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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 
 
Emerging Opportunities Ohio River Valley Conference
February 22, 2018
Oglebay Resort
Wheeling, WV
http://emergingopportunitiesorv.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 

 
U.S. Ethane to China.  INEOS and China’s SP Chemicals agree long term supply agreement for ethane from US Shale Gas.  Agreement includes construction of new carrier ship, the largest ethane carrier ever built
 
David Thompson, CEO of INEOS Trading & Shipping, said: ‘This is another world first for INEOS after importing shale gas to Europe in 2015. By bringing in US ethane from shale gas to China for the first time, we are now leading the way in shipping ethane worldwide to meet the needs of an expanding chemicals sector. We are excited to work with a client such as SP Chemicals and we look forward to delivering this historic project’.
 
INEOS has today announced a long-term supply agreement with SP Chemicals to deliver ethane from US shale gas to China. The agreement, which will see US ethane from shale gas shipped to China for the first time, will supply SP Chemicals with a long-term competitive supply of ethane for its industrial production.
 
The deal will involve the construction of a 95,000cbm capacity ship which is expected to be delivered in 2019. Known in the US as a ‘Very Large Ethane Carrier’ or VLEC it will be the largest ethane carrier in the world, and will ship US ethane from shale gas to SP Chemicals’ new gas cracker facility, currently under construction in Taixing China. As with the INEOS Dragon ships, this vessel will be operated by EVERGAS. It will be the first VLEC in their fleet of 23 gas ships. The ship will be built in China under the management of the JACCAR Group.
 
Ethane is used to make ethylene - one of the world’s most important chemical building blocks. Ethylene is an important raw material used to make products for a wide variety of industrial and consumer markets such as transportation, electronics, textile and construction.
 
David Thompson, CEO of INEOS Trading and Shipping, said, “This is another world first for INEOS after importing shale gas to Europe in 2015. By bringing in US ethane from shale gas to China for the first time, we are now leading the way in shipping ethane worldwide to meet the needs of an expanding chemicals sector. We are excited to work with a client such as SP Chemicals and we look forward to delivering this historic project.”
 
Chan Hian Siang, CEO of SP Chemicals, said, “SP Chemicals is honored and very happy to work with INEOS, a first-class global company, to ship ethane over a journey of more than 18,900 km across the Pacific Ocean from USA to Taixing City, Jiangsu province, PRC.  It has long been a dream for SP Chemicals to integrate upstream.  SP Chemicals will commission a gas cracker plant in 2019 to produce 650,000 tons per annum of ethylene. This first long-term supply agreement for ethane with INEOS will be an important milestone for SP Chemicals to achieve self-sufficiency for its ethylene requirements.”
 
Jacques De Chateauvieux, Chairman of the JACCAR Group, said,  “This Contract illustrates JACCAR’s ability to offer a comprehensive solution with type C Tri-lobe VLEC tanks developed by JHW Engineering and Contracting, in co-operation with the  Hartmann Group up to the contracting and operating by Evergas. We feel honored by the trust of INEOS in us in delivering and operating the world’s largest VLEC with type C tanks.”
 
Steffen Jacobsen, CEO of Evergas, said “We are very pleased to further strengthen our relationship with INEOS co-operating on the seaborne transportation of Ethane from the US to China”.
 
INEOS has been sending LNG to Europe from Philadelphia.  These shipments will probably be from Philadelphia also.  Maybe this is why the Mariner 2 East Pipeline is so big.
 
Soaring Chinese Demand for NatGas.  China's demand for natural gas will continue to soar toward 2040, outstripping domestic output by around 43 percent, according to an International Energy Agency (IEA) report published Tuesday. "China's annual gas production will more than double to 340 billion cubic meters in 2040, with shale gas a major contributor, but consumption is foreseen to grow even faster, reaching 600 billion cubic meters," said the China Special Report of the World Energy Outlook 2017. The rise of natural gas use is the result of the government promoting natural gas as a cleaner alternative to coal. Overall energy demand is growing much slower than that during the early 2000s, the report noted.
 
China is experiencing a significant NatGas shortage as you read this article.  The weather is very cold in China and the government has closed down chemical plants, rationed NatGas to consumers and cranked up the coal plants.
 
The government is really struggling to meet Paris Climate Accord goals on pollution.  For the Chinese to meet these goals, it will have to substantially increase imports of NatGas.  It’s going to be more NatGas than anyone can imagine.    
 
Big Jump in TX Permits in November.  The number of Texas drilling permits issued in November jumped by 76.3%, Kallanish Energy reports.
 
The number went from 673 in November 2016, to 1,187 in November 2017, said the Railroad Commission of Texas, in a report filed this week.
 
The November 2017 total included 955 permits to drill new oil or gas wells, 11 to re-enter plugged well bores and 221 for recompletions of existing well bores.
 
The breakdown included 358 oil, 66 gas, 682 oil or gas, 57 injection, zero service and 24 other permits, the state agency said.
 
In November 2017, the commission processed 388 oil, 74 gas, 29 injection and one "other" completion permits. That compares to 342 oil, 151 gas, 24 injection and one "other" completion permit in November 2016.
 
Approved well completions in 2017 through Nov. 30, are 6,291, down from 9,923 recorded in the same period in 2016, the commission said.
 
As of Dec. 8, the Texas rig count was 459; representing 49% of all active rigs in the U.S., reports oilfield services firm Baker Hughes, a GE company.
 
The most permits to drill in November were recorded in the Midland area, with 657, followed by the San Antonio area with 131 and the Lubbock area with 65.
 
The Midland area was No. 1 for oil completion permits with 207. Second was the San Angelo area with 49 and third was a tie between the Refugio area and the Lubbock area, both with 27 permits.
 
For gas completions, East Texas was No. 1 with 23 permits, followed by the Midland area with 16 and the Panhandle with 14.
 
Eclipse Buys Travis Peak Resources in PA.  Eclipse Resources said today it’s signed a deal with Travis Peak Resources for oil and gas leases, wells and other rights and interests covering roughly 44,500 net acres in Pennsylvania’s Tioga and Potter counties for $93.7 million in stock.
 
The independent producer also announced the company and its Eclipse Resources Midstream unit have entered into an option agreement under which Midstream acquired the right to purchase all outstanding equity interests of Cardinal NE Holdings for $18.3 million in cash from Cardinal Midstream II.
 
“Eclipse Resources has today announced it has entered into definitive agreements to acquire a strategic Utica acreage acquisition in northcentral Pennsylvania that is expected to significantly increase the company’s inventory of highly economic drilling locations, and allow the company to continue to leverage its innovative drilling and completions techniques while remaining Appalachian basin-focused,” said Eclipse chairman, president and CEO Benjamin W. Hurlburt.
 
Hurlburt said the first well spud in what Eclipse is calling the Flat Castle area is slated for the first quarter of 2018, with full-scale development scheduled for the fourth quarter, Kallanish Energy reports.
 
“From a geological perspective, this area is similar in depth to our Ohio dry gas acreage and is well delineated with a meaningful number of offset results, while lying within what we believe to be the highest gas in place of the prospect area,” according to Hurlburt.
 
State College, Pa.-based Eclipse anticipates the gas it produces in the Flat Castle area will be transported through the Dominion and Tennessee gathering systems.
 
The Flat Castle Acquisition is expected to close in January, with an effective date of Sept. 1, 2018.  This date is past
 
EQT CAPEX $2.4 Billion in 2018.  EQT Corp, the biggest U.S. natural gas producer, said on Wednesday it expects to spend $2.4 billion next year, the majority of which will be to develop more wells in two key shale formations in the Appalachian region.
 
EQT’s shares were up 2.6 percent at $57.47 in afternoon trading.
 
The company recently completed its $6.7 billion acquisition of Rice Energy a deal that combined two of the largest players in the Marcellus and Utica shale formations.
 
EQT’s budget is 60 percent more than its forecast for 2017 as its looks to boost its production of natural gas, which is expected to be the main source of power generation in the United States in 2018.
 
The Pittsburgh, Pennsylvania-based company has earmarked $2.2 billion of its overall 2018 budget to develop wells – 139 in Marcellus and 25 net wells in Utica.
 
The company said it expects total production sales volume of 1,520-1,560 billion cubic feet equivalent (Bcfe) in 2018 and sales volume to increase 15 percent in 2019.
 
The 2018 sales volume forecast is lower than 1,569 Bcfe RBC Capital Markets analyst Scott Hanold was expecting.
 
EQT had said in March it expected $1.5 billion in capital expenditure this year. That was two months before it announced the deal to buy Rice Energy.
 
In July, EQT forecast sales volumes of 825-840 Bcfe for 2017.
 
Up to Tuesday’s close, EQT shares had fallen 4.7 percent since it announced the Rice Energy deal, while the broader S&P 500 energy index has risen 4.7 percent in that same period.
 
More Good News for EQT’s Mountain Valley Pipeline.  The Mountain Valley Pipeline project cleared another regulatory hurdle last week, as a Virginia state panel approved the $3.5 billion line, Kallanish Energy reports.
 
By a 5-2 vote, the Virginia Water Control Board last week issued a certification for the project that will run through six counties in Virginia.
 
The board was required to determine whether there is “reasonable assurance” water along the pipeline’s route would not be contaminated during construction.
 
The board’s approval disappointed and angered environmentalists. Dozens of people had spoken against the pipeline project during two days of hearings in Richmond, Va.
 
The 301-mile pipeline would run from West Virginia to southern Virginia. It would carry natural gas from the Marcellus and Utica shales, from Wetzel County, W. Va., to Pittsylvania County, Va.
 
The MVP is being developed by Mountain Valley Pipeline LLC, a joint venture of six companies. It will be operated by EQT Midstream.
 
Thai Coal Company Makes 6th Investment in the Marcellus.  A Denver investment firm, backing by a half-billion-dollar investment from a Thai coal mining giant, is making its sixth acquisition in 30 months in Northeast Pennsylvania’s Marcellus Shale play.
 
Kalnin Ventures said this week it's buying 35 producing wells and additional well locations in Wyoming County from Warren Resources for $105 million.
 
Depending upon natural gas prices, Kalnin could pay an additional $7 million, the Denver Business Journal reported. Kalnin controls more than 55,000 acres in the dry-gas Marcellus.
 
"We continue to consolidate and expand our working interests in this region, as we believe in the long-term outlook for gas, especially in the conjunction with growth in renewables,” said Christopher Kalnin, managing director and co-founder of Kalnin Ventures, in a statement.
 
Kalnin's investor in the deal again is its sole investor, Banpu Pcl, a Thailand-based coal mining/power generation company, Kallanish Energy finds.
 
Kalnin said it's spent $522 million on wells in Northeast Pennsylvania in the past 2-1/2 years.
 
Rather than chase growth, Kalnin’s BKV Oil and Gas Capital Partners fund seeks deals cheap enough to get cash back even as well output dwindles and gas prices remain below their 10-year average.
 
“People are still pretty skeptical on gas,” Kalnin said in an interview with Bloomberg in November. “That’s good. We want them to be skeptical.
 
“It’s not a bet on development,” Kalnin told Bloomberg. “It’s a bet on wells that are producing today. The return is lower. That’s OK -- I’m taking less risk. This is something the industry has forgotten.”
 
In October, Kalnin did its biggest Marcellus deal to-date, spending $210 million for wells and leases from Carrizo Oil & Gas and India’s Reliance Industries Ltd.
 
First Vessel Headed to Cove Point.  The first liquefied natural gas vessel was headed Thursday for Dominion Energy Inc.’s Cove Point LNG export facility in Maryland, a Reuter’s interactive map showed, with the facility expected to enter service by the end of the year. Cove Point will be the second large LNG export terminal in the lower 48 U.S. states, after Cheniere Energy Inc.’s Sabine Pass terminal in Louisiana, which exported its first cargo in February 2016. The vessel, the Maran Gas Delphi, which is currently entering the Chesapeake Bay, is expected to arrive at the $4 billion terminal later Thursday. It can hold about 3.3 billion cubic feet (bcf) natural gas. One bcf is enough fuel for about 5 million U.S. homes. With Sabine Pass, Cove Point and a couple of other export terminals under construction, the United States is expected to have the third-biggest LNG export capacity in the world by the end of 2018.
 
Bakken Oil Potential to Be Reevaluated by the Feds.  Federal geologists agreed Monday to reevaluate the amount of recoverable crude oil in North Dakota, U.S. Senator John Hoeven said. Hoeven and industry officials requested the new assessment by the U.S. Geological Survey, saying it would likely attract investment by showing stronger production potential. Industry officials and Hoeven want the USGS to take into account 17 other formations in western North Dakota's oil patch that could be exploited using technology developed for the Bakken and the Three Forks directly beneath it. Ron Ness, president of the North Dakota Petroleum Council, which represents nearly 500 energy companies working in the state, said the new assessment should "provide a much clearer picture of the resources we have in North Dakota." Sen. Heidi Heitkamp echoed that, calling news of the survey "encouraging." In 2013, the USGS released data that showed 7.4 billion barrels of oil could be recovered from the Bakken and Three Forks spanning parts of North Dakota and parts of Montana, nearly double the amount the agency previously estimated for the region in 2008. The USGS's study last year found Wolfcamp shale, located in the Midland Basin portion of Texas' Permian Basin, contains 20 billion barrels of recoverable oil.
 
PDC Energy Bullish on 2018.  PDC Energy expects to see its overall production grow by about 25% in 2018 from 2017, to between 38 million and 42 million barrels of oil-equivalent, Kallanish Energy reports.
 
Oil production is likely to account for 42% of that production and represent a 30% increase from 2017, the Denver-based company said.
 
PDC expects its 2018 production exit rate to be more than 120,000 barrels of oil-equivalent per day (BOE/d). PDC is anticipating that year-over-year production will increase by 80% in the Delaware Basin in West Texas.
 
It announced it intends to spend between $850 million and $920 million in its 2018 capital budget, with an expected outspend of roughly $130 million, utilizing a $50 oil and $3 gas price deck.
 
The company said it's planning to spud 153 operated wells in 2018, and to turn on line 161 operated wells in Texas and Colorado.
 
PDC intends to have three drilling rigs and one completion crew working in 2018 in both the Delaware and Wattenberg plays.
 
Said president and CEO Bart Brookman, in a statement: “Overall, our plan is focused on our most productive projects and the ongoing pursuit of technical innovations. We are excited that our 2018 operating plan projects to provide us with the opportunity to grow production volumes by 20 to 30%, while simultaneously strengthening the company's balance sheet.”
 
PDC also said it expects to close on the sale of its Utica Shale assets in Ohio in early 2018.
 
The company said intends to invest $480 million in the Wattenberg Field, of which approximately $425 million is expected to be invested in operated drilling and completion activity.
 
In 2018, PDC plans to spud and turn-in-line (to sales) roughly 131 and 139 operated wells, respectively.
 
Activity in 2018 is expected to be primarily focused in the company's Kersey area in Colorado's DJ Basin, with roughly 60% of 2018 TILs anticipated to be mid- or extended-reach lateral wells.
 
In the Delaware Basin, the company plans to invest approximately $395 million, of which roughly $275 million is expected to be dedicated to operate drilling and completions investments.
 
Record U.S. Oil Exports in 2017.  The world’s largest oil consumer exported more hydrocarbons than ever before in 2017 and shows no signs of slowing down. You name it -- crude oil, gasoline, diesel, propane and even liquefied natural gas -- all were shipped abroad at a record pace. While the surge comes many years after the shale boom started, it can be traced straight back to the growth of horizontal drilling and fracking. U.S. exports are poised to expand even further, as the fear of peak oil supply has all but vanished. Americans are expected to end the year pumping oil out of the ground at rates unseen since the early 1970s. More and more of it is going overseas, giving OPEC a headache as the group restrains its own output. 
 
CO2 Emissions Down 2005 – 2015. Between 2005 and 2015, energy-related carbon dioxide (CO2) emissions decreased in 43 states (including the District of Columbia) and increased in eight states, the Energy Information Administration reports.
 
On a per capita basis, energy-related CO2 emissions decreased in 49 states (including Washington, D.C.) and increased in two states (Louisiana and Nebraska) between 2005 and 2015.
 
EIA’s analysis measures emissions released at the location where fossil fuels are consumed. When fuels are used in one state to generate electricity that is consumed in another state, for example, emissions are attributed to the state where the generation occurs.
 
The 10 states with the highest total energy-related CO2 emissions in 2015 accounted for half of the U.S. total, Kallanish Energy understands. These 10 states also have large populations and account for slightly more than half (51%) of the nation’s total population.
 
California was the second-highest emitter in absolute terms (364 million metric tons of carbon dioxide, or MMBtu CO2), behind Texas (626 MMBtu CO2).
 
California was also the third-lowest emitter on a per capita basis, behind the District of Columbia and New York, EIA found. Two states with relatively small populations, Wyoming and North Dakota, had much higher levels of per capita emissions — nearly seven and five times the national average, respectively — because both states are large energy producers and, therefore, emit CO2 related to the production of coal, oil, and natural gas.
 
Energy-related CO2 emissions are the result of coal, petroleum, and natural gas consumed within a state to produce electricity (36% of U.S. total power), to transport goods or people (35%), to operate industrial processes (18%), or to directly fuel equipment in residential and commercial buildings (11%).
 
The consumption levels by fuel and by sector vary considerably by state. For example, in 2015, coal consumption accounted for 75% of energy-related CO2 emissions in West Virginia, although, in California, coal only accounted for 1% of emissions.
 
Frack Sand Deal.  Fairmount Santrol, an Ohio-based sand producer that sells sand as a proppant for use in Utica and Marcellus Shale drilling, announced yesterday it has accepted an offer to sell itself to another sand company–Unimin, a subsidiary of Belgium-based SCR-Sibelco. Fairmount Santrol shareholders will get a $170 million payment and 35% ownership in the newly combined company. The new company will have revenues approaching $2 billion per year. Fairmount Santrol’s CEO, Jenniffer Deckard, is expected to become the CEO of the new company (the name of the new company has not yet been decided). However, make no mistake–Fairmount is selling itself. The board of directors for the new company will have 6 members picked by Unimim parent SCR-Sibelco and 4 members picked by Fairmount Santrol. The location of the headquarters is still up in the air. A lot of unknowns at this point. However, one thing that IS known is that this is a done deal…
 
Delay in Federal Rule on Methane.  The Trump administration is delaying implementation of a federal rule to limit methane leaks caused by drilling, on federal lands, but it may be attempting to kill the Obama-era regulation, Kallanish Energy reports.
 
The Bureau of Land Management, in a Friday notice in the Federal Register, said the agency “has concerns regarding the statutory authority, cost, complexity, feasibility and other implications” of the 2016 Venting and Flaring Rule.
 
It announced its delaying implementation of the Waste Prevention Rule to Jan. 17, 2019, and suspending rule provisions already in effect.
 

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PA Permits December 7, 2017 to December 14, 2017

           County                                   Township                                          E&P Companies

  1. Lycoming                                   Cogan House                                   Alta Resource
  2. Lycoming                                   Cogan House                                   Alta Resources
  3. Susquehanna                            Bridgewater                                       SWN
  4. Susquehanna                            New Milford                                       SWN
  5. Susquehanna                            New Milford                                       SWN
  6. Washington                                Fallowfield                                        EQT
  7. Washington                                Fallowfield                                        EQT
  8. Washington                                Fallowfield                                        EQT
  9. Washington                                Fallowfield                                        EQT
  10. Washington                                Fallowfield                                        EQT
  11. Washington                                Fallowfield                                        EQT
  12. Washington                                Smith                                                Range
  13. Washington                                Smith                                                Range
  14. Washington                                Smith                                                Range
  15. Washington                                Smith                                                Range
  16. Wyoming                                    Meshoppen                                      Chesapeake
  17. Wyoming                                     Meshoppen                                       Chesapeake

OH Permits for week December 9, 2017

           County                                       Township                                          E&P Companies

  1. Belmont                                       Smith                                                 Gulfport
  2. Belmont                                       Smith                                                 Gulfport
  3. Harrison                                       Archer                                               Chesapeake
  4. Harrison                                       Archer                                               Chesapeake
  5. Harrison                                       Archer                                               Chesapeake
  6. Jefferson                                     Cross Creek                                       Ascent
  7. Monroe                                        Ohio                                                   Statoil
  8. Monroe                                        Ohio                                                   Statoil
  9. Monroe                                        Ohio                                                   Statoil

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

Midstream PA