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NewsLetters

Expo/Industry events for the next few months

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

www.uticacapital.com

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

www.upstreampa.com

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

http://www.ohiovalleyoilgasexpo.com/

PIOGA’s 2016 Spring Meeting
April 7, 2016
Rivers Casino

www.pioga.org

OOGA Winter Meeting
March 16 – March 18
Hilton Columbus at Easton
Columbus, OH

http://oogawintermeeting.com/

Latest facts and a rumor from the Marcellus and Utica Shale

  • Aubrey McClendon.  May he rest in peace.

    When I heard Aubrey McClendon’s death I realized I probably would not be doing what I’m going had it not been for Aubrey.  He truly is one of the leaders of the shale revolution.  I grew up in Williamsport, Pennsylvania and it was Chesapeake’s drilling activity in Norther Pennsylvania that resulted in my jumping into the oil and gas industry.  

    We launched Shale Directories in November 2009 and newsletter Facts & Rumors in August 2012.  In many of the issues of Facts & Rumors, we covered all the news about Aubrey and the readers seemed to like following his latest moves.  

    As many of you know, I’m a CNBC junkie and have it on when I’m working in my office.  I found it very interesting yesterday that Stephen Weiss, a financial analyst on CNBC, compared Aubrey to Steve Jobs with the impact that Aubrey has had on the oil and gas industry in this country.  We now have all this recoverable oil and gas in America because of his efforts.  

    If you want to read a fascinating book about Aubrey, George Mitchell and the other pioneers of the shale and fracking, I recommend The Frackers by Gregory Zuckerman.
     
  • PTT Cracker Web site.  The PPT cracker plant is of interest to number of our readers.  PTTGC has just launched the web site.  PTTGC is committed to keep us informed on the development of the plant.  You can find this information on its project updates section:
     
    • The U.S. subsidiary of PTT Global Chemical (PTTGC America) has selected a site in Mead Township along the Ohio River in Belmont County, for the possible construction of a world-scale petrochemical complex, which is also known as an ethane cracker.
    • PTTGC America chose the site because of its location on the Marcellus and Utica shale region and its tremendous access to major highway, rail, pipeline and port infrastructure that would increase efficiency while reducing the environmental and financial costs of transportation.
    • If built, this facility would create hundreds of full-time jobs, thousands of construction jobs and multibillion dollars in investments.
    • PTTGC America is investing $100 million over the next six to nine months to conduct detailed front-end engineering design for a world-scale cracker complex on a site on the west bank of the Ohio River in Belmont County.
    • Contracts have been signed by Fluor Corporation and Bechtel Enterprises Holding Inc., two world-class engineering, procurement and construction firms that will separately conduct their respective front-end engineering design work.
    • PTTGC America has an option to purchase the property where the complex would be built.
    • PTTGC America will meet the rigorous environmental standards of the Ohio Environmental Protection Agency to ensure that the facility, if built, will not have an adverse effect on the air, the water or the health of the surrounding communities.
    • PTTGC America continues to work with the Ohio’s Governor’s Office and JobsOhio through this next stage of the project to ensure that project milestones are met to allow it to move forward.

If the project goes forward, PTTGC America will be a responsible, engaged and contributing member of the Belmont County community.

If you want to explore the web site, here’s the link:  

http://pttgcbelmontcountyoh.com/

You should also consider joining the Ohio Valley Oil and Gas Association.  It is featuring Paul Wojciechowski, Project Director of PTTGC America, at its General Membership Meeting which is open to members and member guests.

You will hear the latest information about the PTTGC Cracker and what it means to Belmont County, OH and the surrounding area.  With a projected cost of $5 - $5.5 billion dollars, you can see the opportunities that the cracker plant will provide during its constructional and when it is operational are substantial.

Date: Thursday, March 10, 2016,
Time: 6pm to 9:00pm
Where: Belmont College in St. Clairsville Ohio

For more information about the Ohio Oil & Gas Association and its March members’ meeting, contact Lisa Kindler @ 740.232.9219 or lkindler@ovoga.org

Cutoff for Registrations is March 7th @ 4 p.m.

You must be an Ohio Valley Oil & Gas Association member or member guest to register for the event

  • Halliburton now Having Problems with DOJ.  Halliburton’s already shaky $35 billion bid to buy rival Baker Hughes is at a breaking point, The Post has learned.

    The Department of Justice is pushing Halliburton to go beyond its threshold of selling assets with $7.5 billion in 2013 revenue before agreeing to a combination of the second- and third-largest players in the oil-field services industry, sources said.

    Plunging oil prices have punished oil-field services firms like Halliburton, which is struggling to cut costs and find buyers for oil drilling and other assets even at rock bottom prices.

    “I believe this ends in a DOJ suit,” said one source that is part of the negotiations and predicts Halliburton will not be able to meet the department’s request.

    Another source said the there is still a chance the deal — which would concentrate the industry between the merged Halliburton and Schlumberger — could pass regulatory muster.

    “I think it’s possible a deal comes together,” the source said. “But it’s not greater than a 50-50 chance.”

    The feds can sue at any time to halt the merger as the timing agreement with the company has expired but will likely give Halliburton a chance to revise its package of asset sales, sources said.

    When Halliburton announced the Baker Hughes deal in November 2014, the company said it was prepared to sell assets with as much as $7.5 billion in 2013 to gain regulatory clearance — but said it expected the required divestitures to be less.

    But after more than a year, the company still hadn’t reached a deal with the Justice Department on asset sales.

    Last month, Halliburton said it had presented a new plan to the feds, although it didn’t disclose any details. One analyst predicted total asset sales could top $10 billion in 2013 revenue.

    Halliburton is between a rock and a hard place. If it walks away from the deal, it owes Baker Hughes a huge $3.5 billion termination fee.

    At the same time, falling oil prices have taken their toll on the value of oil and gas assets, giving suitors the upper hand in sale negotiations.

    General Electric is in talks to buy some of Halliburton’s assets and is most interested in the company’s completion portfolio, which includes cementing operations, a source said.

    But GE Chief Executive Jeff Immelt has already had to defend his forays into oil and gas and doesn’t want to pay a penny more than necessary.

    Weatherford International is a possible buyer for the drilling assets. The company last week cancelled a presentation at a conference, leading to speculation it may be in talks with Halliburton.

    “The potential buyers are in a pretty good bargaining position,” a source said.

    Halliburton, whose shares are down 24 percent in the past 12 months, closed at $32.81 Friday.
     
  • U.S. Oil Production Finally Drops.  The U.S. Energy Information Administration reported that U.S. crude production in December finally dropped 1.8 percent compared to the same month a year ago. It’s the first year-over-year drop in U.S. oil production in a half-decade.

    The U.S. Energy Information Administration reported that U.S. crude production in December finally dropped 1.8 percent compared to the same month a year ago. It’s the first year-over-year drop in U.S. oil production in a half-decade.

    New government data shows the nation’s shale oil boom stalled in December, registering the first year-over-year drop in U.S. oil production in a half-decade.

    After yielding double-digit increases in the days of $100 oil and hovering above an annual decline for the first year and a half of the downturn, U.S. crude production in December finally dropped 1.8 percent compared to the same month a year ago, the U.S. Energy Information Administration says.

    The EIA’s report released Monday, helped boost crude prices and reassured oil market analysts who believe U.S. oil production will fall between 600,000 and 1 million barrels a day this year.

    Many analysts believe that is enough to restore balance to the oversupplied global oil market and begin an oil price recovery. But they may be disappointed, said Rusty Braziel, president of consulting firm RBN Energy in Houston.
     
  • Maine Governor Supports Kinder Morgan Pipeline.  Gov. Paul LePage has asked regulators to move quickly in considering a $5 billion natural gas pipeline proposal from Kinder Morgan, and others, in order to get more of the fuel into New England.

    LePage wrote last week to the Federal Energy Regulatory Commission, asking them to “expeditiously move forward” in considering Kinder Morgan’s Northeast Energy Direct project, which would connect Dracut, Massachusetts, to the gas-rich Marcellus shale in Pennsylvania.

    “We cannot afford inaction or delay on New England pipeline proposals, and it is critical that these projects move forward as quickly as possible,” LePage wrote.

    The $5 billion proposal would build a new pipeline through Pennsylvania, New York, New Hampshire and Massachusetts.

    LePage has made similar requests of FERC for other natural gas pipeline proposals, including three expansion projects from Spectra Energy.

    “Now that the [Northeast Energy Direct] project is before you, I similarly request that you move forward expeditiously in your review of that project to relieve New England’s natural gas capacity challenges,” LePage wrote.

    The region, which depends highly on natural gas for generating electricity, does not have enough pipeline capacity to serve demand during times of peak load and has faced a steady beat of other types of power generation retiring.

    As a greenfield project, the Kinder Morgan proposal has elicited opposition from environmental groups denouncing new infrastructure to move gas obtained by hydraulic fracturing, or fracking, and from others near the path of the proposed project.

    New Hampshire Gov. Maggie Hassan in December 2015 wrote to FERC urging regulators to carefully weigh the costs and benefits of the project.

    “I again encourage FERC to carefully consider whether the potential negative impacts of the project would disproportionately outweigh the benefits, particularly for the New Hampshire residents and communities that would bear the burden of hosting the project,” Hassan wrote.

    LePage urged regulators in the Feb. 3 letter, filed with FERC on Wednesday, to consider the public good of a new pipeline project against opposition driven by “not-in-my-backyard” sentiment, otherwise called NIMBYism.

    “I urge you to review the applications before you in a timely manner, paying sufficient attention to local concerns while fully understanding of the nature of public goods like infrastructure projects that provide enormous but dispersed benefits to society at large but often struggle to aggregate support in the face of “not-in-my-backyard” sentiment,” LePage wrote.

    As part of the application process, Kinder Morgan has already lined up local distribution companies who would buy capacity from the new line, which would deliver about 1.3 billion cubic feet of natural gas per day into New England and Canada, according to the company’s website.

    A decision on the company’s request is still pending review before FERC.
     
  • ExxonMobil Cuts CAPEX 25%.  Oil major ExxonMobil said Wednesday its slashing capital spending during 2016 by 25%, to $23 billion.

    The cuts will come primarily from oil and gas production, with a slight decrease expected again in 2017, partly from its chemical operations.

    ExxonMobil expects production to be 4 million to 4.2 million barrels of oil-equivalent per day (MMBOE/d) annually through 2020, essentially flat compared to 2015.

    Even with flat production, ExxonMobil forecast cash flow from operations would grow, assuming oil prices in the $40 per barrel (Bbl) to $80/Bbl range.

    “We remain steadfast in our mission to create superior long-term shareholder value,” CEO Rex Tillerson said, speaking at the company’s annual analyst meeting at the New York Stock Exchange. “We have the financial flexibility to pursue attractive opportunities and can adjust our investment program based on market demand fundamentals.”

    Those “attractive opportunities” could include a merger or two. Doug Terreson, an energy analyst with Evercore ISI, said Wednesday on CNBC (monitored by Kallanish Energy), ExxonMobil has amassed a roughly $30 billion war chest.

    “ExxonMobil is possibly preparing for merger and acquisition activity,” Terreson said. “You can purchase reserves much more cheaply than finding new reserves.”

    The company also said it would focus on paying a growing dividend, reassuring news to energy investors who have seen returns slashed throughout the sector.

    ExxonMobil shares closed Wednesday at $82.70. The stock has been relatively resilient despite the off-the-table decline in oil, falling just 7% over the last 12 months, even as the price of crude was nearly halved.

    ExxonMobil expects to bring online 10 new Upstream projects in 2016 and 2017, adding 450,000 BOE/d of working-interest production capacity.

    ExxonMobil just raised $12 billion which it stated was primarily to purchase more assets.  It commented that it thought prices for many assets are still too high.  We’ll have to watch and see where ExxonMobil makes its moves.
     
  • Exco 4th Qtr. Update.  EXCO Resources Inc (XCO) reported quarterly earnings results on Tuesday, Mar-1-2016. The company said it had a profit of $-0.03 Earnings per Share for the quarter. The results exceeded Wall Street expectations beating the analyst consensus estimate by $0.04. Analysts had a consensus of $-0.07. The company posted revenue of $64.70 million in the period, compared to analysts’ expectations of $69.30 million. The company’s revenue was down -49.4% compared to the same quarter last year. During the same quarter in the previous year, the company posted $-0.02 EPS.

    EXCO Resources Inc opened for trading at $1 and hit $1.06 on the upside on Friday, eventually ending the session at $1.05, with a gain of 6.06% or 0.06 points. The heightened volatility saw the trading volume jump to 394,829 shares. Company has a market cap of $297 M.

    In different news, on Jan 4, 2016, John C Jr Wilder (director) purchased 8,111 shares at $1.17 per share price. According to the SEC, on Dec 17, 2015, Harold H Jameson (Chief Operating Officer) sold 1,541 shares at $0.95 per share price. On Dec 17, 2015, Harold L Hickey (CEO & President) sold 2,003 shares at $0.95 per share price, according to the Form-4 filing with the securities and exchange commission.

    EXCO Resources Inc. is an oil and natural gas company engaged in the exploration exploitation acquisition development and production of onshore United States oil and natural gas properties with a focus on shale resource plays. The

    Company’s principal operations are conducted in certain United States oil and natural gas areas including Texas Louisiana and the Appalachia region.

    The Company focuses on the development of its core areas. This includes a portfolio of both oil and natural gas assets that provide the Company the optionality to allocate capital to enhance its returns under various commodity price environments. The Company holds acreage positions in three shale plays in the United States: East Texas and North Louisiana where it holds around 85300 net acres in the Haynesville and Bossier shales; South Texas where it holds approximately 52900 net acres in the Eagle Ford shale; and Appalachia where it holds around 157000 net acres prospective in the Marcellus shale.
     
  • Anadarko Cuts CAPEX for 2016.  Anadarko Petroleum said Tuesday it plans to sell up to $3 billion of assets and cut its 2016 capital budget by nearly 50%, Kallanish Energy reports.

    The independent producer’s 2016 capital expenditures are expected to range between $2.6 billion and $2.8 billion, compared with Anadarko’s previous estimate of $2.8 billion.

    Year-over-year capital expenditures (CAPEX) for onshore operations will be cut the most, by roughly $2.5 billion, according to Anadarko.

    Those plans include reducing its onshore rig count by 80%, to five operated rigs, from an average of 25 in 2015.

    The U.S. oil company has already closed or signed agreements to sell roughly $1.3 billion of assets this year, it said last week.
     
  • Rex Announces Exploration/Development Agreement.  Rex Energy said it’s signed a $175 million joint exploration/development agreement with an affiliate of asset manager Benefit Street Partners (BSP) concerning Rex’s Moraine East and Warrior North operated areas.

    The State College, Pennsylvania-based producer and BSP affiliate will jointly develop 58 wells in Rex’s Moraine East and Warrior North operated areas, located in Western Pennsylvania and eastern Ohio, respectively.

    “We are very excited to form this new relationship with Benefit Street Partners, which together allows us to further develop our Moraine East acreage while continuing to increase production and reserves from this strategic asset for Rex Energy,” said Tom Stabley, Rex’s CEO.

    Under the agreement, BSP has committed to fund 15% of the first 16 wells in Moraine East, 12 of which have been drilled and completed, and 65% of six wells in Warrior North, three of which have been drilled and completed.

    BSP will also have the option to participate in the next 36 wells within the joint development area for a 65% working interest. In addition, BSP will earn a 15%-20% assignment in Moraine East and Warrior North for all acreage within each unit they participate in.

    The agreement with BSP allows Rex Energy to complete 15 additional wells in 2016, while lowering the company’s net operational capital guidance to between $30 million and $40 million.

    The BSP affiliated company has committed $37 million to be paid at closing for the first 22 wells.  Once the first 15 wells within the joint development area are flowing into sales, Rex will be reimbursed for roughly $20 million, as these wells were drilled and completed in 2015.

    After the initial commitment of 22 wells, Rex will have roughly 30% of its Moraine East acreage held by production (HBP). Upon completion of the 58-well program, the company will have HBP approximately 42,000 acres in Moraine East and approximately 10,400 acres in Warrior North.
     
  • Eclipse Resources 4th Qtr. Update.  Independent producer Eclipse Resources raised its fourth-quarter and full-year production by 100% and 186%, respectively, from the same timeframes in 2014, Kallanish Energy reports.

    But a huge impairment charge related to low commodity prices took the wind out of the company’s profit sails.

    For the fourth quarter, production averaged 247 million cubic feet-equivalent per day (MMcfe/d), up from 123.80 MMcfe/d in the year earlier period.

    For all of last year, the State College, Pennsylvania-based company’s production averaged 207.90 MMcfe/d, up from just 72.73 MMcfe/d during 2014.

    “During the fourth quarter, we were able to continue to set record quarterly production levels, producing over 247.0 MMcfe/d, while lowering our per unit operating expenses and maintaining leading edge cost metrics,” said Thomas Liberatore, Eclipse’s chief operating officer.

    Despite the huge production growth, low commodity prices smacked Eclipse as many of its siblings, as the producer reported a fourth-quarter loss of $813.87 million, up/down sharply from a $33 million one year ago. Revenue rose to $65.88 million, from $50.37 million.

    For 2015, the company lost $971.41 million, up sharply from a $183.18 million loss in 2014. Revenue totaled $255.32 million, compared to $137.82 million one year earlier.

    The huge quarterly and full-year losses include a whopping $691.3 million one-time impairment charge related to rock-bottom commodity prices.

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

http://www.shaledirectories.com/blog/

Rig Count

  • Baker Hughes Rig Count the week of March 4, 2016
     
  • PA
    • Marcellus 16 unchanged
  • Ohio
    • Utica 12 unchanged
  • WV
    • Marcellus 12 down 1
  • TX
    • Eagle Ford – 46 down 1
    • Permian Basin  158 down 6
  • NM
    • Permian Basin – 17 unchanged
  • ND
    • Williston – 33 down 3
  • CO
    • Niobrara – 17 down 2
       
  • TOTAL U.S. Land Rig Count 463 down 10

PA Permits for February 25, to March 3, 2016

       County       Township    E&P Companies

1.    Allegheny    Forward        EQT
2.    Allegheny    Forward        EQT
3.    Allegheny    Forward        EQT
4.    Allegheny    Forward        EQT
5.    Allegheny    Forward        EQT
6.    Washington Amwell         Rice

OH Permits for week ending February 27, 2016

      County        Township  E&P Companies

1.    Belmont        York        Gulfport
2.    Belmont        York        Gulfport
3.    Belmont        York        Gulfport
4.    Belmont        York        Gulfport

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

M5 Properties