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NewsLetters

Expo/Industry events for the next few months

DUG Eagle Ford
August 29-31, 2017
San Antonio, TX
https://www.hartenergyconferences.com/dug-eagle-ford 
 
Shale Insight
September 27-28, 2017
David Lawrence Center
Pittsburgh, PA
http://shaleinsight.com/ 
 
West Virginia Energy Expo
October 4, 2017
Morgantown, WV
http://www.wvenergyexpo.com/  
 
Utica Summit
October 11, 2017
Walsh University
North Canton, OH
http://www.uticasummit.com/  
 
Midstream PA 2017
October 19, 2017
Penn Stater Conference Center
State College, PA
http://midstreampa.com/ 
 
For other events visit http://www.shaledirectories.com/site/oil-and-gas-expo-information.html
 

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

 
Universal Compressor Staffing Up.  I heard that Universal is currently hiring two frac crews.  (RUMOR)
 
Shell Hiring Welders.  It looks like welders could be making more than $200 per hour.  I heard that Shell is looking to hire 400 welders.  An extremely tight situation is going to get worse.  (RUMOR)
 
FERC Ready to Resume Meetings. Faced with a backlog of projects, the Federal Energy Regulatory Commission will resume open meetings on Sept. 20, Kallanish Energy reports.
 
That announcement came late Thursday from new FERC acting chairman Neil Chatterjee.
 
With a quorum finally restored, the commission will begin voting nationally on the orders that have been on hold since early February when FERC lost its quorum, he said, in a statement.
 
The Sept. 20 meeting will be at 10 a.m. in the Commission Meeting Room at FERC’s headquarters in Washington, D.C.
 
Without a quorum, FERC staff has been acting under limited delegated authority under federal rules. That delegation period that began Feb. 4 ends 14 days from Aug. 10 when the quorum is re-established.
 
Chatterjee of Kentucky and Robert Powelson of Pennsylvania were sworn in last week as FERC commissioners. The nominations of two additional commissioners, Kevin McIntyre and Rich Glick, are pending in the U.S. Senate. The fifth commissioner is Cheryl LaFleur.
 
President Trump has nominated McIntyre to be the FERC chairman.
 
Range & Cabot’s Leaders Speak.  EnerCom’s 22nd Annual Oil & Gas Conference kicked off   with presentations from Marcellus leaders, executives from Range Resources (ticker: RRC) and Cabot Oil & Gas (ticker: COG) speaking to investors.
 
Range Resources Chairman, President and CEO Jeff Ventura opened the day by outlining the company’s Marcellus and Louisiana operations. “The Marcellus Shale is the engine of the company,” Ventura remarked. Range Resources has been active in the Marcellus since 2004, when the company drilled the first vertical successful well in the formation. Since then, the company has been active throughout the Marcellus.
 
Range recently drilled successful wells at the extreme ends of its acreage in the Marcellus, proving the strength of its acreage throughout the play. In addition, Range still has a significant amount of drilling locations available. Ventura reported that the company has 124 pads with five wells each, and another 59 pads with 6-9 wells. Most of these pads can accommodate about 20 wells, with potential targets in multiple zones.
 
Doing more stages with fewer crews
 
Cabot executive Vice President and CFO Scott Schroeder commented on the rates of improvement in the company’s operations. The commodity price downturn forced many companies to rapidly improve their operations in an effort to stay profitable, and efficiency improvements abounded. Now, companies have to continue to improve beyond the current levels of effectiveness. Cabot is now “looking for singles and doubles, not home runs,” Schroeder remarked.
 
However, the company has still managed to make big improvements. Several years ago, Cabot would often complete about 400 stages per quarter, which would typically take two or three completions crews to accomplish. During Q2 2017, Schroeder reported, Cabot completed about 700 stages using only one completions crew, illustrating just how far the company has come in improving operations.
 
Both companies are continuing to improve differentials as pipeline capacity expands. For Cabot, Schroeder mentioned that Cabot will increase its takeaway capacity by 85% in the next two years, and Ventura reported similar expansion. Overall, both companies began The Oil & Gas Conference ® 22 on a strong note, with modern technologies and techniques driving good results even in a time of trying commodity prices.
 
Cabot Open To All Options.  US shale gas specialist Cabot Oil & Gas is researching asset deals and would not rule out a sale of its prolific Marcellus acreage, the company's chief executive said Monday.
 
At the company's board meeting in May, Cabot asked regional staff in the Appalachian basin for consolidation ideas. So far, it appears that options for acquiring overlapping acreage in the Marcellus shale are "limited", chief executive Scott Schroeder said at the Enercom conference in Denver.
 
He said the planned merger between Appalachian peers Rice Energy and EQT is an example of what Cabot is trying to achieve in its search for acquisitions.
 
"That's exactly what the industry needs," he said of the Rice-EQT merger. "We need consolidation in the industry. Their blueprint is exactly right, with the overlap and things like that.
 
"With that as a backdrop, we are limited in terms of that overlap."
 
Cabot owns about 179,000 net acres in the dry gas window of the Marcellus shale, primarily in Susquehanna County, Pennsylvania. The acreage holds around 8 trillion cubic feet of reserves and produced an average 1.7 million cubic feet per day in the second quarter.
 
Schroeder suggested that some of Chesapeake’s assets in the southern part of the play could make attractive acquisition targets.
 
"They're complementary and the wells are excellent just like ours," he said.
 
Schroeder also said the company would consider selling its Marcellus acreage if the terms are right.
 
"This tremendous asset, as it moves into maturity, makes sense as part of a larger portfolio, either one we own, or one that we don't own, for other like, high-quality-grade assets," he said.
 
"That's just the reality of the situation. The management team would not stand in the way of something that makes a lot of sense."
 
Blackstone Makes Big Bet.  According to the Wall Street Journal, private equity firm Blackstone Group has invested $7 billion in U.S. natural gas. The way the Journal puts it, Blackstone is “betting” $7 billion, implying it’s a risky roll of the dice. A seriously big chunk of that investment was the recent announcement that Blackstone has bought part ownership of Rover Pipeline for $1.57 billion.
 
However, it was a short paragraph in the WSJ article that really caught our attention. The WSJ says Blackstone has invested $250 million in Huntley & Huntley. 
 
H&H is a privately-held, Pennsylvania-based corporation that’s been around since 1912–founded as a geologic and engineering consulting firm for the oil and natural gas industry. Over the years the company has transitioned into a drilling company. The company is now owned by Keith Mangini, a petroleum geologist who started working at H&H in 1978. Mangini acquired the company in 1993 and since that time has served as its CEO. He added Mike Hillebrand as a partner in 1996. Does $250 million in private equity backing sound familiar? It should! That’s the exact amount of backing promised by another private equity firm (Denham Capital) for a different SWPA driller (LOLA Energy). LOLA was recently sold to Rice Energy   Delete this line???
 
EQT Fights Back.  Mountain Valley Pipeline (MVP) is not taking a ludicrous, outrageous lawsuit by anti-pipeline residents from West Virginia and Virginia lying down. They are fighting mad as recent court filings show. MVP is a $3.5 billion, 301-mile pipeline that will run from Wetzel County, WV to the Transco Pipeline in Pittsylvania Count VA. A lawsuit was filed in federal court at the end of July to block the MVP project. 
 
The lawsuit, filed in U.S. District Court in Roanoke, VA, seeks to block the Federal Energy Regulatory Commission (FERC) from doing its job by issuing a certificate to approve MVP. The plaintiffs claim FERC would be violating the U.S. Constitution by approving a private project that “takes” private land without just compensation. The plaintiffs maintain that according to the Constitution, land can only be taken for “public use” and that the pipeline is for private use, not for the public good. That’s the claim. It’s been said, “If these virulent antis win this case, it would emasculate FERC–take away its authority to approve major interstate pipeline projects.” MVP in a court filing last Friday said pretty much the same thing. MVP says in their filing the lawsuit asks the court to invalidate the Natural Gas Act–the law of the land–which would have the effect of stopping all pipeline projects being built. The outcome of this lawsuit is already preordained. The lawsuit will get tossed. The only question is, how fast?
 
PennEast Wants Speedy Approval.  PennEast Pipeline Co. officials have requested the Federal Energy Regulatory Commission expedite final approval of the company’s 120-mile pipeline since the commission again has a quorum after a six-month wait.
 
In a letter sent to FERC Thursday, PennEast Board of Managers chairman Dat Tran cited the needs of the 12 utility companies — i.e., shippers — under contract to purchase 90% of the gas transported by the pipeline, the Allentown (Pa.) Call newspaper reported.
 
The letter touts the economic benefits of the roughly $1 billion, 1 billion cubic feet per day capacity line, such as reduced natural gas prices and the creation of jobs and tax revenue, the Call reported.
 
PennEast spokeswoman Patricia Kornick told the Call Friday the pipeline company hopes to have the project completed by the second-half of 2018. It was first proposed in 2014.
 
The New Jersey Sierra Club quickly opposed PennEast’s latest request, calling it “outrageous” and sending a letter Friday to FERC asking the commission to reject it, Kallanish Energy learns.
 
“FERC must deny PennEast’s ridiculous request to speed up the approval process and instead consider their application deficient,” wrote Jeff Tittel, director of the New Jersey Sierra Club, the Call reported. “PennEast has not been able to prove they can get the necessary permits for construction and operation,” he said, referring to Pennsylvania Department of Environmental Protection permits that will be necessary, even with FERC approval, for construction to begin.
 
The New Jersey Department of Environmental Protection has yet to approve PennEast’s application for permits to construct in wetlands and across waterways.
 
PennEast would transport natural gas from the Marcellus Shale play region in northeast Pennsylvania to markets in New Jersey, Pennsylvania, New York and adjacent states.
 
Trump Speeds Up Pipeline Infrastructure.  Pipeline companies face enormous governmental roadblocks when it comes to building new pipelines. “Red tape” doesn’t begin to describe the hassles they face in going from government agency to government agency in order to build an interstate pipeline. Yesterday, with the stroke of a pen, President Trump helped correct that situation. Trump signed a new executive order that will speed up approvals of permits for highways, bridges, pipelines and other major building efforts by shortening the time for environmental reviews. Trump’s executive order revokes an idiotic Obama executive order aimed at reducing exposure to flooding, sea level rise and other consequences of mythical climate change. Obama intentionally screwed things up and created long delays. Trump is fixing it. The American Petroleum Institute and business groups applauded the new EO and said it will directly translate into more jobs…
 
TX Permits Way Up in July.  The Railroad Commission of Texas issued a total of 1,011 original drilling permits in July, up from 631 permits in July 2016, a 60.2% jump, Kallanish Energy learns.
 
The July 2017 total included 893 permits to drill new oil or gas wells, 10 to re-enter plugged well bores and 108 for recompletions of existing well bores.
 
The breakdown for those permits included 273 oil, 77 gas, 601 oil or gas, 53 injection and seven other permits, said the commission, which oversees oil and gas drilling in Texas.
 
In July, the commission processed 437 oil, 50 gas, 27 injection and two other completions. That compares to 566 oil, 243 gas, 44 injection and one other completion in July 2016.
 
Total 2017 well completions, to date, are 4,388, down from 7,285 recorded completions in the same period in 2016, the commission said, a 39.7% drop.
 
The top areas for permits to drill were around Midland, 482, and San Antonio, 120, third was San Angelo area, with 82.
 
For oil completions, the Midland area was No. 1 with 225, followed by the San Angelo area with 58 and the San Antonio area with 54.
 
For natural gas completions, the Lubbock area was No. 1 with 28, followed by the San Antonio area with 12 and Southeast Texas with 11.
 
It’s All Appalachian Basin Now.  MDN’s favorite government agency, the U.S. Energy Information Administration (EIA), has just made big changes to our favorite monthly report–the Drilling Productivity Report (DPR). The DPR is the EIA’s best guess, based on expert data crunchers, as to how much each of the U.S.’s seven major shale plays will produce for both oil and natural gas in the coming month. 
 
Until now, the EIA has always treated the Marcellus (primarily drilling in PA and WV) and the Utica (primarily in OH) as two separate shale plays. Beginning with this month’s report, they are combined into “Appalachia.” The stated reason for the change: “With the increasing number of wells in Pennsylvania being drilled into the Utica formation and some wells in Ohio producing from the Marcellus shale, the previous regional definitions based on surface boundaries are becoming less meaningful, especially where the two plays overlap. Furthermore, combining the relatively small number of active rigs across the broader Appalachia region should improve the precision of our productivity estimates.” That’s not the only big change. EIA also added a new shale play to the list–the Anadarko Basin (found mostly in Oklahoma, with a few counties in Texas). Because of the addition of the Anadarko, natural gas production is predicted to jump from last month’s predicted 52 billion cubic feet per day (Bcf/d) for August, to a wh
opping projected 59 Bcf/d in September. The newly combined Marcellus/Utica is projected to go from 24.3 Bcf/d in August to 24.6 Bcf/d in September, up 350 million cubic feet per day. Yikes! Combining the two regions really puts it in a different light. 
 
New Leases Signed in Wheeling, WV.  It’s not often these days we come across a story that mentions a new lease signed, and the amount of money paid as a signing bonus. Such is the case in Ohio County, WV. The Wheeling Park High School has just signed a lease with Southwestern Energy for $3,500 per acre for 66 acres–giving the school district $231,000 of newly found revenue, thanks to the Marcellus/Utica industry. No drilling equipment will be placed on or near school property. When the drilling eventually happens UNDER the school, and the wells begin to flow, Wheeling Park High School will then get more revenue–18% royalties on all gas produced…
 
Sierra Club Loses Another One.  The U.S. Court of Appeals for the District of Columbia ruled Tuesday the U.S. Department of Energy (DOE) conducted the necessary environmental and economic reviews before it approved the Freeport (Texas) LNG export terminal project.
 
The Sierra Club had challenged DOE’s review of the project, saying the agency didn’t comply with federal environmental laws before approving the Freeport terminal in 2014, and that its determination the terminal is in the “public interest” was flawed, The Hill newspaper reported.
 
But the court ruled yesterday DOE followed procedures outlined in the National Environmental Policy Act (NEPA) when it approved the project. The court rejected the Sierra Club’s argument DOE should have considered indirect environmental impacts of increasing LNG exports, Kallanish Energy understands.
 
“Under our limited and deferential review, we cannot say that the Department failed to fulfill its obligations under NEPA by declining to make specific projections about environmental impacts stemming from specific levels of export-induced gas production,” the court determined in an opinion written by Judge Robert Wilkins, a President Obama appointee.
 
The court also ruled DOE determined the project is in the public interest properly considered domestic economic impacts, foreign policy goals and energy security measures. All non-free-trade agreement exports are required to attain a public interest determination.
 
“Judges in the D.C. Circuit Court of Appeals have, once again, sensibly rejected the specious arguments advanced by the Sierra Club challenging federal authorizations of U.S. LNG exports,” said Fred H. Hutchison, executive director of pro-LNG export organizations LNG Allies and Our Energy Moment, in a statement.
 
“The Sierra Club has now tried — and failed repeatedly — to convince the Court that the Federal Energy Regulatory Commission (FERC) and the U.S. Department of Energy (DOE) did not comply with federal law in issuing licenses to build/operate LNG export terminals and to export natural gas from these facilities,” Hutchison said.
 
In a statement, the Sierra Club said it was “disappointed with the court's refusal to require DOE to use available tools to inform communities of the impact of this additional fracking prior to approving exports."
 
Henry Hub and Dominion South Pricing.  Drillers in the Utica and Marcellus Shale plays in the Appalachian Basin are getting more money for their natural gas, thanks to new pipelines, says the Energy Information Administration.
 
The difference between the Henry Hub national benchmark price in Louisiana and daily spot natural gas prices at pricing hubs in the Appalachian Basin has narrowed as new pipeline projects are completed, Kallanish Energy reports.
 
Eleven interstate pipeline projects were completed to serve Pennsylvania, Ohio and West Virginia in 2016, adding roughly 4.0 billion cubic feet per day (Bcf/d) of interregional capacity, the federal agency said.
 
An additional 25 pipeline projects are scheduled to be completed in 2017, producing 7.2 Bcf/d of additional capacity.
 
Through the first seven months of 2017, the difference between prices at Henry Hub and at Dominion South in southwest Pennsylvania averaged 53 cents per million British thermal units (MMBtu), about two thirds of the average difference of 76 cents during the first seven months of 2016, the EIA said.
 
EIA reported price differences between Henry Hub and other Appalachian Basin price points followed similar trends.
 
Appalachian regional prices are influenced by regional production rates and the availability of infrastructure to transport natural gas to demand centers.
 
Production has grown sharply in Pennsylvania, Ohio and West Virginia in the past few years and infrastructure to deliver natural gas has not kept pace.
 
The Appalachian region can still become oversupplied at times when production exceeds pipeline capacity. That drives producers to lower their prices relative to Henry Hub.
 
As of July 31, natural gas prices at Dominion South traded at $1.85/MMBtu, about $1/MMBtu lower than the Henry Hub price, EIA said.
 
In 2016, the difference between prices at Dominion South and Henry Hub widened from an average of 62 cents/MMBtu in the first half of 2016, to $2.55/MMBtu at the end of September 2016. New pipelines went into service, and the spread between Henry Hub and Dominion South fell to 49 cents/MMBtu by Dec. 31.
 
In early 2017, the spread dropped again and averaged 33 cents/MMBtu. It has since widened.
 
Whiting Selling Bakken Assets.  Whiting Petroleum has agreed to sell its Fort Berthold Indian reservation assets in North Dakota’s Bakken Shale for $500 million to RimRock Oil & Gas, Kallanish Energy reports.
 
The assets being sold are in the Williston Basin in Dunn and McLean counties. They span 29,637 net acres with 29 non-operated drilling spacing units and 17 operated wells.
 
Net daily production averaged 7,785 barrels of oil-equivalent per day (BOE/d) in the second quarter of 2017, the company said. Lease operating expenses for the properties averaged about $12.60 per BOE for the 12 months ending June 30, 2017
 
The deal is slated to close on Sept. 1.
 
Whiting said it will use the proceeds to repay $500 million of its current $550 million bank debt.
 
“The price received for these properties, which are largely non-operated, highlights the quality of Whiting’s Bakken/Three Forks assets,” said Whiting’s president and CEO James Volker, in a statement.
 
“The Fort Berthold properties represent only approximately 7% of Whiting’s second quarter total production. The sale provides Whiting additional liquidity to develop its industry-leading properties across the Williston Basin, where the company estimates it has 4,850 future gross drilling locations,” he said.
 
Why Don’t the Earth Loving Anti’s Clean up Their Messes.  
 
They also left 12 stray dogs at DAPL.  What a compassionate, caring lot!
 
The U.S. Department of Justice has awarded North Dakota $10 million to help reimburse the state for costs associated with Dakota Access Pipeline (DAPL) protests. The labor force used for the clean-up was the Army Corps of Engineers.
 
U.S. Sen. John Hoeven, Republican-N.D., announced the funding Tuesday, saying ensuring the safety for everyone in the protest area was a tremendous undertaking for law enforcement.
 
The funding will be used to pay for law enforcement salaries and expenditures during the crude oil pipeline protests, which comprised a majority of the costs, Kallanish Energy finds.
 
The protests' costs are estimated at between $38 million and $40 million.
 
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Permits

 
PA Permits August 10, to August 17, 2017
 

            County                                       Township                                          E&P Companies

  1. Allegheny                                     Forward                                             EQT
  2. Allegheny                                     Forward                                             EQT
  3. Allegheny                                    Forward                                             EQT
  4. Butler                                           Allegheny                                          EM Energy
  5. Greene                                         Franklin                                             Rice
  6. Greene                                         Franklin                                             Rice
  7. Greene                                         Franklin                                             Rice
  8. Greene                                         Franklin                                             Rice
  9. Greene                                         Franklin                                             Rice
  10. Greene                                         Franklin                                             Rice
  11. Greene                                         Wayne                                               Rice
  12. Lycoming                                     Jackson                                             SWN
  13. Lycoming                                     Jackson                                             SWN
  14. Lycoming                                     Jackson                                             SWN
  15. Potter                                            Hector                                                JKLM Energy
  16. Susquehanna                            Jackson                                             SWN
  17. Washington                                Robinson                                          Range
  18. Washington                                Robinson                                          Range
  19. Washington                                Robinson                                          Range
  20. Washington                                Robinson                                          Range
     
OH Permits for week August 12, 2017
 
        County Township E&P Companies
 
1. There was no permitting report this past week.
 
Joe Barone jbarone@shaledirectories.com 610.764.1232
Vera Anderson vera@shaledirectories.com 570.337.7149
Northeast Supply Enhancement