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Expo/Industry events for the next few months

Utica Upstream
April 6, 2016
Pro Football Hall of Fame
Canton, OH

Upstream PA 2016
April 19, 2016
Penn Stater Inn
State College, PA

Ohio Valley Regional Oil & Gas Expo
April 26-27, 2016
Belmont County Carnes Center
St. Clairsville, OH

Latest facts and a rumor from the Marcellus and Utica Shale

  • Well Pads, But Not Necessary Drilling. In the last couple of weeks, I’ve spoken to individuals who are receiving RFP’s for well pads, but there will not be any drilling.  In our rumors last week, we spoke about Chesapeake thinking about 14 well pads in Jefferson County, OH.  This week there is a rumor about Rex requesting bids for 6 well pads.

    The general consensus is that the drillers are drilling to hold leases.  If you look at this week’s permits in OH, Ascent Resources received 8 permits.  I doubt that Ascent will be drilling 8 wells.  In OH, drillers have to receive an additional permit to drill.  I’ll be monitoring the weekly permit reports to see if Ascent receives drilling permits.
  • Re-bidding Jobs.  At MUM last week, I spoke with a few companies that had submitted bids and thought they had won the bid only to learn that bid was rescheduled.   They were told that the job will be rebid in March or April when the costs may be lower.  It certainly looks like everyone is getting squeezed with the low prices
  • What Does “Overpiped” Mean?  It’s a concept rarely, if ever discussed in the Marcellus and Utica Shales region, but was heard uttered by no fewer than two speakers at last week’s Seventh Annual Marcellus-Utica Midstream Conference & Exhibition (MUM).

    The Pittsburgh program is presented by Hart Energy; Kallanish Energy was in attendance.

    “What if the Marcellus/Utica region is overpiped?” asked Mark Eisenhower, vice president of Strategic Planning and Development for midstreamer Aspire Energy of Ohio. “I’m not saying it is, but it’s something that must be considered.”

    Eisenhower said one has to consider the pullback in production in the Marcellus/Utica due to the price plummet in oil and gas.

    “Producers scaling back will mean excess pipeline capacity, and excess pipeline capacity will reduce the basis differential and thus reduce/eliminate the value of new pipeline projects,” according to Eisenhower

    (Basis is the difference between the benchmark Henry Hub spot price and the corresponding cash spot price for natural gas in a specified location.)

    Earlier in the conference day, Dominion Transmission Senior Vice President Don Raikes told his MUM audience that between the years of 2015 and 2018, 21 billion cubic feet per day of new takeaway capacity from the Marcellus/Utica was planned.

    “We believe the Appalachian Basin’s takeaway capacity will be largely overbuilt by the 2016-2017 timeframe,” said Elie G. Atme, vice president, Marketing and Midstream Operations for independent producer Range Resources.

    Atme said growth in Northeast Pennsylvania’s Marcellus dry gas play had stopped, and growth in Southwest Pennsylvania, where both Marcellus and Utica drilling is underway, “is slowing.”

    Aspire’s Eisenhower also played the “what-if” game concerning liquefied natural gas (LNG) exports. Estimates of 9 Bcf/d of LNG exports are seen by many in the industry as a partial fix for the huge natural gas oversupply the U.S. currently suffers from.

    “What if LNG exports don’t happen?” Eisenhower asked. “If that occurs, expect lower gas prices beyond 2018.”
  • Could Petrochemical Plants Be Coming to Marcellus and Utica?  Natural gas liquids (NGLs) production in the Marcellus-Utica Shale region of Southwest Pennsylvania/eastern Ohio/northern West Virginia should be sufficient by 2020 to support cluster development of petrochemical plants, a Cleveland State University professor said last week.

    Andrew Thomas, former Shell Oil geophysicist, oil and gas attorney and now executive-in-residence at Cleveland (Ohio) State University’s Levin College of Urban Affairs, said the Tri-State region has all the ingredients to entice petchem development, beginning with surplus ethane.

    “The region has local natural gas liquids product, the NGL processing and fractionating capacity, and the takeaway [via pipeline] capacity,” said Walker.

    He spoke last week at Hart Energy’s Seventh Annual Marcellus-Utica Midstream (MUM) Conference & Exhibition in Pittsburgh, where Kallanish Energy was in attendance.

    Thomas was part of a study team which last fall published a series of studies examining the economic impact of Utica Shale development on Ohio.

    According to Walker, by 2020, the Southwest Pennsylvania/northern West Virginia/eastern Ohio region will be producing 638,000 barrels per day (BPD) of ethane, will house 371,000 BPD of liquids processing capacity, and feature 460,000 BPD of takeaway pipeline capacity.

    Takeaway capacity subtracted from ethane production leaves roughly 178,000 BPD of excess ethane, which could be utilized locally, more than likely in one of more ethane crackers.

    Such plants break-down ethane into ethylene, one of the primary building blocks for plastics. Crackers generally attract polyethylene plants nearby, which use the ethylene to make polyethylene.

    Currently, the U.S. cracker industry is concentrated along the Gulf Coast, with more capacity under construction.

    The Pennsylvania/West Virginia/Ohio region would save a cracker roughly $150 million by not having to ship the ethane thousands of miles to the Gulf.

    One cost advantage the Gulf Coast has over Appalachia relates to storage capacity. Ethane is volatile at atmospheric temperatures and pressures, and can’t be easily stored. Storage is principally located underground in salt caverns or in sandstone reservoirs. All such storage in the Appalachian region is already being used by natural gas.

    But Walker and a previous conference speaker, Jim Cutler, CEO of Appalachian Resins, said the regional midstream industry already has solved the ethane storage dilemma.

    “Midstreamers have the ability to lay-off ethane,” Cutler told Kallanish Energy following his presentation on ethane markets.

    “The midstream companies can move the ethane into other pipelines until needed by a cracker,” in effect, using the lines to store the product.

    “There is no technical reason why there is no cracker in the Northeast,” Cutler said. “It’s economics.”
  • FREE Fracking from Schlumberger.  Schlumberger has developed new technology for fracking and is offering FREE fracking as means of demonstrating the new fracking technology to E&P Companies. (RUMOR)
  • EQT 2015 Income.  EQT Corporation today 2015 net income attributable to EQT of $85.2 million, or $0.56 per diluted share (EPS), compared to earnings of $387.0 million, or $2.54 per diluted share in the previous year. Adjusted net income during 2015 was $114.7 million, compared to $523.9 million in 2014, after considering several items that affect direct year-over-year comparability. Adjusted EPS for the year was $0.75, compared to $3.43 in 2014; and adjusted operating cash flow attributable to EQT was $964.3 million, compared to $1,424.0 million in 2014. The non-GAAP financial measures and the items affecting comparability of results are detailed and reconciled in the Non-GAAP Disclosures section of this news release.

    Fourth quarter 2015 net loss attributable to EQT was $134.6 million, compared to a net loss of $14.7 million in 2014. Fourth quarter adjusted net loss was $8.8 million, compared to adjusted net income of $148.8 million in the fourth quarter of 2014; and adjusted EPS was negative $0.06, down from $0.97. Adjusted operating cash flow attributable to EQT was $233.9 million, versus $390.0 million in 2014.

    Highlights for 2015:

        Production sales volume was 27% higher
        Midstream gathered volume was 28% higher
        Transmission throughput was 18% higher
        Cash balance at year-end was $1.25 billion (excluding EQM)
        Access to an undrawn $1.5 billion unsecured revolver
  • EQT Bullish on Utica Dry Gas; Could Surpass the Marcellus.  EQT Corp. on Thursday continued to tout its deep, dry Utica Shale prospects in Southwest Pennsylvania and Northern West Virginia, and said for the first time some of the formation could meet or exceed the performance of its core Marcellus Shale.

    EQT Corp. continued to tout its deep, dry Utica Shale prospects in Southwest Pennsylvania and Northern West Virginia, and said for the first time some of the formation could meet or exceed the performance of its core Marcellus Shale assets.
  • Range Cuts People.  Range Resources Corp. is laying off 55 employees, including 31 in Washington County, as the shale gas producer deals with low prices that are battering many of Pennsylvania's top drillers.

    The cuts announced Tuesday at Pennsylvania's fourth-biggest shale gas producer, affecting 7 percent of its workforce, came the same day that No. 2 producer Cabot Oil & Gas said it would reduce its capital spending this year by 47 percent from the $615 million it planned. No. 3 producer Southwestern Energy last month cut 40 percent of its employees, including 200 in Appalachia.

    “Low commodity prices have created a harsh reality that everyone in our industry is facing,” said Ray Walker, chief operating officer at Fort Worth-based Range. “For Range, that has included difficult decisions, reflected by adjustments in our operations, reductions in capital spending, office closures, asset sales and staff reductions, including those announced this morning.

    The layoffs, which hit positions across the board in several offices, center on Range's regional headquarters in Cecil and a field office in Chartiers. Twenty jobs were cut in Fort Worth, leaving the company with about 700 employees, mostly in Pennsylvania. The company said it was offering severance packages to the laid-off workers.

    The benchmark price of natural gas fell more than 5 percent to $2.04 per million British thermal units, its lowest point since hitting 16-year lows in December. A warm winter has muted demand as record levels of storage fueled by increased production over the past few years have deepened a supply glut.

    Prices in Appalachia have trailed the national benchmark by $1 or more as companies struggle to build pipelines that can carry the oversupply to more lucrative markets. In response, producers last year drilled 40 percent fewer shale wells in Pennsylvania than in 2014.
  • Rex Planning 6 well pads.  Rex is sending out RFP’s for six well pads.  It appears that the E&P Companies are sending our RFP’s for well pads.   Last week, we had a rumor that Chesapeake was planning on 14 well pads.  It appears that drillers are building the well pads to hold its leases.  (RUMOR)
  • Drillers in the Permian Raise $2 Billion.  Oil producers in West Texas, defying expectations they would fall victim to OPEC’s price war, are instead selling investors on the idea that they can still profit with prices below $35 a barrel.

    Drillers in the Permian Basin, the biggest US shale field, have raised at least $2 billion from share sales over the past eight weeks. And more issuances are on the way as producers try to avoid piling on additional debt.

    Pioneer Natural Resources Co.’s 12 million-share issuance on Jan. 5 was followed a week later by Diamondback Energy Inc.’s announcement of a 4 million-share sale. (We reported on this three weeks ago.)

    Private equity is getting in on the act, too — Kayne Anderson Capital Advisors LP is bankrolling a startup called Invictus Energy LLC with $150 million to drill the Permian and another Texas field known as the Eagle Ford Shale.

    Crude’s crash below $30 a barrel for the first time in 12 years means explorers are facing cash shortfalls, and selling shares is less painful than adding debt or auctioning off assets that would attract weak prices in the current environment, said David Deckelbaum, an analyst at Keybanc Capital Markets Inc.

    “In a world where the oil price can break you, taking on debt is an absolute no-no,” said Deckelbaum, who pegged Diamondback as a likely stock seller six days before the company’s announcement. He foresees a “heavy wave” of new share sales.

    Since its Jan. 5 sale, Pioneer has outperformed the crude market, falling 2.3 percent as oil dropped 13 percent. Diamondback has surged 22 percent since its Jan. 13 issuance.

    Oil prices have tumbled by about 60 percent since the Organization of Petroleum Exporting Countries nixed any production cuts in November 2014 to shore up crude markets that at that point had been falling for five months.

    Saudi Arabia, the group’s leader and the world’s largest single source of oil, has sought to defend its market share by letting prices slide to the detriment of the U.S. shale industry.

    The Permian Basin, an ancient seabed that sprawls across an area seven times the size of Massachusetts, has bucked the trend of shrinking production. Drillers were getting 30 percent to 40 percent returns in the Permian’s richest zones when crude was $40 a barrel, according to Laird Dyer, a Royal Dutch Shell Plc energy analyst.

    U.S. benchmark West Texas Intermediate fell 71 cents, or 2.3 percent, to $30.91 a barrel on the New York Mercantile Exchange at 12:04 p.m. Hong Kong time.

    Crude output from the Permian is expected to continue rising through at least next month after more than doubling in the past half-decade, the U.S. Energy Information Administration said on Jan. 11. The region accounts for about one in every four barrels of domestically produced oil.

    “The Permian really is a diamond in the rough,” said Gianna Bern, founder of Brookshire Advisory and Research Inc. in Chicago and a former BP Plc crude trader. “With the supply glut in the global market, these are challenging times for the entire industry, but the Permian is one place with the resources, ingenuity and engineering expertise to continue improving the cost structures.”

    The Permian is unique in that geologists and engineers have been probing and mapping its layers of oil-rich stone for most of the past century, compiling a treasure-trove of core samples, pressure data and porosity profiles that prove useful as drilling innovations develop.

    Other Permian explorers who may be tempted to sell new shares to help fund their 2016 drilling budgets include Callon Petroleum Co., Cimarex Energy Co., Energen Corp., Laredo Petroleum Inc., Parsley Energy Inc. and RSP Permian Inc., Deckelbaum said.

    Julie Ryland, a spokeswoman for Birmingham, Alabama-based Energen, declined to comment. Spokespeople for the other five companies didn’t immediately respond to voicemail messages.

    The “equity window appears to be open,” following the Pioneer and Diamondback sales, Gordon Douthat, an analyst at Wells Fargo Securities LLC, said in a Jan. 13 note to clients. More companies with oil fields and balance sheets similar to Diamondback’s profile probably will follow with their own stock sales, he said.

    Selling assets is a bad way to raise cash right now because of an oversupply of property on the auction block and pessimism about the future direction of crude prices, Deckelbaum said.

    While the oil producers he follows for Keybanc are trading at an average of about $62,000 per barrel of output, recent asset sales in the sector have only fetched about $44,000, a 29 percent discount, Deckelbaum said.

    “The best play book for many names is simply to issue equity,” he said.
  • Cabot Cuts CAPEX.  Cabot Oil & Gas said that it expects fourth-quarter production to reach roughly 1.64 billion cubic feet-equivalent (Bcfe) per day, exceeding the midpoint of the independent’s guidance range of 1.63 Bcfe/d.

    The projected quarterly projection includes roughly 1.55 Bcf/d of natural gas and approximately 14,977 barrels per day (BPD) of liquids (crude oil/condensate/natural gas liquids).

    Based on the expected fourth-quarter production volume, the Houston, Texas-based company expects its total production growth for 2015 to be roughly 13%, Kallanish Energy learns.

    Cabot expects to spend roughly $97 million in capital expenditures (CAPEX) during the fourth quarter. Based on this anticipated level of spending during the quarter, the company expects to incur approximately $774 million in CAPEX for all of 2015, compared to Cabot’s 2015 capital program guidance of $850 million.

    “The lower capital spending was a result of reduced activity levels in the fourth quarter, along with continued improvements in operating efficiencies and further reductions in service costs,” according to Cabot.

    Due to the decline and ongoing bottom-of-the-barrel pricing for oil and gas, Cabot chopped its 2016 CAPEX by 58%, to $325 million, the majority to be spent in the Marcellus Shale play.

    Cabot plans to reduce its rig count to one by mid-February. As a result, the company’s 2016 production growth guidance range is being reduced at the top-end from 2%-10%, to 2%-7%.

    “Consistent with our philosophy of disciplined capital investment through all commodity cycles, we have reduced our 2016 capital program in response to the lower commodity price environment and its anticipated impact on our operating cash flow for the year,” said Dan O. Dinges, Cabot’s CEO.

    At least one analyst liked Cabot’s commentaries. “We believe the lower 4Q15 spending and revised 2016 spending outlook underscore COG’s capital efficiencies,” Topeka Capital Markets energy analyst Gabriele Sorbara wrote in a Tuesday research note.
  • Marcellus Shale Ethane to India.  New Delhi: State-owned gas utility GAIL (India) Ltd plans to import ethane from countries such the US for a $5 billion petrochemical plant it is setting up in Andhra Pradesh jointly with Hindustan Petroleum Corp. Ltd (HPCL).

    GAIL will be the second company after Reliance Industries Ltd (RIL) to plan import of ethane—a component of natural gas found in abundance in the Marcellus shale and used for making root chemical for plastics, resins, adhesives and synthetic products.

    People familiar with the matter said GAIL is seeking supplies of up to 1.3 million tonnes per annum of ethane for 15 years on the east coast of India beginning 2022. GAIL-HPCL are planning the petrochem project after their plans to team up with France’s Total, Lakshmi N. Mittal Group and Oil India Ltd (OIL) for a 15 million tonnes a year refinery-cum-petrochemical plant at Visakhapatnam in Andhra Pradesh, fell through.

    That project fell as partners pulled out one after the other due to weak global demand.

    RIL plans to import 1.5 million tonnes of ethane annually from the US to substitute its current propane imports and a portion of naphtha used for ethylene production. Imports could start as early as 2016-end.
  • Marcellus Shale Gas Seriously Jeopardizes Canadian NatGas.  With so much pipe going into the Pennsylvania ground, it’s a wonder there could be any undeveloped corridors left for Marcellus gas to travel. And yet, new long-haul pipelines carrying 24 bcf per day in all directions from Pennsylvania and parts of Ohio are already planned through to 2018, according to ITG Investment Research. Compare that to the Western Canadian basin’s total output last year of about 14 bcf per day, and then consider that almost all of that Canadian gas was bound for regions now within reach of the Marcellus. Most menacing of all from the Western Canadian gas producer’s point of view, are the pipeline expansion plans of companies like Enbridge, Nexus and Spectra Energy, which, when completed, will together pipe as much as 5 bcf per day of new Marcellus gas into Ontario by 2018.

    But the east isn’t the only market that Canadian gas producers are in jeopardy of losing to the Marcellus. The American Midwest is up for grabs too. When the 2,700-kilometer Rockies Express Pipeline came into service at the end of 2009, its Colorado-to-Ohio span was – and is – one of the largest pipelines ever built in the U.S. It was, at the time, intended to deliver a much-needed boost for gas producers in Colorado and Wyoming, connecting them to the fuel-hungry U.S. northeast market where they could escape the Midwestern oversupply and fetch a far better price. But less than six years after the ribbon was cut on the multibillion-dollar pipeline, the one-time lifeline for Rocky Mountain producers was spun into a noose from its eastern end. On Aug. 1, 2015, the Rockies Express Pipeline was partially reversed, sending low-cost Marcellus shale gas into Chicago and the American Midwest, hammering local drillers. A July 2015 report in the Casper Star-Tribune, Wyoming’s largest newspaper, cites a Platts study projecting that sales of gas from the Rocky Mountain region into the Midwest would drop by 1.3 bcf per day between 2014 and 2020 as a result of the reversal, while sales into the area from the Marcellus would rise by 6 bcf per day over the same time.

    Pipelines and drilling rigs aren’t the only energy infrastructure under construction in the Marcellus. Once completed, the natural gas-fired panda patriot power plant will be near in size and in proximity to one that Transcanada is expected to close an acquisition on early this year.

    But the Marcellus’s market impact could yet be broader still. With the global race to get liquefied natural gas (LNG) to markets in Asia and Europe now underway, Canada has yet to leave the starting line, although it plans to do so towards end of the decade. The U.S., on the other hand, is up and running with five terminals sending an average of 2.75 bcf of LNG overseas per month between May and October 2015. In addition, the U.S. has as many as two-dozen projects in the federal review phase, according to the latest data from the U.S. Energy Information Administration. In 2017, the Dominion Cove Point LNG terminal on the Maryland coast of Chesapeake Bay will begin exporting the liquid equivalent of up to 770 million cubic feet of Marcellus gas per day to India and Japan.

    “Surprisingly enough, there have been no projects proposed down around the southwestern Pennsylvania area on the Delaware Bay, which would really be the logical place for a project for [exports to] Europe,” says Fred Hutchison, executive director of LNG Allies, a Washington, D.C.-based nonprofit dedicated to diversifying U.S. energy markets. “That hasn’t yet materialized, but my own prediction is that somebody’s going to come up with an idea pretty quick.” To heighten foreign interest, Hutchison’s organization has been courting foreign ambassadors touring the Marcellus region, including those from Belgium, Estonia, Latvia and the Netherlands, while also reaching out to nations in Asia and South America. “There are a few things we’re trying to impress upon them and one is the scale of the development,” Hutchison says. “They would love to replicate in their countries what we have here with shale but it’s not going to happen. The glory days for U.S. gas are by no means over. This is just the beginning.”
  • Gulfport Sees Big Jump in Reserves.  Gulfport Energy Corp reported a major boost in year-end 2015 proved reserves, mostly in the Utica Shale in eastern Ohio.

    The Oklahoma-based company reported that year-end reserves grew from 933.6 billion cubic feet of natural gas equivalents to 1.7 trillion cubic feet of natural gas equivalents. That is an increase of 83 percent from 2014 to 2015, the company said.

    Net production in 2015 averaged 548.2 billion cubic feet of equivalents per day, exceeding the high end of the company’s 2015 guidance, the company said.

    The daily production in 2015 averaged 78 percent natural gas; 13 percent natural gas liquids including ethane, butane and propane; and 9 percent oil, said Gulfport, one of the biggest players in the Utica Shale.

    For 2015, the company got an average of $2.08 per thousand cubic feet of natural gas, $42 per barrel of oil and $13 per barrel on natural gas liquids, the firm said.

    The company is operating four rigs and had, through September, drilled 153 wells in Ohio where it has leased 247,000 acres.

    Gulfport also announced completion of joint venture with Rice Midstream Holdings LLC, a subsidiary of Pennsylvania-based Rice Energy LLC.

    Gulfport will own 25 percent of the joint venture and Rice will act as operator and own the remaining 75 percent. Rice will develop gas-gathering assets in eastern Belmont and Monroe counties to support Gulfport’s dry Utica gas drilling.

    Construction of those lines is underway. A new lateral connecting two existing gas-gathering systems went into service on Monday for Gulfport’s use.

    The two companies are also discussing joint water services for hydraulic fracturing or fracking of wells in Belmont and Monroe counties.

    Gulfport also reported that it has arranged transport of additional natural gas from November 2016 through March 2017 because of delays in the ET Rover Pipeline across northern Ohio.

    That $4.4 billion pipeline will be delayed by the Federal Energy Regulatory Commission’s review of the pipeline that would run 800 miles with various extensions into Pennsylvania and West Virginia.

    It would run from Carroll County to Defiance in northwest Ohio. It would pass through parts of Wayne and Stark counties.

    Initial plans called for construction to begin in early 2016 but the federal agency has said its review will continue through July.

    The company will release its financial reports on Feb. 18.
  • Hess CAPEX 2016.  Hess announced its 2016 E&P (exploration and production) capex (capital expenditure) budget of $2.4 billion. It’s 40% lower than its 2015 capex of $4 billion.

    Of the $2.4 billion, $470 million will be allocated to unconventional shale resources, $610 million will be allocated for production, $820 million will be allocated for developments, and $500 million will be allocated for exploration and appraisal activities.

    Like Hess, many of its peers are also expected to slash their 2016 capex as a result of weak energy prices. Apache and Anadarko Petroleum slashed their 2015 capital expenditures by ~65% and ~33%, respectively, compared to 2014. Marathon Oil also announced a capex reduction of ~40% compared to 2014. These companies combined make up ~6.7% of the Energy Select Sector SPDR ETF.

    Further breakdown of capex

    Of the $470 million allocated to unconventionals, $425 million will be used to operate two rigs and bring online ~80 new wells in the Bakken shale. The remaining $45 million will be used in the Utica shale.

    The majority of the production budget of $610 million will be allocated for production activities in the deepwater Gulf of Mexico. That will require $375 million. The remaining will be used for completion of projects in Denmark, Norway, and the Gulf of Thailand.

    The development budget of $820 million will include spending of $375 million to further the full field development of the North Malay Basin project in Malaysia. About $325 million will be used to commence drilling at the Stampede Field in the deepwater Gulf of Mexico.

    The exploration and appraisal budget of $500 million will include $250 million to drill four wells offshore in Guyana and $175 million for drilling in the deepwater Gulf of Mexico.
  • Anadarko Cuts CAPEX for 2016.  Independent producer Anadarko Petroleum on Monday said it slashed its capital budget as it attempts to rebound from its worst year financially since spinning off from Panhandle Eastern Pipe Line 30 years ago.

    The Woodlands, Texas-based Company reduced its 2016 capital budget (CAPEX) by almost half, to roughly $2.8 billion, according to its fourth-quarter earnings report, Kallanish Energy reports.

    In sharply cutting CAPEX, Anadarko becomes the latest producer to take drastic steps to cope with crude oil’s 70% price swoon since June 2014.

    “These actions should enable us to successfully manage through the current market volatility and position Anadarko for future success,” CEO Al Walker said.

    The company reported a net loss of $1.25 billion for the fourth-quarter; triple the $395 million loss a year earlier.

    For all of 2015, its $6.69 billion loss was the largest in company history. It plans to disclose more information about the 2016 capital plan on a March 1 call with investors.

    Last year, Anadarko withdrew an offer to buy fellow shale producer Apache, after the target refused to discuss merger.

    Some investors believe Anadarko itself is a potential takeover opportunity for oil majors seeking to expand their exposure to shale.
  • Saudi’s Struggles Could Lead to Selling Islamic Bonds.  Saudi Arabia’s national oil and gas company, Saudi Aramco, is mulling issuing Islamic bonds, known as sukuk, for the first time in the company’s history, according to sources with knowledge of the situation.

    The Dhahran-based firm has reportedly held talks with banks about selling the bonds, setting up a program that could include several Shariah-compliant bond sales over the next few years, Bloomberg reported.

    Opposed to conventional bonds, which merely confer ownership of debt, the Islamic bonds grant the investor a share of an asset, along with the commensurate cash flows and risk. The sukuk certificates adhere to Islamic laws, which prohibit the charging or payment of interest.

    Last week, Aramco Chairman Khalid Al-Falih said the company was studying options, including an initial public offering (IPO) of shares in the parent company or its downstream operations. Despite crude prices, Al-Falih said the firm is maintaining investments in oil and gas projects, Kallanish Energy learns.

    According to Bloomberg, Aramco recently held negotiations with banks to raise $4.7 billion to refinance an oil refinery it developed with China Petroleum & Chemical.

Visit our Blog for daily updates on what’s happening in the oil & gas industry

Rig Count

  • Baker Hughes Rig Count the week of February 5, 2016
  • PA
    • Marcellus 19 down 3
    • Utica 0  
  • Ohio
    • Utica 13 down 1
  • WV
    • Marcellus 12 unchanged
  • TX
    • Eagle Ford – 60 down 4
    • Permian Basin  156 down 2
  • NM
    • Permian Basin – 24 unchanged
  • ND
    • Williston – 42 down 2
  • CO
    • Niobrara – 19 unchanged
  • TOTAL U.S. Land Rig Count 545 down 46

PA Permits for January 28, to February 4, 2016

       County       Township    E&P Companies

1.    Greene        Center        Vantage
2.    Greene        Center        Vantage
3.    Greene        Center        Vantage
4.    Greene        Center        Vantage
5.    Greene        Center        Vantage
6.    Greene        Franklin    Vantage
7.    Greene        Franklin    Vantage
8.    Greene        Franklin    Vantage
9.    Greene        Franklin    Vantage
10.    Greene        Jackson        Rice
11.    Greene        Jefferson    Vantage
12.    Greene        Perry        Vantage
13.    Greene        Perry        Vantage
14.    Greene        Perry        Vantage
15.    Greene        Springhill    Rice
16.    Greene        Springhill    Rice
17.    Indiana        North Mahoning    Consol
18.    Jefferson    McCalmont    XTO
19.    Potter        Ulysses        JKLM Energy
20.    Potter        Ulysses        JKLM Energy
21.    Potter        Ulysses        JKLM Energy
22.    Potter        Ulysses        JKLM Energy
23.    Potter        Ulysses        JKLM Energy
24.    Washington    Buffalo        Range
25.    Washington    Buffalo        Range
26.    Washington    Buffalo        Range
27.    Washington    Smith        Range
28.    Washington    Smith        Range
29.    Washington    Smith        Range
30.    Washington    Somerset    Rice
31.    Washington    Somerset    Rice
32.    Washington    Somerset    Rice
33.    Washington    Somerset    Rice
34.    Washington    Somerset    Rice
35.    Washington    Somerset    Rice
36.    Washington    Somerset    Rice
37.    Washington    Somerset    Rice
38.    Washington    Somerset    Rice
39.    Washington    Somerset    Rice
40.    Washington    Somerset    Rice
41.    Washington    West Finley    Range
42.    Westmoreland    Hempfield    Apex
43.    Westmoreland    Penn        Apex
44.    Westmoreland    Penn        Apex

OH Permits for week ending January 30, 2016

       County        Township    E&P Companies

1.    Belmont        Wheeling    Ascent
2.    Belmont        Wheeling    Ascent
3.    Belmont        Richland    Ascent
4.    Belmont        Richland    Ascent
5.    Harrison    Nottingham    Ascent
6.    Harrison    Nottingham    Ascent
7.    Harrison    Nottingham    Ascent
8.    Harrison    Nottingham    Ascent
9.    Monroe        Seneca        Antero
10.    Monroe        Seneca        Antero
11.    Monroe        Seneca        Antero
12.    Monroe        Seneca        Antero
13.    Monroe        Perry        EM Energy
14.    Monroe        Perry        EM Energy

Joe Barone 610.764.1232
Vera Anderson 570.337.7149


Utica Summit 2019