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Expo/Industry events for the next few months

Marcellus-Utica Midstream
January 30 – February 1, 2018
David L. Lawrence Convention Center
Pittsburgh, PA
https://www.hartenergyconferences.com/marcellus-utica-midstream 

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 

EQT Layoffs from Rice Acquisition.  EQT announced that the layoffs will be   300 people at Rice and another 100 people at EQT.

There are number of high quality individuals who will be looking for jobs.  I’m hopeful that EQT is making the names available to the other companies.  A number of companies could use these individuals immediately.  

Shale Directories will be glad to support these individuals anyway we can to help them find a new position as quickly as possible.

Ethane to China.  At the same time President Donald Trump witnessed the signing of West Virginia’s $83.7 billion deal with China Energy for petrochemical plants in the Mountain State, he also witnessed another deal to export 2.6 million metric tons of ethane per year to China.

Still, Business Development Corp. of the Northern Panhandle Executive Director Pat Ford believes the $26 billion deal that Houston, Texas-based American Ethane Co. signed with a Chinese firm will not hurt efforts to attract ethane crackers to northern West Virginia.

“Based on the data I have, there should be plenty of ethane here for multiple crackers,” Ford said. “To me, these investments in our area are very secure.”

After learning that China Energy plans to invest $83.7 billion for ethane crackers, power plants and related infrastructure in West Virginia, Ford quickly identified the former Weirton Steel Corp. property along the Ohio River as a prime location for such as facility. Other potential sites in Brooke and Hancock counties include the former Wheeling Corrugating plant at Beech Bottom and the area just south of Mountaineer Casino, Racetrack and Resort.

According to the U.S. Energy Information Administration, the nation’s ethane production should reach 1.7 million barrels per day in 2018. This is an increase of 450,000 barrels per day compared to 2016 yields.

West Virginia University Energy Institute Director Brian Anderson said the Royal Dutch Shell ethane cracker set for Beaver County, Pa. will likely consume about 100,000 barrels of ethane each day. He also said the potential PTT Global Chemical project at Dilles Bottom, as initially proposed, would use about 70,000 barrels.

Any ethane cracker would take ethane produced from Marcellus and Utica shale wells to “crack” the liquid into ethylene. After further processing, this material can be used to make anything from plastic bags to antifreeze.

Officials estimate building a massive ethane cracker would generate thousands of construction jobs, as well as hundreds of permanent jobs once the plant enters operation. Hundreds or even thousands of jobs related to the cracker could also result from each such plant, officials have said.

“The volume of ethane drawn from the shale gas is very prolific. We are very confident there will be enough for multiple cracker plants in this region,” Ford said.

In addition to the regional crackers, these pipelines now ship ethane out of the Marcellus and Utica shale region for processing elsewhere:

– the Enterprise Products Partners ATEX Express pipeline, which sends ethane to the Gulf Coast;

– the Sunoco Logistics Mariner East pipeline, which sends ethane to the East Coast; and

– the Sunoco Mariner West pipeline, which sends ethane northwest to Canada.

Also, Kinder Morgan Inc. is building the Utopia Pipeline to send ethane to Canada.

Now, federal officials expect enough of the natural gas liquid to allow American Ethane Co. to export about 2.6 million tons of ethane per year from the Gulf Coast to a new cracker in China that the Nanshan Group will build.

“American Ethane is greatly honored to receive this invitation by President Donald Trump and President Xi Jinping. This deal will create thousands of jobs in our countries and American Ethane will also invest in infrastructure in China,” company CEO John Houghtaling said.

Bullish Outlook for NatGas Prices.  Winter hasn't even begun and natural gas is already spiking. Prices jumped sharply last week, as fundamental concerns about an arctic blast and future winter weather squeezed shorts. They are likely to rise further through the end of the year and into 2018. The cold weather has been accompanied by a relative deficit of natural gas inventory. This surge in perceived demand along with tight supply triggered a technical breakout of prices to the upside. For most of 2017, price movements have been relatively range bound between a low of $2.56 in February, and a high of only $3.42 in May. This relatively narrow and somewhat low set of prices is a departure from historical levels, which have often had multi-dollar price swings in a matter of months. After exceptionally low average prices for 2015 and 2016, average annual prices are likely to rise both this year and next.

Shell Names New VP for Cracker.  Royal Dutch Shell has named a new leader to direct construction of its $6 billion ethane cracker plant in Western Pennsylvania, Kallanish Energy reports.

Hilary Mercer, who has spent 30 years working for Shell in a variety of roles, has been named vice president for the Beaver County cracker plant. She will oversee the project from construction through production.

She replaces Ate Visser, who had served as vice president of the project since 2014, according to the Beaver County Times newspaper.

Mercer, a native of Manchester, England, worked most recently in South Korea on an offshore floating liquefied natural gas platform called The Prelude.

Her Shell career has taken her to Malaysia, Australia, Qatar, the United Arab Emirates, Russia, Oman and the Netherlands.

She earned a master’s degree in mechanical engineering from the University of Oxford in 1987.

Shell also announced last week that it had officially started main construction of the cracker in Potter Township, near Monaca, Pa.

NW PA – NE OH Pipeline.  We have some progress to report, and a pair of public hearings coming up, for a pipeline project proposed to run from Meadville, PA area (Crawford County) and extend in a northwest direction to Ashtabula County, OH. Three weeks ago MDN brought you details about the proposed Risberg Line Project, to be built by RH Energytrans. The project will use approximately 32 miles of existing pipeline in an established Right of Way originating in the Meadville, PA area. Approximately 16 miles of new pipeline will be installed in Pennsylvania and approximately 12 miles of new pipeline will be installed in Ohio–meaning 28 miles of brand new “greenfield” pipeline needs to get built. The new news that we’ve learned is that two school districts in Ohio where the pipeline will traverse have agreed to reduce the amount of property tax the pipeline would need to make by 75% over a 15-year period. That’s a hug vote of confidence. We also learn that around 100 Erie and Ashtabula county property owners have already signed easements to allow the pipeline across their property. While no pipeline project anywhere in the northeast has a smooth ride, this one certainly seems to be sailing right along. 

Eclipse Resources 3rd Qtr. Update.  Eclipse Resources, the “super-lateral” Marcellus/Utica driller, turned in its third quarter 2017 update. Eclipse is a Marcellus/Utica pure play driller headquartered in State College, PA that drills mostly in the Ohio Utica. Eclipse has drilled the top three longest onshore oil/gas wells in the world. What do we glean from the 3Q17 update? Two of their world’s longest onshore wells–the Great Scott 3H and Outlaw C11H–are now online and pumping. They are pumping record-setting amounts of condensate. Each is averaging 3,300 barrels of oil equivalent (BOE) to date on a restricted choke, consisting of almost 50% condensate and 68% in total liquids. Gushers! During 3Q17 Eclipse drilled 10 wells in all, including four super-laterals with an average lateral length of over 17,500 feet. So far the company has drilled 11 super-lateral wells with an average lateral length of ~18,000 feet–averaging just 16 days from spud to total depth. Incredible! The company had average daily production of 353 million cubic feet equivalent per day (MMcfe/d). On an analyst phone call, Eclipse’s top brass said they are working to create a “reputable” super-lateral program, meaning (our words) building a successful program of long laterals that also makes big money.

Rex 3rd Qtr. Update.  Rex Energy reported a third-quarter net loss of $47.1 million, compared to a net loss of $55.2 million in the year-ago quarter, Kallanish Energy reports.

Third-quarter daily production from the company’s Appalachian Basin assets was 182 million cubic feet-equivalent, with 112.0 million cubic feet (MMcf) of natural gas, 5,100 barrels (Bbls) of natural gas liquids, 6,000 Bbls of ethane, and 700 Bbls of condensate, the company said.

Overall production was down from Q3 2016, from 18.2 billion cubic feet-equivalent (Bcfe), to 16.7 Bcfe, a drop of 8.2%.

Natural gas liquids and condensate accounted for 38% of net production in the quarter and 41% of total commodity revenue, it said.

“The third quarter of 2017 was a very busy quarter for Rex Energy, as we are nearing an inflection point for our projected production and EBITDAX growth going into Q4 2017,” said president and CEO Tom Stabley, in a statement.

The company saw full utilization of Gulf Coast transportation and improved natural gas and liquids pricing, a trend that is likely to continue, he said.

Fourth-quarter production is projected to grow by 10% from Q3, said the State College, Pa.-based independent producer.

Rex reported commodity revenue in the quarter was $46.6 million, up 29% from $36.2 million in the same period in 2016. The company also said it benefitted from new wells going into sales in the quarter.

In the Legacy Butler Operated Area in western Pennsylvania, the company placed into sales the four-well Wilson pad. The laterals average 9,300 feet and the initial 24-hour average sales rate from each well averaged 10.9 MMcfe/d, including 721 barrels of NGLs.

In the Moraine East Area in Western Pennsylvania, the company drilled four gross (four net) wells, completed six gross (3.4 net) wells and placed into sales 12 gross (6.5 net) wells in 3Q. It has an additional seven gross (5.5 net) wells awaiting completion.

In the Warrior North Area in eastern Ohio, Rex has begun completing three new wells on the Jenkins pad. The wells are scheduled to be completed in December and to go to sales in January.

TX October Permits.  The Railroad Commission of Texas issued 997 original drilling permits in October, up 16.6% from the 855 permits approved in October 2016, Kallanish Energy reports.

The October total included 885 permits to drill new oil or gas wells, five to re-enter plugged well bores and 107 for re-completions of existing well bores, the state agency said.

The breakdown of well types for those permits issued in October 2017 included 236 for oil, 46 for natural gas, 646 for oil or gas, 48 injection wells, and 21 other permits.

In October, the commission processed 257 oil completions, plus 91 gas, 39 injection and four other completions. That compares to 445 oil, 203 gas, 20 injection completions in October 2016.

Total well completions processed in 2017 year-to-date are 5,799, down from 9,405 recorded in the same period in 2016, the commission said. That is a decline of 38.3%.

Texas had 444 rigs at work, as of Nov. 2, according to well services company Baker Hughes. That is 49% of the active rigs in the U.S.

The top three areas for October oil completions were Midland with 83, San Angelo with 46 and San Antonio with 36. For natural gas completions, the top areas were San Antonio with 19, East Texas with 18 and Midland with 16.

For new permits to drill, the top three regions were Midland with 442, San Antonio with 126 and San Angelo with 79.

ExxonMobil Drilling Super Laterals in the Bakken.  Oil supermajor ExxonMobil is drilling shale well laterals that stretch farther than the length of New York’s Central Park, Bloomberg reports.

The company recently finished four wells in North Dakota’s Bakken Shale that extend horizontally for three miles, Barclays analyst Paul Cheng said in a research note after meeting with ExxonMobil executives.

And the oil giant’s eyeing the four-mile mark. That would be “a game changer that could potentially allow the company to leap frog the competition in unit cost and return metrics,” Cheng wrote.

In the Permian Basin that stretches beneath West Texas and southeast New Mexico, the company’s laterals are approaching the 2-1/2-mile threshold, Cheng wrote, roughly the length of Manhattan’s Central Park from north to south, Kallanish Energy understands.

NatGas Production to Rise In December.  U.S. shale production for December is expected to rise for a 12th consecutive month, the U.S. government said on Monday, as oil prices remain near their mid-2015 highs.

Total shale output is estimated to rise by more than 80,000 barrels per day (bpd) to 6.17 million bpd, the U.S. Energy Information Administration said during its monthly drilling productivity report.

Bakken output from North Dakota is set to rise by nearly 5,600 bpd to 1.1 million bpd, the highest level since March 2016, while Eagle Ford output is set to remain nearly flat at 1.2 million bpd.

Permian production is forecast to rise by 58,000 to 2.7 million bpd, a new record.

U.S. natural gas production was projected to increase to a record 61.7 billion cubic feet per day in December. That would be up over 1.3 percent from the November forecast, and would be the ninth consecutive monthly increase.

The EIA projected gas output would increase in each of the major shale basins in December, with the biggest increase in the Appalachia region, which includes the Marcellus and Utica shale formations.

Output in Appalachia was set to rise by 0.4 bcfd to 26.1 bcfd, the ninth consecutive increase.

DUC’s Are Up.  The EIA also said producers drilled 1,203 wells and completed 1,065 in the major shale basins in October, leaving total drilled but uncompleted wells at 7,342, the most since the data collection began in December 2013.

The number of DUCs (drilled, but uncompleted wells) in the seven most active drilling areas within the Lower 48 U.S. states, from September to October rose less than 2%, according to the latest Drilling Productivity Report.

The Energy Information Administration's November DPR reported 138 DUCs were added from September to October, bring the total in the Anadarko, Appalachia (Marcellus and Utica Shale plays), Bakken, Eagle Ford, Haynesville, Niobrara and Permian drilling hotspots to 7,342.

Five of the seven hotspots recorded a September-to-October increase in DUCs, led by the Permian, which added 102 DUCs to its inventory, raising its total to 2,533, Kallanish Energy reports.

The next largest month-to-month increase was in the Eagle Ford Shale, up 33 from September to October, to 1,485 total DUCs.

The Niobrara play was flat, at 685, while the Bakken actually reported a DUC drop, down 11, to 735, the DPR reported.

Permian Will Have Record Production in 2018.  There’s a sound common to much of the region: the slow, steady creak of a pumpjack. It’s a seemingly mundane, yet tangible, sign that the state’s oil economy is humming along. With oil prices stabilizing, the Energy Information Administration expects oil pumped from west Texas to lead the way to record-high production next year, passing a peak set back in 1970. You can see the story of the Permian off a lonely highway: within just a few hundred yards of each other, three drilling rigs out looking for oil and gas, despite prices hovering around $50 per barrel – not exactly a number to get excited about. In recent months, big players like ExxonMobil have made new, major investments in the region. The industry is expanding into previously unattractive areas near the Davis Mountains, in the Delaware Basin. Oklahoma-based ONEOK just announced plans for a new pipeline, and ExxonMobil has bought an oil transport terminal in what the company calls this “rapidly growing” area.

FERC Denies NY Appeal.  FERC denies N.Y. appeals over gas project.  FERC yesterday denied New York's multiple appeals over the Valley Lateral Project, a short gas pipeline proposed by Millennium Pipeline Co. The state and federal authorities have been sparring for months over which body has the final say on whether the project can be built. FERC said yesterday that its interpretation over the relevant Clean Water Act language is superior. And it dismissed New York's claims that letting project construction go ahead — which FERC authorized on Oct. 27 — would irreparably damage the environment. "We disagree with the New York [Department of Environmental Conservation]'s contention that New York DEC, as the certifying state agency, is the appropriate agency to interpret 'any ambiguous terms of the CWA,'" FERC said in an order. "In general, courts do not afford deference to state agency interpretations of federal law even where state agencies are delegated substantial roles in cooperative federalist schemes." New York Attorney General Eric Schneiderman (D) last month asked the 2nd U.S. Circuit Court of Appeals to block construction. Yesterday, the court said it'll hear New York's and FERC's arguments on Dec. 5.

Antero Wastewater Recycling Facility Is Ready.   Antero Resources’ $275 million wastewater recycling facility in Doddridge County, WV is either already operational, or will be within the next few days (sometime this week). In 2015 Antero hired Veolia Water Technologies Inc. to build a new shale wastewater recycling facility in Doddridge County. The facility, called the Clearwater Facility, will process 60,000 barrels of wastewater per day, separating water, salt and radioactive particles. The salt can be sold to municipalities for use as road salt–but frankly there’s not enough of a market to sell it all. And not all of it will be of sufficient quality to be sold that way. So Antero also spent $20 million to build a landfill next to the plant for the salt. According to the Clarksburg Exponent-Telegram, an Antero official recently said the Clearwater Facility is set to open in “the first part of November.” If you consider this is the 18th the facility should be up and running.

Continental to Sell More Oil Abroad.  Continental Resources has announced its second international sale of crude oil from the Bakken Shale in North Dakota/Montana, Kallanish Energy reports.

The company plans to sell 430,000 barrels of oil for January delivery to international markets. The transaction will take place in Cushing, Okla.

The Wednesday announcement follows an October deal for more than 1 million barrels of Bakken crude to Atlantic Trading and Marketing, which intends to export the oil to China.

“International markets are demonstrating accelerated interest in American light sweet oil, and Continental is currently negotiating additional potential sales,” said chairman and CEO Harold Hamm, in a statement. “This is the new reality of the U.S. as a world energy leader,” he added.

In December 2015, the U.S. lifted its ban on oil exports. Exports have grown steadily in the last two years, primarily to foreign refineries configured to process light sweet crude oil, Continental said.

“We expect steady U.S. production and increasing international sales will drive down U.S. inventories and help correct the recent disparity between Brent and WTI prices,” Hamm said. “Increasing export volumes will also help reduce America’s foreign trade deficit.”

Bakken Production Exceeds 1 Million Barrels,  North Dakota oil production increased 1.6% in September, to an average 1.1 million barrels per day (MMBPD), according to preliminary figures – the first time the state's production has equaled or exceeded 1.1 MMBPD in 18 months.

"It's very encouraging," said state director of Mineral Resources Lynn Helms, the Bismarck Tribune newspaper reported.

Natural gas production saw a slight decrease of less than 0.5%, to an average 1.9 billion cubic feet per day (Bcf/d).

It's the first time in three years North Dakota gas production has decreased while oil production increased, the Tribune reported.

Helms attributes that shift to a greater number of wells being developed outside of the core Bakken Shale, where wells tend to produce more natural gas.

The number of wells drilled but waiting for hydraulic fracturing crews was 853 at the end of September, a decrease of 10. The number of inactive wells decreased by 54, to 1,444 in September, Kallanish Energy learns.

North Dakota had 14,190 producing oil and gas wells in September, a new all-time high. The state had 55 drilling rigs operating in the state on Wednesday, a level that has held steady over the past few months, the Tribune reported.

Seventy-six percent of oil was transported by pipeline in September, while 11% was moved by rail, according to Jason Kringstad, director of the North Dakota Pipeline Authority.

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PA Permits November 9, to November 16, 2017

County                                   Township                                          E&P Companies

  1. Allegheny                                   Forward                                             EQT
  2. Allegheny                                   Forward                                             EQT
  3. Butler                                         Clearfield                                           PennEnergy
  4. Butler                                         Clearfield                                           PennEnergy
  5. Butler                                         Clearfield                                           PennEnergy
  6. Butler                                         Clearfield                                           PennEnergy
  7. Susquehanna                            Rush                                                  SWN
  8. Washington                                Amwell                                               Rice
  9. Washington                                Amwell                                               Rice
  10. Washington                                North Strabene                                 Range
  11. Washington                                North Strabene                                 Range
  12. Washington                                North Strabene                                 Range
  13. Washington                                North Strabene                                 Range
  14. Washington                                North Strabene                                 Range
  15. Washington                                North Strabene                                 Range
  16. Washington                                North Strabene                                 Range

 

OH Permits for week November 11, 2017

County                                   Township                                          E&P Companies

  1. Belmont                                      Goshen                                              Rice
  2. Belmont                                      Goshen                                              Rice
  3. Columbiana                                Franklin                                             Chesapeake
  4. Columbiana                                Franklin                                             Chesapeake
  5. Monroe                                       Ohio                                                   Statoil

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

Northeast Supply Enhancement