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Expo/Industry events for the next few months

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/

2017 NARO Appalachia Annual Conference
October 30-31
The Greenbrier
White Sulphur Springs, WV
http://www.naro-us.org/event-2633934?CalendarViewType=0&SelectedDate=9/5/2017

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

Mountain Valley Pipeline Facing WVDEP Problem.  In March, the West Virginia Dept. of Environmental Protection (WVDEP) issued a federal water crossing permit for the Mountain Valley Pipeline (MVP)–a $3.5 billion, 301-mile pipeline that will run from Wetzel County, WV to the Transco Pipeline in Pittsylvania County, VA. In June, a group of profoundly radical “environmental” organizations (Sierra Club, West Virginia Rivers Coalition, Indian Creek Watershed Association, Appalachian Voices and Chesapeake Climate Action Network) filed a lawsuit in the U.S. Court of Appeals for the Fourth Circuit against the WVDEP for doing their job issuing the permit. Because of the pressure of that lawsuit, last week the WVDEP caved and reversed their decision, rescinding (called “vacating”) the permit for MVP. The WVDEP says they will now “re-evaluate the complete application to determine whether the state’s certification is in compliance with Section 401 of the federal Clean Water Act.”

More Money for Appalachian Basin Investments.  Ridgetop Capital Partners, founded in 2007 and headquartered in the Pittsburgh area, is a private institutional investment firm focused mainly on the oil and gas space. That is, they raise money from rich people (and businesses) and invest that money in project which they closely watch and influence, hoping to make their money back with a generous interest rate. A LOT of private money funds oil and gas development–there is nothing new or novel about Ridgetop. However, what is new and novel is that the company has just closed on another round of fundraising–chasing $200 million through the door–which they will now use to buy natural gas mineral rights (i.e. leases) in the Marcellus/Utica. The company previously invested ~$130 million in the Appalachian Basin, snapping up ownership in over 30,000 acres (most, perhaps all of it, in joint ventures with major M-U drillers). Where will Ridgetop likely invest to buy new acreage?

Texas August Permits.  The Railroad Commission of Texas issued a total of 1,125 original drilling permits in August, Kallanish Energy reports.

That compares to 660 permits in August 2016 -- a 70.4% increase.

The August 2017 total includes 987 permits to drill oil-gas wells, 14 to re-enter plugged bore wells and 124 for re-completions of existing well bores. The breakdown for those permits include 298 oil, 74 gas, 666 oil or gas, 64 injection, two service and 21 other.

In August 2017, the agency processed 401 oil, 115 gas, 38 injection and three other completions. That compares to 545 oil, 223 gas, 46 injection and eight other completions in August 2016, it said.

Total well completions for 2017 are 8,628, up from 4,380 recorded in the same period in 2016, a 97% increase.

Texas has 455 drilling rigs at work, according to Baker Hughes. That represents 48% of active rigs in the U.S.

The Midland area was No. 1 for oil-gas permits with 550. The San Antonio area was second with 123 permits and the Refugio area was third with 80.

For oil completions, the Midland area was No. 1 with 245, the Lubbock area was second with 39 and the San Angelo area was third with 37.

For gas completions, East Texas was first with 38. It was followed by Southeast Texas with 26 and the Refugio area was third with 17.

ConocoPhillips Resumes Full Production in the Eagle Ford.  Things have quickly gotten back to normal in South Texas, after Hurricane Harvey.

In a short statement, ConocoPhillips reported Tuesday it's resumed pre-storm production rates in the Eagle Ford Shale, Kallanish Energy learns. Those rates are roughly 130,000 barrels of oil-equivalent per day (BOE/d), said the Houston-based company.

With that news, the company said its third-quarter and full-year production guidance numbers will remain unchanged. Q3 production is expected to be 1.17 million barrels of oil-equivalent per day (MMBOE/d) to 1.2 MMBOE/d. Its year-end production is expected to be 1.34 MMBOE/d to 1.37 MMBOE/d.

Both estimates exclude Libya and reflect expected impacts from the San Juan, Barnett and Panhandle dispositions, ConocoPhillips said.

It has 213,000 net acres in the Eagle Ford, mostly in DeWitt, Karnes and Live Oak counties in Texas. It also has three condensate plants in the play, where it has been operating five rigs.

IOG to Start Drilling in the Eagle Ford.  Energy investment firm IOG Capital announced three new development drilling programs, located in the Eagle Ford, the Merge portion of the STACK play, and the Arkoma-Woodford.

The three new projects are anticipated to require up to $130 million of gross capital to fund well-defined, diversified, drill-ready development programs. These programs will be conducted through IOG’s newly formed affiliate, IOG Resources (IOGR).

Founded in 2014, IOG partners with exploration and production operators across multiple North American hydrocarbon basins to fund drilling capital in well-defined development programs, Kallanish Energy learns.

IOGR’s first joint development agreement was established in July 2017 with The Woodlands, Texas-based Earthstone Energy. Both companies will initially partner on the development of 11 Eagle Ford wells located in Gonzales County, Texas, this year.

The company’s second joint development program closed in August with an Oklahoma City-based private family operator that has partnered on several projects with the firm since 2015. This new development program in the Merge calls for up to 18 wells to be funded in Canadian County, Okla.

The third, and most recent development program, closed at the end of August with Oklahoma City-based Red Mountain Energy. The companies will jointly fund up to 20 wells targeting the Woodford in the Arkoma Basin.

IOG now has a diversified portfolio of assets including investments in the Permian, Eagle Ford, Bakken, Marcellus, and Arkoma-Woodford plays.

Mountaineer NGL Storage Delays OH Project.  Mountaineer NGL Storage wants to build a new underground NGL storage facility in Monroe County, Ohio, near Clarington, along the Ohio River. As we reported in April, the company needs customers to sign up to use the facility–a minimum of 1 million barrels of storage would get it going.

Mountaineer still needs to build a 3.25 million barrel brine pond; used to pump out the stored NGLs. Mountaineer is waiting for a clearance from the Ohio Dept. of Natural Resources to build the pond, which (in June) we said would likely to take “a few more months.” Strike that. The CEO of the project recently said he now does not expect to get those permits until “first or second quarter of next year.” He hastens to add that’s no problem, because his two biggest potential customers–the Shell ethane cracker in Beaver County, PA and the closer-by PTT Global Chemical cracker in Belmont County, OH, won’t be ready to start using ethane until 2020 at the earliest.

Stakeholder Midstream Expanding in the Permian.  Stakeholder Midstream said it will build a new natural gas gathering system in the Permian Basin to serve producers working in the Horizontal San Andres.

The system includes low-pressure gathering, liquids handling, sour gas treating, cryogenic processing and nitrogen rejection capabilities, Kallanish Energy learns.

In conjunction with its new natural gas system, Stakeholder also will expand its existing San Andres crude gathering system.

These new assets are supported by long-term contracts and dedications of more than 100,000 acres from Horizontal San Andres producers, the midstreamer said.

“The San Andres has a long history as one of the most prolific formations in the country for oil and gas producers pursuing vertical development,” said Stakeholder co-CEO Rob Liddell. “Today we are seeing very favorable economics coupled with strong production results as producers apply horizontal drilling techniques across the play. With more than 130 horizontal wells drilled over the past 12 months, we’ve moved rapidly to work with our customer base to design and build infrastructure that effectively manages the complex set of challenges presented by the San Andres sour gas stream.”

Low-pressure sour gas gathering lines will be located across Yoakum County, Texas, and into Lea County, N.M. A treating and processing facility will be built in Yoakum County. The new facility will include front-end liquids handling, an amine treater and acid gas injection well, a cryogenic processing plant with the capacity to process 60 million cubic feet per day (MMcf/d), and a nitrogen rejection unit.

Stakeholder’s gas system will be fully operational in the third quarter of 2018. Stakeholder currently is working with producers regarding expansions into Roosevelt, Chaves and Eddy counties in New Mexico and Cochran and Gaines counties in Texas and plans to announce significant expansions to the system backed by new acreage commitments by year-end.

September 20 Start Date for Atlantic Sunrise.  Atlantic Sunrise Pipeline is primed and ready to begin construction after receiving its very last required permit from Pennsylvania–an Air Quality Plan Approval for air emissions related to construction activities in Lancaster County. The PA Dept. of Environmental Protection (DEP) issued the Air Quality permit September 8th.  You may recall Atlantic Sunrise, a $3 billion, 198-mile pipeline project running through 10 Pennsylvania counties to connect Marcellus Shale natural gas from northeastern PA with the Williams’ Transco pipeline in southern Lancaster County, received water crossing permits from the DEP and U.S. Army Corps of Engineers a few weeks ago.

According to Williams, the builder of the pipeline, they now await an order from the Federal Energy Regulatory Commission (FERC) to begin construction. They expect to receive that order any day now. They hope (and expect) to begin construction Wednesday, Sept. 20th.

Chesapeake to Drill in the Utica in Bradford County, PA.  Chesapeake Energy CEO Doug Lawler says the company plans to drill a test Utica Shale well in its core Marcellus acreage in Bradford County, PA sometime early next year. Which is really big news? Bradford is in the northeastern corner of the state, next door to Susquehanna County (east of Bradford). Susquehanna and Bradford have been heavily drilled by Chesapeake–at least in the Marcellus. Both counties sit in the “dry gas” (methane only) zone of the play, with no NGL or oil production, according to MDN’s forthcoming Marcellus and Utica Shale Almanac (stay tuned for more details about the Almanac). There have been very few, if any, shale wells drilled into the Utica in either Bradford or Susquehanna. However, there have been a few Utica wells drilled in Tioga County, which shares a border with and sits west of Bradford. And beyond Tioga (in the northern tier) sits Potter County, where there are more Utica wells. So Chessy wants to see if the Utica in Bradford may be productive.

According to the forthcoming Almanac, Chesapeake had 473 actively producing shale wells in Bradford in 2016.

Rover and OH DEP Battling It Out.  Rover Pipeline and the state of Ohio remain locked in a battle of words over the natural gas pipeline across northern Ohio, Kallanish Energy reports.

Both sides have laid out their positions in detailed letters to the Federal Energy Regulatory Commission, which will be forced to mediate.

Ohio wants FERC to block remaining horizontal directional drilling (HDD) in Ohio until pipeline owner Energy Transfer Partners corrects environmental problems along the pipeline route in the state. The company wants to resume HDD drilling.

Last May, FERC had blocked additional HDD after the Ohio Environmental Protection Agency complained drilling muds had leaked from at least seven drilling sites across Ohio.

Those problems led Ohio to impose unilateral EPA orders on July 7, after Ohio was not satisfied by the company’s response.

On Sept. 6, the company asked FERC to be allowed to resume HDD drilling along the pipeline route, part of which is in operation. On Sept. 7, Ohio EPA Director Craig Butler outlined Ohio’s list of concerns in a three-page letter to FERC.

He said Ohio was especially troubled by “Rover’s level of systemic and unprecedented noncompliance and unwillingness to responsibly agree to a consensual order.”

The company “remains in substantial noncompliance” of Ohio’s July 7 orders, Butler said in his letter to FERC. Ohio, he said, has “made some progress” with the company to address the problems, but Ohio fears the company will not comply unless ordered to do so by FERC.

Ohio has proposed a significant fine against Energy Transfer Partners, but that fine has not yet been imposed. The two sides are at an impasse in negotiations.

Butler’s new letter drew an immediate response from Kevin Erwin, general counsel of Rover Pipeline LLC, in a seven-page letter on Sept. 11. He called Butler’s letter “inaccurate and misleading.” The company is bewildered by the EPA letter because has been cooperating with the state agency.

The scope of the HDD spills was far less than Ohio had described and the threat was overstated, he wrote. He urged FERC not to become a party to Ohio’s “unsavory tactics.”

The 711-mile pipeline will transport natural gas from the Utica and Marcellus shales to the Midwest, Canada and the Gulf Coast. The $4.2 billion project calls for two 42-inch pipelines to transport 3.25 billion cubic feet per day.

Industry Lawsuit Threat Has Positive Impact.   What a difference two months–and the very real threat of a lawsuit–can make. At the end of July, Penn Hills (in community as a symbolic action “meant to send a message to companies that the municipality is against oil and gas activities on Penn Hills property.”   Driller Huntley & Huntley has hired Texas-based Geokinetics to conduct seismic testing in the region and had wanted to conduct testing on 37 municipal-owned properties in Penn Hills, about 390 acres total. But Penn Hills resisted. So H&H’s attorneys at Steptoe & Johnson sent a “we’ll sue your rear-ends” letter and that got the attention of the symbolizers. Recently,  another vote was taken. This time it was 5 to 0 in favor of allowing seismic testing after all. The mayor (grumbling) said the municipality did it’s best to resist.

Harvey’s Impact on Petro Chemicals in the Appalachian Basin.  Hurricane Harvey showed the Gulf Coasts vulnerability to catastrophic storms, a lesson forgotten from Katrina almost a decade ago. The US Gulf Coast has been the geographic center of the US Chemical Industry and is globally the largest. Katrina, our far more modest hurricane, caused major disruption in chemical production depressing GDP by more than one percent. The bill from Harvey is likely to be much more.

In the decade between Katrina and Harvey much has changed for the Chemical Industry. Due to robust shale gas economics, the Chemical Industry annual investment in manufacturing is equal to all other sectors combined. This has positive trickle down. Disruption in this investment and production has national and global implications. 

So what now? Will the Harvey experience increase investments in petrochemical plants in the geographically safer Appalachian Basin — investments such as the Shell ethane cracker in Beaver County, Pa? Investments that are also closer to market demand?

Our experts at Utica Summit V, led by international petrochemicals consultant Tom Gellrich of TopLine Analytics in Philadelphia, will be asked to address the question.

We also will look at shale-related real estate development, industrial workforce, and the latest tallies in the multibillion-dollar private investments that are being made in Ohio’s Utica counties.

Utica Summit V, on Oct. 11 in Canton, Ohio, is the most significant regional conference on the long-term downstream benefits of the Utica Shale gas revolution.

For complete details, sponsorship information and registration go to www.uticasummit.com.

Manhattan Institute Report Supports More Pipelines.  The New York-based Manhattan Institute, a non-profit think tank with a mission “to develop and disseminate new ideas that foster greater economic choice and individual responsibility” recently released a new report titled, “The Energy Bottleneck: Why America Needs More Pipelines.”

 The 16-page report says that while America is enjoying an energy renaissance thanks to fracking, there is a growing energy bottleneck that is forcing oil and gas companies to turn increasingly to more “accident-prone and more expensive shipping alternatives, such as trucks, railroads, and tankers.” The report says to maximize the benefits of America’s energy renaissance, the Trump administration, Congress, and federal and state regulators should “prioritize expanding and upgrading the country’s inadequate pipeline infrastructure.”

DRBC Tries to Block Drilling in Delaware River Basin.  A joint federal-state commission on Wednesday voted to move ahead with a rulemaking that would prohibit horizontal drilling and hydraulic fracturing across a large swath of eastern Pennsylvania, as well as the states of New York, Delaware and New Jersey.

In a meeting of the board of the Delaware Basin River Commission, commissioners voted to publish for public comment a set of revised draft regulations for drilling operations within the river basin, which includes portions of the Marcellus Shale.

The vote was 3-1-1, with representatives of Delaware, New York and Pennsylvania voting yes, the Army Corps of Engineers, the federal government's representative voting no, and the New Jersey representative abstaining, Kate Schmidt, a spokeswoman for the DRBC, said.

Since the vote was a procedural resolution, no public hearing on it was required prior to commission consideration, Schmidt said.

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PA Permits September 7, to September 14, 2017

          County                                          Township                                          E&P Companies

  1. Bradford                                       Overton                                              Chief
  2. Bradford                                       Overton                                              Chief
  3. Bradford                                       Overton                                              Chief
  4. Butler                                           Franklin                                             XTO
  5. Butler                                           Franklin                                             XTO
  6. Clarion                                         Toby                                                   Northeast Nat Ener.
  7. Elk                                                Jones                                                 Hunt Marcellus
  8. Elk                                                 Jones                                                 Seneca
  9. Elk                                                Jones                                                 Seneca
  10. Elk                                                Jones                                                 Seneca
  11. Greene                                         Whitely                                               Rice
  12. Greene                                         Franklin                                             Rice
  13. Greene                                         Franklin                                             Rice
  14. Greene                                         Franklin                                             Rice
  15. Greene                                         Franklin                                             Rice
  16. Greene                                         Franklin                                             Rice
  17. Lycoming                                     Eldred                                                Inflection’
  18. Lycoming                                     Eldred                                                Inflection
  19. Lycoming                                     Gamble                                              Seneca
  20. Lycoming                                     Hepburn                                            Seneca
  21. Susquehanna                            Oakland                                             SWN
  22. Susquehanna                            Oakland                                             SWN
  23.  Susquehanna                           Oakland                                             SWN
  24. Susquehanna                            Oakland                                             SWN
  25. Tioga                                            Chatham                                           Shell
  26. Tioga                                            Chatham                                           Shell
  27. Tioga                                            Chatham                                           Shell
  28. Tioga                                            Chatham                                           Shell
  29. Washington                                East Finley                                        EQT
  30. Washington                                Somerset                                           Rice
  31. Washington                                Somerset                                           Rice

OH Permits for week September 9, 2017

             County                                   Township                                          E&P Companies

  1. Belmont                                       Pease                                                 Gulfport
  2. Guernsey                                    Londonderry                                     Ascent
  3. Jefferson                                     Smithfield                                          Ascent
  4. Jefferson                                     Smithfield                                          Ascent
  5. Jefferson                                     Smithfield                                          Ascent
  6. Jefferson                                     Smithfield                                          Ascent
  7. Monroe                                        Ohio                                                   Triad Hunter
  8. Noble                                           Beaver                                               Antero
  9. Noble                                           Beaver                                               Antero
  10. Noble                                           Beaver                                               Antero

Joe Barone jbarone@shaledirectories.com 610.764.1232

Vera Anderson vera@shaledirectories.com

Utica Summit