’s a prudent economic decision,” Mr. Schlotterbeck said.

    Meanwhile, EQT’s midstream business continued to grow, with its gathering revenue increasing by 44 percent and transmission revenue by 38 percent from the year-ago quarter. Its midstream operating expenses were $76.9 million — an $11.2 million increase from the same period last year — which is “consistent with the growth of the business,” the company noted.
     
  • Consolidation among fracturing.  Half of the 41 hydraulic fracturing companies operating in the US will be closed or sold by year-end due to steep spending cuts by oil companies, an executive with Weatherford International Plc said, Wednesday, April 22.

    There could be roughly 20 companies left to provide hydraulic fracturing services, Rob Fulks, Pressure Pumping Marketing Director at Weatherford, said at the IHS CERAWeek conference in Houston.

    Demand for hydraulic fracturing has declined as customers leave wells uncompleted because of low crude prices.

    There were 61 hydraulic fracturing service providers in the US at the start of 2014. Consolidation among bigger players began with Halliburton announcing plans to buy Baker Hughes in November for $34.6 billion, and C&J Energy Services buying the pressure-pumping business of Nabors Industries.

    Oil companies are cutting more than $100 billion in capital expenditure spending globally following the crude price plummet. Hydraulic fracturing pricing is expected to fall as much as 35% this year, according to HIS unit PacWest.

    Fulks wouldn’t say if Weatherford is seeking to acquire other hydraulic fracturing companies or their unused equipment.

Rig Count

Baker Hughes Rigs count for the week April 17, 2015
     

  • PA
    • Marcellus 48 up 1
    • Utica 1 unchanged
  • Ohio
    • Utica 25 unchanged
  • WV
    • Marcellus 21 down 1
  • TX
    • Eagle Ford – 115 down 8
    • Permian Basin  201 down 11
  • NM
    • Permian Basin – 45 down 1
  • ND
    • Williston – 78 down 5
  • MT
    • Williston – 1 unchanged
  • CO
    • Niobrara –27 up 1
       
  • TOTAL U.S. Rig Count 932 down 22

PA Permits for April 16 to April 23, 2015

       County                Township           E&P Companies

1.    Bradford                Herrick               Southwestern
2.    Clinton                  Grugan               Anadarko
3.    Elk                        Jay                    EQT
4.    Elk                        Jay                    EQT
5.    Elk                        Jay                    EQT
6.    Elk                        Jay                    EQT
7.    Elk                        Jay                    EQT
8.    Elk                        Jay                    EQT
9.    Greene                   Morris               EQT
10.    Greene                  Morris               EQT
11.    Greene                  Morris               EQT
12.    Greene                  Morris               EQT
13.    Greene                  Morris               EQT
14.    Lycoming               Cascade           Anadarko
15.    Lycoming               Gamble            Anadarko
16.    Sullivan                  Shrewsbury      Exco
17.    Susquehanna          Oakland          Southwestern
18.    Susquehanna          Rush              Chesapeake
19.    Washington            West Pike       Rice
20.    Washington            West Pike       Rice
21.    Washington            West Pike       Rice
22.    Washington            West Pike       Rice
23.    Washington            West Pike       Rice
24.    Washington            West Pike       Rice

OH Permits – week ending April 18. 2015

       County            Township      E&P Companies

1.    Washington      Fearing         Protégé Energy III

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

Midstream PA