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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

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

Latest facts and a rumor from the Marcellus and Utica Shale

  • Chevron and Shell is it a coincidence?  Chevron has started permitting again in PA.  Now, this week Shell has obtained five permits this week – four in Lycoming County, PA and one in Tioga County.  

    One has to wonder why both of these majors are starting to obtain permits.  Do they know that the bottom is in on the oil price?  On St. Patrick’s Day, WTI closed over $40 a barrel.

    We will try to monitor Shell and Chevron as well as XTO, which is owned by ExxonMobil, to see if the majors start to ratchet up their onshore permitting.
  • U of Cincinnati Finally Does the Right Thing.  The University of Cincinnati has posted the data from its 28-month study on hydraulic fracturing and groundwater in eastern Ohio’s Utica shale play after media attention and pressure from business groups and elected officials to make the findings public, reports Energy in Depth Ohio (EID). The oil and gas advocacy group says the results of the study are in the form of a master’s thesis written by a student who assisted the lead researchers, but the university said it also plans to publish the study in a scientific journal. The study concludes that researchers “have found no evidence for natural gas contamination from shale oil and gas mining in any of the sampled groundwater wells” that were studied.

    We reported the results of the study a couple of weeks.  Kudos to Jackie Stewart at Energy in Depth.  She kept the pressure on University of Cincinnati until it relented.  
  • Obama Does It Again.  This time it’s the Atlantic.  The Obama administration will abandon its plan to allow new offshore oil drilling on the southeast coast of the U.S., dealing a blow to petroleum companies and marking a victory for environmentalists, coastal residents and the U.S. military.

    The Interior Department said Tuesday it will not auction off drilling rights for Atlantic Ocean waters off the coast of Virginia, North Carolina, South Carolina, Georgia and Florida.

    At the same time, the Obama administration opened the door to the possibility of allowing limited drilling in Arctic waters.

    The moves come amid declining industry investment in new exploration and production activities. The price of oil has fallen by about 70% since late 2014, making new investment less attractive. However, the industry continues to seek long-term investment opportunities under the assumption that oil prices will recover.

    Offshore drilling in the Atlantic had drawn vigorous support from the American Petroleum Institute, which represents companies in the industry, saying it would have bolstered jobs, tax revenue and economic development.

    “The decision appeases extremists," API CEO Jack Gerard said in a statement. “This is not how you harness America’s economic and diplomatic potential."
  • Congratulations to OOGA for its Winter Meeting.  We all know we are in an industry slowdown which we hope rebound in the fourth quarter of 2016 or in 2017.  OOGA did its customary great job in conducting its annual Winter Meeting.  A number of individuals from the E&P Companies drilling in the Utica were well represented as were the number of midstream companies.  

    Paul Wojciechowski, Project Director of PTTGC America at OVOGA Membership Meeting.  OVOGA pulled a real coup to Wojciechowski to speak at its March Monthly Meeting.  Everyone who attended the meeting commented very favorably about Wojciechowski.  

    Wojciechowski told the audience that PTTGC America had given Flour and Bechtel $50 million each to develop the engineering plans for the cracker plant.  The plans must be completed and finished by June 30th.  PTTGC is expected make a final decision by the end of the year.
  • Rex Lowers Expenses.  Despite reducing operating expenses by 32.5%, lower commodity prices and lower revenue caused independent producer Rex Energy to report larger net losses for both the fourth quarter and full-year 2015.

    For the final three months of the year, the State College, Pennsylvania recorded production volumes of 186.1 million cubic feet-equivalent per day (MMcfe/d), down 5% from the year-ago quarter.

    For full-year 2015, production volumes actually increased, by 27% over 2014, to 195.8 MMcfe/d, Kallanish Energy reports.

    Rex’s fourth-quarter net loss totaled $100.45 million, an increase from $71.66 million one year ago. The company reduced Revenue dropped by more than 50%, to $34.53 million, from $70.25 million one year ago.

    The company’s impairment expense fell by roughly $50 million in the fourth quarter, to $81.1 million, from $132.58 million one year ago.

    Fourth-quarter revenue fell more than 50%, to $34.53 million, from $70.25 million.

    For the year, Rex lost $372.94 million, vs. a loss of $49 million for 2014. Revenue dropped 42.3%, to $171.99 million, from $297.99 million during 2014.

    Full-year impairment expense jumped to $345.78 million, from $132.62 million.

    Rex’s operational capital investment expenditures last year totaled $184 million, with $171 million funding operations in the Marcellus and Utica Shale plays.

    In the first half of 2016, pursuant to the terms of the respective joint development agreements, the company anticipates that it will receive roughly $18.5 million from ArcLight and approximately $20.0 million from Benefit Street

    Partners related to reimbursements on capital investments made in 2015.
  • Pipeline “B” Has anyone heard about a new pipeline in Susquehanna County, PA? That’s the name of it.  (RUMOR)
  • Fracking Is Delivering.  In its daily briefing on Tuesday, the Energy Information Administration said that recent data indicate that oil production from hydraulically fractured wells currently accounts for nearly half of total U.S. crude oil production.

    Using well production and completion data from DrillingInfo and IHS Global Insight, the EIA created a profile of oil production in the U.S.

    In 2000, about 23,000 hydraulically fractured wells produced 102,000 bpd of oil in the U.S. - less than 2% of the national total. But by 2015, the number of fracked wells increased to an estimated 300,000. Production from those wells had increased to more than 4.3 M/bpd, comprising around 50% of total U.S. oil output.

    The EIA said this new oil production has mainly come from shale and other tight rocks in Texas's Eagle Ford formation and Permian Basin, as well as the Bakken and Three Forks formation of Montana and North Dakota.

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

Rig Count

  • Baker Hughes Rig Count the week of March 18, 2016
  • PA
    • Marcellus 19 unchanged
  • Ohio
    • Utica 1 down 1
  • WV
    • Marcellus 12 unchanged
  • TX
    • Eagle Ford – 45 up 2
  • TX & NM
    • Permian Basin – 152 unchanged
  • ND
    • Williston – 31 down 1
  • CO
    • Niobrara – 17 unchanged
  • TOTAL U.S. Land Rig Count 446 down 4

PA Permits for February March 10, to March 17, 2016

       County      Township   E&P Companies

1.    Lycoming    McIntyre    Shell
2.    Lycoming    McIntyre    Shell
3.    Lycoming    McIntyre    Shell
4.    Lycoming    McIntyre    Shell
5.    McKean      Norwich     Seneca
6.    McKean      Norwich     Seneca
7.    McKean      Sergeant   Seneca
8.    Tioga          Delmar      Shell

OH Permits for week ending March 10, 2016

       County       Township     E&P Companies

1.    Carroll        Washington    Rex
2.    Carroll        Washington    Rex
3.    Carroll        Washington    Rex
4.    Carroll        Washington    Rex
5.    Monroe        Wayne         Gulfport
6.    Monroe        Wayne         Gulfport
7.    Monroe        Wayne         Gulfport
8.    Monroe        Wayne         Gulfport

Joe Barone 610.764.1232
Vera Anderson 570.337.7149


Utica Summit 2019