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Expo/Industry events for the next few months

OOGA Winter Meeting
March 8-10, 2017
Hilton Columbus at Easton, OH 

Upstream PA 2017
March 21, 2017
Penn Stater Conference Center
State College, PA  

Utica Upstream 
April 5, 2017
Walsh University
Canton, OH  

Ohio Valley Oil & Gas Regional Expo
April 25-26, 2017
Belmont County Carnes Center
St. Clairsville, OH 

Appalachian Storage Hub Conference
June 15, 2017
Hilton Garden Inn
Southpointe, PA 

Latest facts and a rumor from the Marcellus, Utica, Permian, Eagle Ford, Bakken and Niobrara Shale Plays 

Mariner East 2X.  Last week, I spoke about Sunoco Logistics building a pipeline alongside Mariner East 2.  I heard this week that this new pipeline will be called Mariner East 2X.  (RUMOR)

Brits Want to Determine U.S. Energy Policy.  A British cosmetic company is helping to fund a protest in Pennsylvania against a natural gas pipeline, Kallanish Energy learns.

The firm, Lush, has provided $22,000 to protestors who are fighting the Atlantic Sunrise Pipeline, according to National Public Radio’s StateImpact Pennsylvania.

Don’t you just love these elitist Brits?  If you are ever shopping somewhere and you see Lush cosmetics on sale, please ask the store owner and manager to remove the product.  Tell them the company is fighting American energy independence.

Permian Pipeline.  A Texas-based midstream company has started construction on a new 75-mile natural gas pipeline to serve the Permian Basin in West Texas and New Mexico, Kallanish Energy reports.

The announcement came last week from Austin, Texas-based WhiteWater Midstream. It said its Agua Blanca Pipeline will serve the Permian’s Delaware Basin and run from Orla, Texas, to the Waha Hub, servicing portions of Culberson, Loving, Pecos, Reeves and Ward counties.

Agua Blanca will also have multiple direct downstream connections including a hook-up to the Trans-Pecos Header allowing the natural gas to be easily shipped to growing Mexican markets, the company said.

The 36-inch intrastate pipeline will have a capacity of 1.25 billion cubic feet per day (Bcf/d), which could be expanded to 1.75 Bcf/d.

The project is supported by firm commitments to ship more than 500 million cubic feet per day (MMcf/d), WhiteWater Midstream said.

It will provide producers and processors with “a much-needed outlet for the rapidly growing natural gas volumes in the Delaware Basin,” said WhiteWater CEO Christer Rundlof, in a statement.

The pipeline is expected to begin initial operations by Jan. 1, 2018.

Cabot 4th Qtr. Update.  Cabot Oil & Gas reported a fourth-quarter net loss of $292.8 million, compared to a net loss of $111.1 million in the year-ago quarter, Kallanish Energy reports.

Excluding impairments and other selected items, net income in Q4 2016 was $5.1 million, compared to a loss of 6.4 million in Q4 2015.

For full-year 2016, Cabot reported a net loss of $417.1 million, vs. a net loss of $113.9 million in 2015. Excluding impairments, the net loss was $97.4 million, compared to net income of $55.4 million in 2015, the company said.

“Our 2016 performance demonstrates Cabot’s ability to deliver strong operational and financial results, despite lower commodity prices for the majority of the year,” said CEO Dan Dinges, in a statement.

In Q4, the company drilled 12 gross (10.0 net) wells and completed 25 gross (25.0 net) wells.

For the full year, Cabot drilled 40 gross (38.0 net) wells and completed 76 gross (76.0 net) wells. The independent producer exited the year with 51 gross (45.2 net) drilled and uncompleted wells, of which 29 gross (26.2 net) wells are in the Marcellus Shale and 22 gross (19.0 net) are in the Eagle Ford Shale in South Texas.

Cabot reported production in Q4 was 164.2 billion cubic feet-equivalent (Bcfe), including 158.6 Bcf of natural gas, 822,700 barrels (Bbls) of crude oil and condensate and 106,500 Bbls of natural gas liquids. Equivalent production increased by 4% from Q4 2015.

For full-year 2016, production was 627.1 Bcfe, including 600.4 Bcf of natural gas, 4,013,100 Bbls of crude oil and condensate and 441,200 Bbls of NGLs.

It also said its proved reserves were 8.6 trillion cubic feet-equivalent, an increase of 5% from year-end 2015 reserves.

Cabot is predicting production growth of 5% to 10% in 2017, and it announced plans to boost oil production by 15% in 2017.

It's boosting its 2017 capital spending from $575 million to $650 million. Two thirds of the capital budget will go to the Marcellus and one third to the Eagle Ford. It is planning to drill 90 wells and to complete 90 wells in the two plays in 2017.

The Marcellus Saves PA Family Farms.  Everywhere one turns in the rural areas of Pennsylvania from Washington County in the southwest to Susquehanna County in the northeast, the shale revolution is boosting agriculture. Whether it is providing new sources of farm capital, lowering fuel and fertilizer costs, providing off-farm employment or maintaining the critical infrastructure needed by the industry, shale gas is having a very positive impact on agriculture.

Recapitalizing farming enterprises is one of the major challenges facing Pennsylvania's agricultural industry. Low commodity prices can starve a farm unless it has economic staying power or alternative sources of capital to sustain itself. Natural gas has provided such capital.

Relatively small natural gas companies such as Cabot Oil & Gas and Range Resources have literally paid billions of dollars in lease bonus payments and royalties to farmers in the counties where they operate. Cabot, for example, has paid out $894 million in royalties alone to 4,941 landowners since 2008. This additional capital has saved several farms and allowed many others to expand, while simply allowing a decent retirement for others so farms could transition to a younger generation.

Diesel fuel prices paid by farmers have also declined due the shale revolution. The USDA Economic Research Service, in a report issued this past August, noted the following:

The shale revolution has resulted in declining natural gas and oil prices, which benefit farms with the greatest diesel, gasoline, and natural gas shares of total expense.

FERC Approves Environmental Impact Statement for 2 Pipelines.  The Federal Energy Regulatory Commission has approved a draft environmental impact statement for two pipeline projects submitted by Columbia Gas Transmission and Columbia Gulf Transmission, Kallanish Energy reports.

The projects include construction of the 170-mile Mountain Xpress Pipeline in West Virginia, and the Gulf Xpress project, which adds compression to Columbia pipelines in Kentucky, Tennessee and Mississippi.

The new pipeline would run from Marshall County to Cabell County in West Virginia. There would be connections into Ohio and southwest Pennsylvania. Most of the line would be 36 inches in diameter.

The federal agency said the projects would have environmental impacts, but they could be reduced by mitigation projects.

The agency has scheduled five public meetings concerning the projects in March: four in West Virginia and one in Tennessee.

The two projects together would boost shipments of natural gas from the Marcellus and Utica Shale plays by roughly 2.7 billion cubic feet per day with connections to the Gulf Coast and elsewhere via Columbia pipelines.

Also working on the 562-page draft EIS were the U.S. Army Corps of Engineers, the U.S. Environmental Protection Agency, the West Virginia Division of Natural Resources and the West Virginia Department of Environmental Protection.

EOG to Increase 2017 Drilling.  EOG Resources plans to ramp up well drilling in 2017 by 7.8%, Kallanish Energy learns.

The company is planning to drill 480 net wells in the Eagle Ford, Delaware Basin, Rockies and the Bakken Shale this year. That well total is up from 445 net wells drilled by the company in 2016.

The company plans to spend from $3.7 billion to $4.1 billion on capital projects in 2017, and expects to see an 18% increase in 2017 oil production, the company said.

“EOG’s goal during the last two years was to exit the industry downturn in better shape than when we entered it,” said CEO William R. Thomas, in a statement. “We clearly accomplished that goal with spectacular improvements in all facets of the business.”

The company narrowed its losses in 2016 as oil prices climbed and operations improved, the company said.

It reported a fourth quarter 2016 loss of $142.4 million, compared to a net loss of $284.3 million in Q4 2015.

SWN Getting Good Results from 1st Utica Well.  Southwestern Energy says it's pleased with its first company-drilled Utica Shale well in northern West Virginia, Kallanish Energy understands.

The results led the company to speed up its second Utica well that was spud earlier this month in Washington County in southwestern Pennsylvania, said CEO Bill Way, during a recent earnings call with analysts and the media.

The company did not release specific production data from the O.E. Burge 501H well in West Virginia’s Marshall County. But it said the initial results show “the vast potential of this reservoir,” the company said, in a statement.

Way said the company was “very encouraged” by its first Utica results. Originally, Southwestern had planned on waiting until 2018 to drill into the deep Utica. But the results exhibited by other drillers led the company to speed up that drilling, Way said.

The Marshall County well has an 8,061-foot lateral. The company is also experimenting with adding more sand to the hydraulic fracturing or fracking process in its new Utica Shale wells.

Southwestern has one Utica well in Ohio acquired in a deal with Chesapeake Energy.

Southwestern will operate two rigs in 2017 in West Virginia, western Pennsylvania and Ohio, the company said.

For full-year 2016, the company reported a net loss of $1.1 billion, compared to a loss of $4.5 billion for full-year 2015.

Revenue for full-year 2016 totaled $7.65 billion, compared to $8.7 billion in 2015.

Oil and natural gas production in 2016 were comparable to 2015, at 282,500 barrels of oil-equivalent per day (BOE/d), although exploration costs dropped by 42%, EOG said.

The independent producer reported its year-end 2016 reserves were 2.147 billion barrels of oil-equivalent, with 55% crude oil and condensate, 19% natural gas liquids and 26% natural gas.

ExxonMobil Boosts CAPEX Spending in 2017.  ExxonMobil told investors at its annual analyst meeting Wednesday it plans to boost 2017 capital expenditure (CAPEX) spending by 15.8% in 2017, Kallanish Energy learns.

The oil supermajor plans to spend $22 billion on CAPEX this year, and ExxonMobil looks to spend $25 billion on average in CAPEX annually between 2018 and 2020.

More than 25% of planned spending this year will be made in what ExxonMobil calls “high-value, short-cycle” opportunities, including operations in the Permian and Bakken basins.

“Short-cycle investments are those expected to generate positive cash flow in less than three years after initial investment,” according to the company.

Antero 4th Qtr. Update.  Colorado-based Antero Resources reported record daily production in the fourth quarter of 2016, fueled largely by liquids in the Appalachian Basin, Kallanish Energy reports.

Production averaged 1.99 billion cubic feet-equivalent per day (Bcfe/d), the company said, a 33% increase over Q4 2015, Antero said.

The company reported 26% of that overall production was liquids. Liquids production in the quarter was a record 86,857 barrels per day (BPD), a 59% increase over Q4 2015, Antero said.

Liquids production contributed 30% of total product revenues before hedging, the company said.

Natural gas liquids and oil production averaged 60,405 BPD and 5,439 BPD, respectively in the last quarter.

Antero was the No. 1 producer of natural gas liquids in Appalachia in Q4 and the company is getting higher prices for liquids, said CEO Glen Warren, in a statement.

Antero recovered about 21,000 BPD of ethane, but left an estimated 66,000 BPD of ethane in the natural gas stream, the company said.

Antero is projecting production growth in excess of 20% in 2017, said CEO Paul Rady, in a statement.

In Q4, Antero reported a net loss of $486 million, compared to net income of $158 million in the year-earlier quarter.

For full-year 2016, the company reported a net loss of $849 million, including $1.5 billion in unrealized hedge losses. That compares to net income of $941 million in 2015.

The company reported its year-end proved reserves were 15.4 trillion cubic feet-equivalent, a 16% increase over year-end 2015 reserves.

In Q4, Antero completed and started production at 33 horizontal Marcellus Shale wells and 10 Ohio Utica Shale wells (all 10 wells were on one pad).

It is operating three drilling rigs and five completion crews in the Marcellus and three rigs and one completion crew in the Utica.

Eclipse Resources 4th Qtr. Update.  Pennsylvania-based Eclipse Resources continues to set company production records in the Appalachian Basin, Kallanish Energy learn.

“During the fourth quarter, we were able to once again set record production levels for the company while keeping our per unit operating expenses below our previously announced guidance range,” said CEO Benjamin Hulburt, in a statement.

It is the ninth reporting period in which Eclipse has met or exceeded production and operating expense guidance since the company went public in June 2014, he said.

In Q4 2016, average net daily production was 255 million cubic feet-equivalent per day (MMcfe/d) in the Marcellus and Utica Shale plays. That is a 3.2% increase from 247.0 MMcfe/d in Q4 2015.

For full-year 2016, average net daily production was 228.6 MMcfe/d, a 10% increase from year-end 2015’s 207.9 MMcfe/d.

In Q4 2016, the company lost $63.3 million, compared to a loss of $813.9 million in Q4 2015.

For the full year, the company lost $203.8 million. vs. a net loss of $971.4 million in 2015.

The company projects spending $300 million on capital projects in 2017, up sharply from the $176.9 million spent in 2016.

PDC Energy 4th Qtr. Update.  Denver-based PDC Energy is accelerating its Permian Basin drilling in West Texas and deferring additional drilling in 2017 in eastern Ohio's Utica Shale, Kallanish Energy reports.

The company is poised for growth in the Permian’s Delaware Basin and in the Wattenberg in Colorado, said CEO Ben Brookman, in a statement.

The company began sales last December on its first well in the Delaware Basin, and the company is encouraged by initial production, it said. The first well is producing about 1,185 barrels of oil-equivalent per day (BOE/d), 72% oil, the company said.

Last month, PDC added a third drilling rig in the Delaware Basin. A third rig had not been planned until the fourth quarter.

PDC said due to recent service cost increases, it's expecting to spend 10% more on drilling Delaware Basin wells. That extra cost will be absorbed by adjusting Wattenberg drilling in Colorado and deferring Utica drilling in Ohio, PDC said. The company said it's considering “various strategic options with the Utica asset.”

PDC is planning roughly $775 million in 2017 capital spending, up sharply from $400 million in 2016.

The company’s Q4 net loss was $55.6 million, compared to net income of $3 million one year ago.

For full-year 2016, PDC reported a net loss of $245.9 million, vs. a net loss of $68.3 million in 2015.

Fourth-quarter production grew 34%, to 6.4 million barrels of oil-equivalent (MMBOE), up from 4.8 MMBOE in Q4 2015, the company said.

Full-year 2016 production totaled 22.18 MMBOE, a 44% increase from full-year 2015’s 15,37 MMBOE.

New CEO at EQT.  Steven Schlotterbeck, a 17-year company veteran, on Wednesday assumed the position of chief executive at Pittsburgh-based  natural gas producer/gatherer/transporter EQT Corp.

Schlotterbeck replaces retired CEO David Porges, who will remain EQT’s executive chairman for the next year, Kallanish Energy reports.

Pennsylvania native Schlotterbeck also was appointed CEO at EQT Midstream Partners and EQT GP Holdings.

"It is a great honor to succeed Dave as the CEO of EQT Corp. … we have outstanding upstream and midstream assets; a strong financial position; dedicated leadership from our board; and the continued commitment of the most talented employees in the industry … ,” Schlotterbeck said.

 Schlotterbeck was appointed president of EQT in 2015, and joined EQT's board in January 2017. He also serves on the boards of the general partners of EQT Midstream Partners and EQT GP Holdings.

He joined EQT in 2000 as director, engineering when the company acquired Statoil's northeast U.S. assets. During the next few years he was promoted to various executive roles, including managing director of E&P Planning and Development, executive and senior vice president of Production Management and Planning, and vice president and director of Engineering.

In 2008, when EQT began its shift to focus on drilling, production, and midstream operations, Schlotterbeck became president of Production and subsequently added the positions of senior vice president of EQT in 2010, and executive vice president in 2013.

Schlotterbeck’s industry career began in 1987, with Marathon Oil.

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Rig Count 

  • Baker Hughes Rig Count the week of March 3, 2017
  • PA     
    • Marcellus 32 down 2
  • Ohio 
    • Utica 19 unchanged
  • WV 
    • Marcellus 10 unchanged
  • TX
    • Eagle Ford 69 up 5
  • TX & NM
    • Permian Basin – 308 up 2
  • ND
    • Williston – 38 up 3
  • CO
    • Niobrara – 20 up 1
  • TOTAL U.S. Land Rig Count 734 up 1

PA Permits February 23, to March 2, 2017

       County         Township         E&P Companies

1.    Bradford        Overton               Chief
2.    Clarion            Perry                 Laurel Mtn.
3.    Clarion            Perry                 Laurel Mtn.
4.    Clarion            Perry                 Laurel Mtn.
5.    Clarion            Perry                 Laurel Mtn.
6.    Clarion            Perry                 Laurel Mtn.
7.    Sullivan           Elkland              Chief
8.    Sullivan            Elkland             Chief
9.    Susquehanna    Franklin             SWN
10.    Washington    Nottingham         EQT
11.    Washington    Nottingham         EQT
12.    Washington    Nottingham         EQT
13.    Washington    West Pike Run    Rice
14.    Wyoming        Forkston            Chesapeake

OH Permits for week February 25, 2017

      County        Township    E&P Companies

1.    Belmont        Colerain      Ascent
2.    Belmont        Union          Ascent
3.    Belmont        Wayne        Gulfport
4.    Belmont        Somerset    Gulfport
5.    Belmont        Somerset    Gulfport
6.    Belmont        Somerset    Gulfport
7.    Monroe        Center          Gulfport
8.    Monroe        Center          Gulfport
9.    Monroe        Lee              Eclipse

Joe Barone 610.764.1232
Vera Anderson 570.337.7149

Utica Summit 2019