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Permit Activity last week.  

  • PA – 18; PennEnergy in Beaver County; Seneca in Cameron County
  • OH –3; Eclipse Resources in Monroe County

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 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.

Visit us at booth #837

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:  www.safetyseminar.net

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

  • American Energy Utica getting active.  After a few months of silence, AEU is starting to call companies about projects.  (RUMOR)
     
  • Are We Near the Tipping Point for Drilling to Increase?  EIA announced on Wednesday that oil production in the Bakken and Eagle Ford will be down 31,000 and 47,000 respectively.  This information coupled with the fact that inventories in Cushing are decreasing.  Not too long ago, everyone was wondering where we would store all this oil.  No one is wondering any more.

    Last week at OTC, everyone was talking like $65 would be the price that drilling would pick up.  With today’s price of crude surpassing $61, we may not be too far off.

    If we are near the tipping point, when is the tipping point?  From my perspective, when the Baker Hughes U.S. rig count is over 1000 rigs, the recovery in drilling will be taking place.  Last week, the rig count was 884.  Not that I have drawn a line in the sand on the rig count, the question remains when.  Since we are looking for 13% increase in the U.S. rig count, my forecast is that by September 1st the U.S. rig count will be in excess of 1000.

    I encourage all readers to give me your thoughts on the turnaround of the U.S. rig count and the date it happens.  Give it your best shot.
     
  • EIA June forecast.  The US EIA has published its forecast for oil and gas production in the seven major plays that account for 95% of US production and predicts that oil production will slide to a five month low in June.

    The EIA has estimated that oil production in the Bakken and Eagle Ford will decline by 31,000 and 47,000 barrels per day respectively by June.

    Oil production in the Haynesville and Marcellus will remain constant, whilst the Permian and Utica will add 7,000 and 1,000 barrels per day respectively.

    The Niobrara play production will decline by 16,000 barrels per day as the largest plays cut a total of approximately 86,000 barrels per day as total production is set to fall to a five month low of 5.57 barrels of oil per day.

    Prior to the announcement, chief oil analyst at consultant Energy Aspects stated, “even if 10 rigs come back today, we’re still going to see production decline; we’ve reached this inflection point where there aren’t enough rigs drilling to offset legacy declines.”
     
  • Drilling could pick up in the 3rd & 4th Qtr. in PA.  Conversations with an oil and gas guy indicate that permitting could pick up and drilling could be more active in the second half of 2015.  (RUMOR)
     
  • EQT drilling first well in the Utica in WV.  EQT Corporation still plans to drill at least one gas well in the Utica Shale in Wetzel County, and it may drill four more in its territory before the end of the year despite problems with the first well it is drilling in Pennsylvania.

    Steven Schlotterbeck, EQT executive vice president and president of exploration and production, said drillers completed drilling the well with a final lateral length of 3,300 feet. They are currently running reservoir tests and plan to begin fracking in early June, he said. The well had a setback when drillers encountered pressures that were higher than expected and had to bring in a larger rig, he said.

    “Despite this timing setback, we continue to be excited and optimistic about the dry gas Utica potential beneath our acreage,” Schlotterbeck said.

    This year will be one of testing the Utica wells, and EQT will likely spend next year gathering and evaluating data before deciding whether to shift part of its capital expenditures from Marcellus Shale wells in West Virginia and Pennsylvania to the Utica, he said.

    EQT’s first Utica well is using ceramics instead of sand underground, and that has added to the test well’s cost, Schlotterbeck said. “Our reservoir engineering at this point is suggesting that it might be possible to use sand in these wells, so that’ll be something we’re testing, probably not in these first two wells, but in subsequent wells,” he said.
     
  • William Cos. back together.  Williams Cos. agreed to buy the 40 percent of Williams Partners LP it doesn’t already own Wednesday for $13.8 billion.

    Williams officials said the deal simplifies its corporate structure and should help the parent reduce taxes, increase payouts and accumulate cash for expansion.
     
  • XTO expanding in Butler County, PA.  XTO Energy Inc., a subsidiary of oil giant Exxon Mobil Corp., wants to expand its natural gas processing operation in Butler County, Pa., according to a recent filing with the Pennsylvania Department of Environmental Protection.

    A notice published in the latest edition of The Pennsylvania Bulletin shows that XTO plans to construct and install a new natural gas plant capable of processing 125 million cubic feet of gas a day at its Penn Cryo facility.

    The expansion would double the size of the existing operation in Penn Township, which processes gas from the Marcellus shale play. XTO has a long-term agreement with midstream provider MarkWest for that company to transport natural gas liquids through a pipeline connecting the Penn Cryo plant to MarkWest’s fractionation plant in Houston, Pa.
     
  • First big deal since price plunge, Noble buys Rosetta.  Noble Energy has agreed to acquire Rosetta Resources in a $3.9bn deal including debt which will allow it to enter into the Eagle Ford and Permian resources.

    Under the deal Noble Energy pay Rosetta $2.1bn and assume its net debt of $1.8bn.

    Rosetta acquires and develops onshore unconventional resource plays in the US. The company's asset base includes about 50,000 acres in the Eagle Ford Shale and 56,000 acres in the Permian basin.

    Noble Energy has found more than 1,800 horizontal drilling locations for development, providing net unrisked resource potential of around one billion barrels of oil equivalent.

    The assets owned by Rosetta produced 66,000 barrels of oil equivalent per day in the first quarter of 2015, and proved reserves were 282 million barrels of oil equivalent by the end of 2014.

    Noble Energy expects a compounded annual production growth rate of about 15% from Rosetta's assets in the next several years.
     
  • Aubrey’s looking at Australia.  Aubrey McClendon has never owned a drilling field outside of the U.S. The Chesapeake Energy Corp. co-founder and former chief executive has remained staunchly focused on acquiring domestic oil and gas lands, even as his rivals have searched further afield for opportunities.

    That could be about to change. Mr. McClendon’s American Energy Partners LP, which has been on a buying spree across major U.S. energy basins, is seeking capital for a new entity that would purchase about 16 million acres of shale in the McArthur Basin in northern Australia, said people with knowledge of the matter.

    The move would mark a big departure for Mr. McClendon. While at Chesapeake, he regularly dismissed questions about pursuing oil and gas plays in Canada and elsewhere abroad by saying the company’s strategy of identifying new exploration opportunities and stealthily leasing drilling rights with private landowners wouldn’t work outside the U.S. In Canada and most other countries, mineral rights are owned by governments and drilling licenses are awarded in public auctions.

    The McArthur Basin, which contains a vast swath of undeveloped acreage, has proved attractive to Mr. McClendon, a wildcatter known for his free-spending ways and high-stakes bets. The basin is rich in lead, zinc, silver, diamonds and iron ore, while large parts of the northern area of the basin are “effectively unexplored,” according to the website for Australia’s Northern Territory government.
     
  • MarkWest is talking expansion.  MarkWest Energy Partners, the region’s predominant natural gas processor, already has 19 capital projects on the books, but it might need more to serve producers in the Marcellus and Utica shales.

    Chairman and CEO Frank Semple told analysts during the company’s quarterly earnings call that it is evaluating the need for additional fractionation capacity to keep up with development of the area’s rich gas reserves. Fractionation involves separating gas liquids into individual compounds: ethane, butane and propane.

    Semple said MarkWest (NYSE:MWE) intends to provide quarterly updates on the capacity needed to support development.

    “We will announce it as it’s required,” he said, adding that takes 12 to 18 months to complete a project. “So, as we speak, we are evaluating the next phase of fractionation expansion to support the continued development in the Marcellus and the Utica.”
     
  • $10 billion in midstream over the next 5 years.  Columbia Pipeline Group plans to spend $10 billion in the next five years on projects centered around Ohio and its neighboring states.

    The company, which will separate from Columbia Gas of Ohio parent NiSource Inc.  July 1, outlined its post-separation efforts Thursday. It says it has "significant scale, unparalleled strategic footprint," anchored over the Utica and Marcellus shale plays.

    Houston-based CPG, whose Ohio HQ will be in New Albany, has 15 natural gas-fueled projects planned for operation by 2020, many of which crisscross Ohio. That, plus modernization efforts, adds up to about $10 billion in investment.

    Projects snaking through Ohio include the $1.4 billion Leach Xpress pipeline, which will start on the West Virginia side of the Ohio River and go through southeastern Ohio and southwestern Pennsylvania. The pipeline, set for service at the end of 2017, will consist of 160 miles of new pipeline and three new compressor stations.
     
  • Magnum selling leases in the Utica.  Magnum Hunter Resources Corp. says it’s in negotiations with “certain parties” to establish a joint venture that would entail selling $450 million of the oil and gas producer’s leasehold positions in Ohio’s Utica shale.

    In a statement released Monday, the company said the proposed sale is one of several initiatives underway in order to improve Magnum Hunter’s liquidity.

    The company is negotiating an asset management agreement that would increase its borrowing capacity under Magnum’s senior revolving credit facility of $40 million. It is also negotiating an agreement to sell 5,000 acres of undeveloped leasehold acreage in Appalachia that could generate between $45 million and $60 million.

    Magnum Hunter currently has four producing wells in the Utica, but has no rigs or crews working in the shale play. Two other Utica wells have been drilled but have yet to be fractured, while three other wells are in various stages of the drilling phase, the company said.

    All drilling and completion operations with respect to these wells have been suspended, Magnum Hunter said.

    Magnum Hunter reported a loss of $114.8 million for the three-month period ended March 31, 2015 compared to a net loss of $76.5 million a year earlier.

    Oil and gas production increased 66% during the first quarter of 2105, the company reported. The increase in production was attributable to the company’s expanded drilling programs in the Marcellus and Utica shales.

    But falling oil prices have clobbered oil and gas producers across the country, forcing many of them to scale back spending and drilling operations.

    “We continue to be in our ‘hunker down’ mode as we work on closing our various liquidity events previously outlined,” said Gary C. Evans, CEO. “Currently, we are not drilling or completing any new wells in anticipation of further reduction in service costs and improvements in our working capital position.”
     
  • Waterless fracking does not work.  Results from one of the first waterless fracking wells in Ohio have proved disappointing, in a setback to the potential technology which could mitigate water consumption and sourcing issues in the shale industry.

    EV Energy Partners has drilled a test well to pioneer waterless fracking, at a cost of $22 million in collaboration with eight other drilling companies.

    The well in Tuscarawas County, eastern Ohio, was online for 90 days, but produced around half the amount of oil compared to neighboring wells that use water based fracking.
     
  • Thai – Japanese cracker plant in Belmont County, OH moving forward. Thailand's PTT Global Chemical PCL said it aims to sign in the second half of 2015 a deal with Japan's Marubeni Corp and a new partner to jointly invest in a $5.7 billion petrochemical complex in the United States.

    Thailand's largest petrochemical maker will hold a more than 51 percent stake in the project, Patiparn Sukorndhaman, executive vice president for finance told reporters. PTT is seeking a third partner to jointly invest in the project in addition to Marubeni, Sukorndhaman added.
     
  • UGI to build LNG center in PA.  Natural gas supplier UGI Energy Services has unveiled a plan to construct a liquefied natural gas (LNG) production centre in northern Pennsylvania which will use Marcellus Shale gas in the eastern parts of the US.

    UGI Energy Services is a wholly owned subsidiary of US based LPG distribution company UGI Corporation (UGI)

    The firm will invest around $60m on the facility, which will be located beside its Manning natural gas compression station in Wyoming County.

    The LNG facility will facilitate natural gas supply via its Auburn gathering system and enable transportation of Marcellus Shale gas from the local wells to interstate pipelines which connect with markets in the Mid-Atlantic region.
     
  • EV Partners still active in OH

Rig Count

Baker Hughes Rigs count for the week May 15, 2015

  • PA
    • Marcellus 45 down 1
    • Utica 1 unchanged
  • Ohio
    • Utica 24 unchanged
  • WV
    • Marcellus 21  up 1
  • TX
    • Eagle Ford – 108 up 3
    • Permian Basin  191 down 5
  • NM
    • Permian Basin – 42 up 1
  • ND
    • Williston – 79 down 1
  • MT
    • Williston – 0 unchanged
  • CO
    • Niobrara –28 unchanged
       
  • TOTAL U.S. Rig Count 894 down 11

PA Permits for May 7, to May 14 2015

      County                  Township                   E&P Companies

1.    Allegheny               Findlay                        Consol
2.    Allegheny               Findlay                        Consol
3.    Beaver                    New Sewickley            PennEnergy
4.    Beaver                    New Sewickley            PennEnergy
5.    Beaver                    New Sewickley            PennEnergy
6.    Beaver                    New Sewickley            PennEnergy
7.    Bradford                  Burlington                   Chief
8.    Bradford                  Burlington                   Chesapeake
9.    Cameron                 Shippen                      Seneca
10.    Cameron                Shippen                      Seneca
11.    Cameron                Shippen                      Seneca
12.    Cameron                Shippen                      Seneca
13.    Cameron                Shippen                      Seneca
14.    Cameron                Shippen                      Seneca
15.    Cameron                Shippen                      Seneca
16.    Washington            Somerset                    Range
17.    Washington            Somerset                    Range
18.    Washington            Somerset                    Range

OH Permits – week ending May 9, 2015

       County              Township                E&P Companies

1.    Monroe                Salem                    Eclipse Resources
2.    Monroe                Salem                    Eclipse Resources
3.    Monroe                Salem                    Eclipse Resources


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