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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.”

FERC Approves HDD for ETP.  Energy Transfer Partners (NYSE:ETP) is pleased to announce that the Federal Energy Regulatory Commission (FERC) has approved the company’s request to resume Horizontal Directional Drilling (HDD) operations along the Rover Pipeline Project.

Drilling operations on nine HDD locations approved by the FERC are expected to begin within the week with an emphasis on the Captina Creek HDD in Belmont County, Ohio. The completion of the Captina Creek HDD will allow the full Phase 1 portion of Rover from Seneca, Ohio, to Defiance, Ohio, to be placed into service by the end of the year. Phase 1a of the Rover Project from Cadiz, Ohio, to Defiance, Ohio, was successfully put into service on August 31, 2017.

When completed, this important 713-mile pipeline will transport up to 3.25 billion cubic feet of natural gas per day from the Marcellus and Utica Shale production areas to markets across the United States as well as into Union Gas Dawn Storage Hub in Ontario, Canada.

The Rover Pipeline Project will continue to work with the FERC to adhere to the requirements outlined in its approval and look forward to successfully placing the full project into service in the end of the first quarter of 2018.

FERC Overrules NY DEC.  The Federal Energy Regulatory Commission overruled New York state regulators who had blocked construction of the 7.8-mile Valley Lateral natural gas pipeline.

FERC ruled the New York Department of Environmental Conservation waived its right to review the Valley Lateral by failing to act within a year of receiving Millennium Pipeline Co.'s application for said water-quality permit.

The state DEC, under Democrat Gov. Andrew Cuomo, had rejected the water-quality permit late last month, saying federal regulators had "failed to consider or quantify the indirect effects" of carbon emissions produced when the fuel shipped through the pipeline is eventually burned, called "downstream" emissions.

The Valley Lateral Project would supply natural gas to a $900 million power plant under construction in Wawayanda, N.Y., Kallanish Energy reports.

In justifying denial of the permit, New York regulators cited an Aug. 22 D.C. Circuit Court of Appeals decision that rejected an approval by FERC of a separate pipeline project in Florida.

In that case, the appeals court said FERC didn’t properly evaluate the effects of greenhouse gas emissions from the natural gas shipped by the pipeline.

FERC based its ruling on procedural grounds, stating the New York DEC had waived its right to review the pipeline project because it did not issue a decision within a year of receiving the November 2015 application.

With FERC's approval, Millennium indicated it plans to begin construction in November.

Industry groups cheered FERC's Friday decision. "We applaud FERC's finding in its declaratory order in the Millennium proceeding," said Don Santa, president and CEO of the Interstate Natural Gas Association of America. "The commission's decision establishes that statutory deadlines must have meaning for it to achieve the purpose intended by Congress."

Environmental groups, however, charged that FERC overstepped its authority. "FERC's reversal of Governor Cuomo's decision is an insult to New Yorkers and our right to protect our communities and our water," said Roger Downs, director of the Sierra Club's Atlantic chapter.

Williams Breaks Ground on Atlantic Sunrise Pipeline.  Williams Partners has announced construction is officially underway on its multi-billion dollar Atlantic Sunrise Pipeline, which is being built to connect Marcellus Shale gas in northeastern Pennsylvania to markets along the eastern seaboard.

“We are committed to installing this infrastructure in a safe, environmentally responsible manner and in full compliance with rigorous state and federal environmental permits and standards,” Michael Dunn, Williams’ executive vice president and chief operating officer said in a press release. “Our construction personnel are experienced, highly-qualified professionals who have undergone extensive training to ensure that this important project is installed safely and responsibly.”

The company broke ground Friday on two new natural gas compressor stations in Orange Township, Columbia and Clinton Township, Wyoming County. Work on the pipeline itself is expected to begin September 25. Once completed, the line will run underground, through 10 Pennsylvania counties: Columbia, Lancaster, Lebanon, Luzerne, Northumberland, Schuylkill, Susquehanna, Wyoming, Clinton and Lycoming.

Growing Pains in the Permian.  All U.S. shale fields have had growing pains, and the Permian Basins could be that there are just too many wells in the popular field.

A new report from the research and consulting firm Wood Mackenzie says that drillers in the Permian Basin, who have poured into the field in West Texas and eastern New Mexico at breakneck speed, risk bumping into the limits of the field’s geology in a few years.

The Permian next month will pump around 2.6 million barrels of oil daily and is expected to reach 5 million barrels per day by 2025, according to the U.S. Energy Information Administration.

Wood Mackenzie thinks oil production in the Permian Basin could peak at around 3.5 million barrels a day in 2021, though, unless drillers keep developing technology to boost production. The report notes that the first few years of an oil boom are typically the easiest.

“We’re drilling so many wells and with such tight spacing, should we really expect well No. 5,000 to perform like well No. 5 did?” said Robert Clarke, a research director at Wood Mackenzie in Dallas.

As companies develop the field aggressively with more wells, pressure gets depleted in the formations, and newer wells don’t produce at the same rate of older wells, the report says. The Wood Mackenzie report looked at infill wells located next to older producers.

There already are plenty of wells in the Permian, an immense and historic behemoth of an oil field in West Texas and eastern New Mexico. It’s been pumping oil since the first commercial well in 1921.

The most recent drilling boom started to pick up there in earnest around 2014, when operators started switching from drilling traditional vertical wells to drilling more horizontal wells using shale drilling techniques. Horizontal drilling was combined with hydraulic fracturing, a process of using massive amounts of water, sand and chemicals pumped at high pressure to crack open tight rocks.

Billions of investment dollars have flooded the Permian, where production grew even during the lowest points of the oil bust in 2016. Oil production is up 37 percent in the last two years, according to EIA data.

The Permian Basin had 380 drilling rigs at work last week, about 40 percent of all U.S. rigs, according to the service firm Baker Hughes.

All U.S. shale fields have bumped into growth problems of one kind or another, the report said.

After a frantic leasing spree that started around 2009 and 2010, crisscrossing South Texas, operators discovered that some parts of the Eagle Ford delivered vastly better results than others. The so-called “sweet spots” weren’t as large as companies originally thought, and drilling started to focus on a formation that roughly follows the Karnes-DeWitt county line.

In the Bakken formation in North Dakota and Montana, producers ran into logistics problems. There weren’t enough pipelines to carry their oil and gas to the refining center on the Gulf Coast.

The Haynesville Shale in Louisiana and East Texas saw the collapse of natural gas prices.

In the Marcellus Shale centered in Pennsylvania, operators ran into regulatory delays and found a more complex operating environment than in other states.

Senate Unanimously Approves Trump’s FERC Nominees.  The Senate Energy and Natural Resources Committee on Tuesday unanimously approved President Trump’s two nominations to the Federal Energy Regulatory Commission, Kallanish Energy reports.

The nominations of Kevin McIntyre and Kevin Glick now go to the full Senate for approval. It is unclear when that vote will be taken. The pair had testified before the committee earlier this month.

Republican McIntyre is an energy lawyer with law firm Jones Day. Democrat Glick is an attorney with the Senate committee

McIntyre would serve the unexpired term of Norman Bay that expires June 30, 2018, plus a full term that would run to June 30, 2023. Glick’s term would run through June 30, 2022. McIntyre will serve as FERC chairman at Trump's direction after he is confirmed.

When the two appointments are confirmed, FERC will be fully staffed with five commissioners.

For months, the agency had only two commissioners and lacked a quorum to be able to conduct business.

The other commissioners are Cheryl LaFleur, Neil Chatterjee and Robert Powelson. Chatterjee and Powelson were recently approved by the Senate.

Nexus Gets OH EPA Certificate.  The Ohio Environmental Protection Agency on Tuesday granted NEXUS Gas Transmission a water-quality certificate.

NEXUS needed the certificate before it could start building its $2.1 billion, 36-inch diameter natural gas pipeline across Ohio.

The certificate requires NEXUS to have detailed plans for how it would deal with storm water and unanticipated leaks of drilling fluid during pipeline construction, two problems that arose during construction of the unrelated Rover Pipeline in Ohio.

The 255-mile NEXUS pipeline will start near Hanoverton in Columbiana County and cross Washington, Nimishillen, Marlboro and Lake Townships in Stark County before entering the city of Green.

NEXUS is designed to carry up to 1.5 billion cubic feet of natural gas a day from the Utica and Marcellus shales to users in Ohio, Michigan and Canada. Detroit-based DTE Energy and Spectra Energy, which merged this year with Enbridge, a Canadian company, are partners in the project.

The Federal Energy Regulatory Commission approved the pipeline late last month but has yet to sign off on the construction plans.

NatGas Production Going Up Next Month.  The volume of natural gas production in the seven most prolific basins/plays in the Lower 48 U.S. states will rise 1.3% between September and October, the Energy Information Administration said Monday.

EIA’s September Drilling Productivity Report (DPR) projects gas production will increase by 788 million cubic feet per day (MMcf/d), to 59.75 billion cubic feet per day (Bcf/d), up from 58.96 Bcf, Kallanish Energy calculates.

Six of the seven plays, including the Anadarko, Appalachia (Marcellus and Utica Shale plays combined), Bakken, Haynesville, Niobrara and Permian all are expected to see a month-to-month increase in produced gas.

Only the Eagle Ford is projected to record a week-to-week production decrease, 11 MMcf/d, to 6.16 Bcf/d, from 6.19 Bcf/d in September.

In this update, the Eagle Ford productivity and production estimates are being revised down due to two factors: the production volumes from the source were revised down; and the anticipated impact from Hurricane Harvey on the production, drilling, and completion activities in southeast Texas.

Three of the six plays are expected to report triple-digit natural gas production increases, led by Appalachia, up 342 MMcf/d, or 7.5%, to 24.91 Bcf/d, from 24.56 Bcf/d in September.

The Permian is expected to see a 158 MMcf/d, or 1.8%, month-to-month increase in produced gas, to 8.81 Bcf/d, from 8.65 Bcf/d. The Haynesville is expected to record a 143 MMcf/d, or 2.1%, September-to-October gas production increase, to 7.03 Bcf/d, from 6.89 Bcf/d, the DPR projects.

Bakken’s July Production Surpasses June’s.  North Dakota’s oil plays produced 1.047 million barrels of oil per day (MMBPD) in July, the North Dakota Department of Mineral Resources said Friday.

That was up from June, when the state produced 1.032 MMBPD. The all-time high was 1.227 MMBPD of production in December 2014.

The state reached a preliminary all-time high of 13,981 producing wells in July, Kallanish Energy learns.

North Dakota also produced nearly 1.88 billion cubic feet per day (Bcf/d) of natural gas in July. In June, 1.85 Bcf/d of natural gas was produced.

On Friday, 56 rigs were actively drilling in North Dakota. The all-time high was 218 on May 29, 2012.

The North Dakota sweet crude price on Friday was $39.75/Bbl, according to Flint Hills Resources.

Lynn Helms, director of the state Department of Mineral Resources, said 99% of the drilling in North Dakota is targeting the Bakken and Three Forks formations. He said the estimated wells waiting on completion are 889, up 34 from June 30, to July 31.

Helms said oil price weakness is now anticipated to last through the end of 2017. “OPEC met the last week of July and decided to extend production cuts for nine months, but compliance has been less than 100%. OPEC meets again in November and members are currently discussing support for extending cuts to mid-2018. The markets are watching to see if U.S. shale production offsets OPEC cuts,” Helms said.

Halcon Sells Bakken Assets.  Halcon Resources has sold its remaining non-operated assets in North Dakota’s Williston Basin for $104 million in cash, Kallanish Energy reports.

The private company acquiring the Bakken Shale assets was not identified.

The properties are producing roughly 1,891 barrels per day (BPD) of oil, 1.93 million cubic feet per day (MMcf/d) of natural gas and 65 BPD of natural gas liquids, the independent producer said, in a statement.

The effective date of the transaction is April 1, and the deal is expected to close by the end of the year.

In August, Halcon closed on a $6 million cash sale of additional non-operated Williston Basin assets to a different party, the company reported.

Last month, Halcon closed on the sale of operated assets in the Williston Basin for $1.4 billion in cash. That deal covered 104,000 net acres in McKenzie, Williams, Mountrail and Dunn counties. At that time, Halcon said it had non-operated assets totaling about 15,600 net acres in the Williston.

The sales make Halcon a one-basin company, actively focused on the Delaware Basin in West Texas and New Mexico, where it has 41,000 net acres in Ward and Pecos counties.

Rex Energy Getting Good Results.  Rex Energy says it's pleased with initial production from 12 wells in the Moraine East area of western Pennsylvania, Kallanish Energy reports.

The six-well Shields pad is producing 3.6 million cubic feet of natural gas per day (MMcf/d), plus 676 barrels (Bbls) of natural gas liquids and 38 Bbls of condensate at the 30-day mark.

That total is equal to 7.9 MMcfe/d with production 54% liquids, said the State College, Pa.-based Company.

The wells produced at an average 24-hour sales rate per well, assuming full ethane recovery, of 9.2 MMcfe/d, consisting of 4.2 MMcf/d of natural gas, 781 BPD of NGLs and 50 BPD of condensate.

The pad consists of five Marcellus and one Upper Devonian Burkett well. The wells have average laterals of roughly 8,800 feet.

Rex Energy also placed the four-well Mackrell pad into service. The wells produced at an average 24-hour sales rate per well, assuming full ethane recovery, of 8.4 MMcfe/d, consisting of 3.9 MMcf/d of natural gas, 723 BPD of NGLs and 25 BPD of condensate. The wells have average laterals of 7,630 feet.

“We are extremely pleased with the strong performance of the six wells on the Shields pad and the four wells on the Mackrell pad, providing strong results from the eastern portion of our Moraine East area,” said president and CEO Tom Stabley, in a statement.

“In addition, we are pleased with the liquids production we have seen from the Shields and Mackrell wells,” he said.

Rex Energy said it expects to meet its third-quarter and year-end production guidance’s with the new wells in production.

Another Texas Firm Looking for Investments in the Appalachian Basin. Pathfinder was formed to acquire North American mineral and royalty interests, with an initial focus on the Marcellus and Utica Shale plays in Pennsylvania, Ohio and West Virginia. The management team has over 50 years of experience in oil and gas A&D and asset management with a proven track record in the Appalachian Basin.

“We are excited to partner with this team,” said Ali Mirza, Partner at D5. “Pathfinder’s management team has identified a repeatable, high reward acquisition strategy coupling rapid cash flow development with long term upside potential in our areas of interest. We believe this investment will further solidify our track record of disciplined, opportunistic oil and gas investing with high risk-adjusted returns for our partners.”

This is D5’s third Fund I platform investment. The firm is actively seeking opportunities across the energy sector. Investment sizes range from $5 million to $35 million.

Ridgetop Looking to invest in the Appalachian Basin.  Focused on the oil and natural gas sector in the Appalachian Basin, Ridgetop Capital Partners has closed on another round of fundraising and is eying mineral rights in the Marcellus and Utica Shale plays, according to Marcellus Drilling News.

The company raised $200 million to invest in natural gas leases in the Marcellus and Utica Shale plays. It previously invested $130 million in the region’s shale, claiming ownership in over 30,000 acres.

Ridgetop Capital Partners is a private institutional investment firm headquartered in Pittsburgh.

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PA Permits September14, to September 21, 2017

          County                                        Township                                          E&P Companies

  1. Butler                                           Winfried                                             PennEnergy
  2. Elk                                                Jones                                                 Seneca
  3. Elk                                                Jones                                                 Seneca
  4. Elk                                                Jones                                                 Seneca
  5. Elk                                                Jones                                                 Seneca
  6. Greene                                         Richhill                                              Rice
  7. Greene                                         Richhill                                              Rice
  8. Potter                                            Summit                                              JKLM 
  9. Sullivan                                       Cherry                                                Chief
  10. Sullivan                                       Cherry                                                Chief
  11. Susquehanna                            Lathrop                                              Cabot
  12. Susquehanna                            Lathrop                                              Cabot
  13. Susquehanna                            Lathrop                                              Cabot
  14. Susquehanna                            Lathrop                                              Cabot
  15. Susquehanna                            New Milford                                       SWN
  16. Susquehanna                            New Milford                                       SWN
  17. Susquehanna                            New Milford                                       SWN
  18. Washington                                West Pike Run                                 Rice

OH Permits for week September 16, 2017

           County                                        Township                                          E&P Companies

  1. Belmont                                       Wheeling                                           Ascent
  2. Belmont                                       Wheeling                                           Ascent
  3. Belmont                                       Wheeling                                           Ascent
  4. Belmont                                       Goshen                                              Rice
  5. Belmont                                       Goshen                                              Rice
  6. Belmont                                       Goshen                                              Rice
  7. Belmont                                       Goshen                                              Rice
  8. Belmont                                       Goshen                                              Rice
  9. Belmont                                       Goshen                                              Rice
  10. Belmont                                       Goshen                                              Rice
  11. Guernsey                                    Londonderry                                     Ascent
  12. Guernsey                                    Londonderry                                     Ascent
  13. Noble                                           Beaver                                               Antero
  14. Noble                                           Beaver                                               Antero

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

M5 Properties