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Permit Activity last week.

  • PA – 22; EM Energy PA in Butler County; Southwestern in Susquehanna; EQT in Washington
  • OH –6; American Energy Utica in Belmont County; Chesapeake in Carroll

Expo/Industry events for the next few months

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

Visit us at booth #837

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

  • Ohio Valley Oil & Gas Expo.  Kudos to Rick Frio, Larry Merry, Belmont County Port Authority, Belmont County Commissioners and Shale Media Group for a very successful expo.  There was a considerable amount of energy at the event which was driven by the drilling in Belmont and Harrison Counties and very recent announcement of PTT cracker coming to Belmont County.

    With all expos of this type, I hear a number of rumors.  Here are a couple of them:
     
    • American Energy Partners is going to change its name because it will probably go public and the name is confusing.  Makes sense (RUMOR)
    • While this is not an Ohio rumor, it certainly makes sense.  Landmen are all over Mansfield, PA, the county seat for Tioga County.  In previous Facts & Rumors, I’ve mentioned that Shell and Seneca have hit oil in the Utica in Tioga County.  It makes sense that the Landmen are in Tioga County.  The leases are expiring and the find of oil in the Utica makes it a “hot spot” in PA. (RUMOR)
       
  • The next big manufacturing “thing” in the Marcellus and Utica? Fertilizer Plants.  Now that it looks like there are possibly five crackers in play in the Marcellus and Utica everyone is wondering what’s next?  I heard from two separate sources that fertilizer companies are beginning to look in PA and OH to build plants.  It makes sense.  Nitrogen is a key component of fertilizer.  The primary raw material for nitrogen production is natural gas, but nitrogen can also be produced from coal, fuel oil and naphtha.  The U.S. is the largest importer of fertilizer in the world.  The market is here.  Look for fertilizer plant news in the not too distant future.  (RUMOR)
     
  • Aubrey raising $200 million.  Aubrey McClendon is raising additional cash for new oil and gas deals, via a specialized, $200 million investment vehicle that should go public soon.

    Avondale Acquisition, a so-called special-purpose acquisition company, or SPAC, will soon launch an initial public offering, with McClendon as the company's chairman and founder.

    The company describes itself in Securities and Exchange Commission (SEC) filings as a "newly organized blank check company" that will focus on potential mergers or other deals with existing businesses in the onshore US oil and gas sector.

    Avondale plans to sell to the public 20 million units, with each unit containing one share of common stock and one-half of one warrant, according to the SEC filing, for $10/unit. The company will leverage the experience of McClendon's current drilling holding company, privately-held American Energy Partners, to select its investments.

    Avondale's effort hit a snag in February, when Chesapeake filed suit against its former co-founder, his current energy holding company AEP and several related parties. The suit accused McClendon of stealing proprietary information about potential drill sites from Chesapeake during his last days as CEO, early in 2013.

    McClendon has denied the charges, saying he was entitled to a wide swath of drilling information as a result of his continuing investments in 16,000 Chesapeake wells.
     
  • Range has big 1st Qtr.  Range Resources announced its first-quarter results, which had a couple big highlights.

    During the first-quarter, which ended on March 31st, Range Resources recorded a few key events and statistics that occurred:

    -Production volumes reached a record high, averaging 1,328 Mmcfe per day, a 26% increase over the -prior-year quarter.

    -Unit costs declined $0.53 per mcfe, or 15% compared to the prior-year.

    -Washington County Marcellus well was brought on line in late April with a 24-hour production rate of 43.4 Mmcfe per day. This is a new record and the highest rate ever for any Marcellus well.

    -Record Utica well has cumulative production to date of 1.2 Bcf under constrained conditions.

    -New well in dry gas area of Washington County, Pennsylvania was brought on line in first quarter at a 24-hour production rate of 31.3 Mmcf per day.
     
  • Two new Appalachian pipeline projects.  Columbus Pipeline Partners is a newly public subsidiary of Columbia Gas parent NiSource Inc.

    Two new Appalachian projects from the parent company of Columbia Gas of Ohio are reaching a “critical mass.”

    The binding open season, in which Columbia Pipeline Partners LP (NYSE:CPPL) gets natural gas drillers to commit to its Mountaineer XPress and Gulf Xpress projects, ended April 23.

    Management said Thursday that they are “very encouraged” by the open season.

    The Mountaineer Xpress pipeline will include 150 miles of new pipeline that could add up to 2.7 billion cubic feet per day of transportation capacity.

    It would take gas from the Utica and Marcellus shale plays, including the gas underneath much of eastern Ohio.

    The Gulf XPress project would assist gas transportation by adding infrastructure like compressor stations on a path from Appalachia to the south, ending in southern Louisiana.

    Columbia Pipeline Partners, a newly public subsidiary of Columbia Gas parent NiSource Inc. (NYSE:NI), said the projects could total $2.6 billion in investment. The projected in-service date is late 2018.
     
  • Antero 1ST Qtr. update.  Antero Resources Corp. reported increased production from Ohio’s Utica Shale in the first quarter of this year despite low commodity prices that cut income.

    Production grew by 17 percent from the previous quarter and by 89 percent from a year ago, the Denver-based company said Thursday in an earnings call with financial analysts and the media.

    Net daily production averaged 1,485 million cubic feet of natural gas equivalents per day, a company record.

    It got 40,074 barrels per day of oil and natural gas liquids. Liquids accounted for 16 percent of the quarter’s production. That is a 32 percent increase from the previous quarter and a 145 percent increase from a year ago, the company said.

    Antero Resources, one of the biggest players in the Utica and Marcellus shales, intends to complete 45 Utica wells in the next two quarters, with 21 of those wells being developed on three seven-well pads in Ohio. It started production from 16 Utica wells in late 2014.

    Its Utica production hit a record high 274 million cubic feet of natural gas equivalents per day. That includes 11,300 barrels per day of liquids.

    The firm completed 41 Marcellus Shale wells in Pennsylvania in the first quarter. Those wells have long laterals that averaged 8,150 feet.

    Previously, Antero Resources announced plans to cut its drilling because of low commodity prices in 2015.

    It is postponing completion of 50 wells in Pennsylvania’s Marcellus Shale from 2015 into 2016.

    Antero has 11 rigs working in Ohio and Pennsylvania, down from 21. It has cut completion crews in the two states from 10 to seven.

    The company said it is eager for additional pipelines to be built into eastern Ohio late this year so that it can ship natural gas to higher-paying markets.

    It intends to continue drilling most heavily in the liquid-rich area in eastern Ohio, chairman and CEO Paul M. Rady said.
     
  • Consol’s focus in the Marcellus and Utica.  After releasing its first-quarter reports, Consol Energy has decided to shrink its focus in Ohio to only two counties.

    During last quarter, Consol focused much of its drilling in five counties in the Utica and Marcellus Shale formations. Two of the counties were in Pennsylvania, one in West Virginia and two in Ohio.  The two remaining Ohio counties were Noble and Monroe.  Noble operations focused on wet gas development and Monroe operations concentrated on dry gas operations.

    As reported by the Columbus Business First, during last year, when commodity prices were double what they are now, Consol was considering multiple counties within Ohio for drilling operations.  However, even though the company has managed to set gas production records, its first-quarter profit fell by 32 percent.  The drop in profit and decrease in commodity prices has caused Consol to reconsider expanding into more Ohio counties.

    Currently, Consol has around 614,000 acres in the Utica Shale; 118,000 of them are located in Ohio.  Consol has also pushed its switch from coal to natural gas development over the last year, mainly focusing on the Appalachian Shale region.  The company has recently developed a new strategy that involves selling coal and natural gas to the same utility based upon its electrical generation demands.
     
  • Gov’t. says only regional transmission lines needed.  US Department of Energy Secretary Ernest Moniz said Tuesday, April 28, America needs a limited number of natural gas transmission lines built to meet regional supply needs, rather than a large build-out nationwide.

    One week after the Obama administration released its Quadrennial Energy Review (QER), Moniz told the Senate Committee on Energy & Natural Resources the government had found a substantial build-out of gas transmission line capacity had occurred in the last decade.

    "There is quite a bit of reserve capacity there," Moniz said. "We're not looking at a national, big build-out from what we have. There will be regional needs targeted around specific supply centers."

    During the hearing, Sen Lisa Murkowski (R-AK) raised concerns over the current ban on US crude oil exports.

    “As we are talking about energy infrastructure and policies for the country going forward, we need to be looking at some of the antiquated policies that we have in place, including the 40-year ban on crude oil exports,” Murkowski said.
     
  • Gov’t says transmission lines urgently needed to New England.  Skyrocketing wintertime Northeast gas prices are a pipeline problem and not due to a paucity of regional natural gas supply, a Maine lawmaker told US Energy Secretary Ernest Moniz this week.

    Sen Angus King (I-ME) added the potential for liquefaction and export of US supplies is a worry as it would take gas out of a market where it is needed.

    During a Senate Energy and Natural Resources Committee hearing on Tuesday, April 28, King asked Moniz to use his department to help coordinate federal and state efforts to expand natural gas pipelines throughout New England.

    "This is an infrastructure problem and it's absolutely urgent for our region," King told Moniz. "We went into natural gas in a big way, as you know, starting in about the year 2000; now 50-60% of our electricity comes from natural gas.”

    There are projects in the works to help alleviate the gas-constrained Northeast market, Moniz said. A worry expressed by King to the Secretary is the potential reversal of the existing Spectra Energy Maritimes & Northeast Pipeline to serve any of several proposed East Coast liquefied natural gas (LNG) terminals that have suggested they could use the pipeline’s capacity.
     
  • Big changes to ND oil tax legislation.  North Dakota has approved a reorganization of its oil tax code, cutting the overall rate and ending a tax break of more than $5 billion slated to begin in June.

    Governor Jack Dalrymple signed the measure on Wednesday, April 29, lowering the combined rate crude producers will pay by 1.5 percentage points.

    The bill also eliminates, starting in December, a so-called "large trigger" tax break worth as much as $5.3 billion to oil producers over a two-year period if it ever took effect.

    The large-trigger tax curtails oil extraction taxes during the first 24 months of a well's life. It is designed to encourage production during periods of low oil prices.

    "This will provide a steadier, predictable tax system over time," Dalrymple said. "It's a trade-off between an unpredictable oil tax regime and one that's more consistent."

    Sponsors in the state legislature said the new tax scheme will make it easier to forecast oil tax revenues, a prospect that has grown trickier as prices have dropped more than 40% since last summer.

    The bill, which passed both houses of the legislature by wide margins, last week, reduces the oil extraction tax to 5%, from 6.5% starting Jan 1.

    The rate rises to 6% if crude prices average above $90/Bbl for three consecutive months.

    The bill does not alter North Dakota's 5% gross production tax; the oil extraction tax is a levy on the industry itself.
     
  • News about Appalachian Resins.  Below is a recent article from Downstream Today which gives details to Appalachian Resins cracker plant and its development.

Rig Count

Baker Hughes Rigs count for the week May 1, 2015
     

  • PA
    • Marcellus 46 down 2
    • Utica 1 unchanged
  • Ohio
    • Utica 25 unchanged
  • WV
    • Marcellus 21 unchanged
  • TX
    • Eagle Ford – 110 down 5
    • Permian Basin  196 down 6
  • NM
    • Permian Basin – 43 down 2
  • ND
    • Williston – 79 up 1
  • MT
    • Williston – 1 unchanged
  • CO
    • Niobrara –27 unchanged
       
  • TOTAL U.S. Rig Count 905 down 27

PA Permits for April 23, to April 30, 2015

      County                 Township             E&P Companies

1.    Beaver                  Brighton                Chesapeake
2.    Bradford                Rome                   Chesapeake
3.    Butler                   Oakland                EM Energy PA
4.    Butler                   Oakland                EM Energy PA
5.    Butler                   Oakland                EM Energy PA
6.    Butler                   Oakland                EM Energy PA
7.    Butler                   Oakland                EM Energy PA
8.    Butler                   Oakland                EM Energy PA
9.    Butler                   Oakland                EM Energy PA
10.    Susquehanna      Gibson                  Cabot
11.    Susquehanna       New Milford          Southwestern
12.    Susquehanna       New Milford          Southwestern
13.    Susquehanna       New Milford          Southwestern
14.    Susquehanna       New Milford          Southwestern
15.    Susquehanna       New Milford          Southwestern
16.    Tioga                   Chatham              Shell
17.    Washington          Donegal               Southwestern
18.    Washington          Union                   EQT
19.    Washington          Union                   EQT
20.    Washington          Union                   EQT
21.    Washington          Union                   EQT
22.    Washington          Union                   EQT

OH Permits – week ending April 25, 2015

      County               Township              E&P Companies

1.    Belmont             Richland                Amer. Ener. Utica
2.    Belmont             Richland                Amer. Ener. Utica
3.    Carroll                Perry                    Chesapeake
4.    Carroll                Perry                    Chesapeake
5.    Carroll                Perry                    Chesapeake
6.    Carroll                Perry                    Chesapeake


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Joe Barone jbarone@shaledirectories.com 610.764.1232
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