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NewsLetters

Expo/Industry events for the next few months

 

Utica Midstream
April 4, 2018
Walsh University
North Canton, OH||
www.uticasummit.com

 

The New Upstream PA 2018
May 17, 2018
Penn Stater Conference Center
State College, PA
www.upstreampa.com

 

Appalachian Storage Hub Conference
June 7, 2018
Hilon Garden Inn, Southpointe
Canonsburg, PA
https://www.appastorage.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

 

 

Anti-fracking Environmentalist Colluding with the Russians.  Anyone who has been involved in the oil and gas industry since fracking became more widely used in developing oil and gas in the U.S. knows the Russians have spent millions of dollars throughout the world to stop fracking.  Russians did so by supporting groups and organizations that are against fracking.  Why?  Because America’s success in drilling for oil and gas significantly impacts the price of oil globally and prevents the Russians from charging exorbitant rates oil and NatGas to its customers throughout the world, especially in Eastern Europe (and in the New England states).

Guess what?  The collusion is working.  Aren’t power companies in Massachusetts paying the highest price for NatGas in the world from Russian.  The Boston Globe editorialized a couple weeks ago the danger that the anti-fracking environmentalist have on well-being of families and businesses in New England.

The paragraph below is an article from Energy in Depth published Thursday, March1 which reports  the latest findings by a congressional committee on Russian efforts to stop development of oil and gas in the U.S. 

U.S. House Science, Space, and Technology Committee Chairman Lamar Smith (R-Texas) today released a staff report uncovering Russia’s extensive efforts to influence U.S. energy markets through divisive and inflammatory posts on social media platforms. The report details Russia’s motives in interfering with U.S. energy markets and influencing domestic energy policy and its manipulation of Americans via social media propaganda. The report includes examples of Russian-propagated social media posts. The Internet Research Agency (IRA, the Kremlin’s online trolling organization) targeted pipelines, fossil fuels, climate change and other divisive issues to influence public policy in the U.S.

Now even the NY Times and Washington Post are reporting on the Russians attempting to disrupt the energy industry in the U.S.

The anti-fracking environmentalists are colluding with the Russians.  You are naïve to think they are not.

Cabot’s Drilling Plans for 2018.   Cabot expects to average three rigs and two completion crews in the Marcellus shale during 2018, resulting in 85 net wells drilled and 95 net wells completed.

“Cube Development” New Fracking Approach.  Shale drillers have squeezed more oil out of a given well over the past few years by becoming more efficient in their drilling operations. But the industry is still scaling up, and shale executives are now throwing around buzzwords such as “cube development” and “supersizing,” referring to the massive footprint of today’s well pads.

In the past, shale companies figured out a way to cut costs while expanding production: drilling more wells on a single well pad. In essence, that lowered the average cost of a shale well, allowing drillers to do more with less. Other techniques were also scaled up, such as using more frac sand, more water, and drilling longer laterals. That allowed shale firms to survive during the downturn, and it has also led to surging production that is breaking new records with each passing week. But the process continues, and shale companies are using that same logic today to continue to scale up. For instance, as Bloomberg reports, Encana is pursuing a drilling approach called “cube development,” in which the company drills about 20 wells from a single well pad, extending in every direction, with the aim of extracting oil and gas from the multiple layers of the Permian, rather than each well targeting an individual shale layer.

U.S. to Overtake Russia, Again.  The United States will overtake Russia as the world’s biggest oil producer by 2019 at the latest, the International Energy Agency (IEA) said on Tuesday, as the country’s shale oil boom continues to upend global markets.

Shell – LNG Shortage Coming.  More than $200 billion of investment in liquefied natural gas is needed to meet a projected boom in demand by 2030, Royal Dutch Shell said Monday.

LNG demand worldwide grew by 29 million metric tons, to 293 million metric tons in 2017, according to Shell’s Second Annual LNG Outlook. The annual demand is projected to reach 500 million metric tons by 2030, according to Shell.

Based on current demand projections, Shell, the world’s biggest LNG trader, sees potential for a supply shortage developing in the mid-2020s -- unless new LNG production project commitments are made soon.

A decline in spending in the sector since 2014 as a result of the plunge in energy prices will create a supply gap beginning in the mid-2020s -- unless new investments move forward, Shell said in its Outlook, Kallanish Energy finds.

While LNG demand is expected to grow from 293 million tons in 2017, to roughly 500 million tons by 2030, supplies are seen slipping to 300 million tons due to a lack of new projects and natural declines in existing production, Shell’s director of Integrated Gas and New Energies, Maarten Wetselaar, said.

The cost of developing the required capacity is roughly $1 billion per million metric tons, according to Wetselaar. That does not include investments in the development of the gas fields associated with LNG plants, he said.

“The industry is still looking at quite a challenge to build supplies to meet demand in the 2020s,” he said.

Competition is tough as projects have to compete against the lowest-cost gas hubs such as North America, where the shale boom has led to abundant and cheap supplies, as well as Qatar, Russia and East Africa.

“In order to take a final investment decision on a project of this size you want to make sure it is as low-cost as it can be because the cost of an LNG project ... is going to stick with you for 30, 40 years,” Wetselaar said.

Japan remained the world’s largest LNG importer in 2017, while China moved into second place, as Chinese imports surged past South Korea’s. Total demand for LNG in China reached 38 million tons, a result of continued economic growth and policies to reduce local air pollution through coal-to-gas switching.

Gulfport’s Annual Report.  Utica Shale production boosted Gulfport Energy's fourth quarter and full-year 2017 financial returns, Kallanish Energy reports.

Utica Shale production grew by about 30% from 2016 to 2017. Full-year production grew from 719.8 million cubic feet-equivalent per day (MMcfe/d) in 2016, to 1.09 billion cubic feet-equivalent per day (Bcfe/d), a 51.3% increase.

Production jumped from Q4 2016’s 786.9 MMcfe/d, to 1.26 Bcfe/d in 2017's final quarter. That production was 89% natural gas, 7% natural gas liquids and 4% oil, according to the Oklahoma-based company.

“2017 was a pivotal year for Gulfport as our Utica asset provided reliable, repeatable growth throughout the year” as the company also started developing its SCOOP assets in Oklahoma, said president and CEO Michael Moore, in a statement.

“We believe our 2017 development activities have enabled us to reach a size and scale, both financially and operationally, that allows us to navigate the current commodity price environment and align our business model to deliver a strong rate of growth within cash flow for 2018,” he said.

Gulfport reported fourth-quarter net profit of $156.5 million, compared to a net loss of $240.3 million in Q4 2016.

For full-year 2017, the company reported net income of 435.2 million, a substantial improvement from a $979.7 million net loss in 2016.

Most of Gulfport’s production came from its Utica Shale wells, which averaged 910.2 MMcfe of natural gas -- up 30% from 2016.

The company said it expects to spend between $770 million and $835 million on its 2018 capital budget.

The company drilled 94 Utica wells last year and plans to drill roughly 40 Utica wells in 2018. Gulfport is operating three horizontal rigs in the Utica, but plans to reduce that to two rigs in March.

The company is forecasting average daily production in 2018 of between 1.25 Bcfe and 1.3 Bcfe, up 15% to 19% over 2017’s average production of 1.09 Bcfe.

Gulfport reported proved reserves grew by 132%, from 2.3 trillion cubic feet-equivalent (Tcfe) at year-end 2016, to 5.4 Tcfe at year-end 2017.

Gulfport has 282 producing wells in Ohio’s Utica Shale, according to state regulators.

Range Refocuses on the Appalachian Basin.  US natural gas producer Range Resources sees future growth in the Appalachian Basin to serve LNG export demand even as it scales back output in the Terryville field in northern Louisiana because of disappointing results there, executives said Wednesday during an investor conference call.

The outlook, shared during a call with analysts to discuss fourth-quarter 2017 financial results, highlights efforts by shale producers to increasingly focus on core assets, while shedding or reducing investment in operations that aren't hitting targets for returns.

In Range's case, executives said that in addition to cutting the number of rigs it uses this year in the Terryville to one from the four it averaged last year, it also is in the process of identifying further assets to sell in the Midcontinent region and in northeast Pennsylvania, on top of the $70 million in sales last year. Its production focus will be on southwest Pennsylvania and the Marcellus, where it will devote 85% of its capital in 2018.

"The Marcellus has continued to surprise us to the upside," CEO Jeff Ventura said on the call.

Range has been betting that the pipeline buildout serving the resource-rich Marcellus in the US Northeast will trigger stronger financial returns in the years ahead, as growing midstream activity moves more gas, NGLs, and oil to domestic demand markets and for export. Range is among the shippers with commitments on Energy Transfer Partners' 3.25 Bcf/d Rover gas pipeline, which is designed to boost takeaway capacity from the Northeast to serve demand markets in the Midwest and Southeast. The completion of the second phase of the project in the second quarter of this year is expected to give a boost to Range's results.

The startup of new LNG export facilities on the Atlantic and Gulf coasts also is seen as a creator of new demand that Range's production can serve.

"Specifically for Range, we believe our high quality inventory and transportation portfolio positions us well to access this future demand growth," Chief Operating Officer Ray Walker said during the call.

Mariner East 2 Completion Date Set.  After resuming drilling and digging, Sunoco Pipeline announced that it expects the Mariner East 2 pipeline to be transporting highly volatile liquids by the end of June 2018 – just four months away.

Despite seeing construction on the $2.5 billion project shut down for more than month across the state by the Department of Environmental Protection for repeated violations, including the fouling of more than 30 West Whiteland Township residential water wells, Sunoco expects to meet the target date they first set three months ago.

When completed, Mariner East 2 is expected to transport hundreds of thousands of barrels of ethane, butane and propane from the state Marcellus Shale region’s on a 350-mile jaunt across the full width of the state to a storage complex being constructed at the company’s former refinery site in Marcus Hook.

The controversial project has been dogged by problems during construction and persistent opposition by community residents who oppose the routing of the pipeline through densely populated neighborhoods and within a few hundred yards of elementary schools. Citizens and some elected officials continue to press the state and local government entities to perform a risk assessment study on the project.

Most of the work on Mariner East 2 has been completed. With one 1930s-era pipeline (Mariner East 1) already functioning, a third pipeline in most of the same right of way is expected to be completed by mid-2019.

Jeff Shields, Sunoco Pipeline communications manager released the following statement on Tuesday: “We are dedicated to completing the Mariner East pipeline safely and according to the detailed terms of our updated environmental permits. Thousands of working men and women in the Delaware Valley have helped us get to this point, and with 94 percent of mainline construction complete and 83 percent of drills completed or underway, we look forward to our region experiencing the full economic benefit of this project. We expect Mariner East 2 to be in service by the end of the second quarter.”

Plans call for the Sunoco Mariner East 2 pipeline to zig-zag 350 miles from the Marcellus shale deposits in West Virginia, Ohio and western Pennsylvania to the former Sunoco Refinery in Marcus Hook, Delaware County. It would carry ethane, butane and propane and pass through high-density areas and within less than 100 feet from several schools, churches and senior care centers.

State Sen. Andy Dinniman, D-19, issued a release last week that questions the stability of planned for pipeline sites.

“Karst formations are prone to developing sinkholes and other geologic problems,” Dinniman said. “Sunoco knows this, the Pennsylvania Department of Environmental Protection knows this, and we know this. In fact, PennDOT has even been dealing with issues related to karst beneath our roads for decades.”

Karst is a geologic term for an area that sits in part on limestone that has been eroded by flowing water, producing sinkholes, caves, and fissures. This makes drilling risky due to gaps, ridges, and channels in the limestone.

George Alexander, spokesperson for Del-Chesco United for Pipeline Safety, released the following statement on Tuesday:

“To placate its nervous investors and customers, Sunoco has predicted one unattainable deadline after another in the course of constructing its property value-killing export pipeline. This latest deadline is no different. Because Gov. Wolf appears to have coordinated Sunoco’s permit suspension for a time when little or no work was planned anyway, it’s not surprising that Sunoco claims the suspension didn’t change its schedule. But, as the latest round of error-filled permit submissions shows, Sunoco will be damaging water supplies and causing economic devastation across southeast Pennsylvania through Election Day and beyond.”

TX December Production Numbers.  The Railroad Commission of Texas reported December 2017 production of 78.09 million barrels (MMBbl) of crude oil and 514.50 billion cubic feet (Bcf) of natural gas, Kallanish Energy reports.

The preliminary figures are based on production reported by operators and will be updated as late and corrected production data is filed, the state agency said.

Initial production reported in December 2016 was 74. 25 MMBbl of crude, updated to the current figure of 86.26 MMBbl, and 566.77 Bcf of natural gas, updated to the current figure of 652.36 Bcf.

For all of 2017, total Texas reported production of 1.03 billion barrels (BBbl) of crude and 7.6 trillion cubic feet (Tcf) of gas.

In preliminary December 2017 data, crude oil production averaged 2.52 million barrels per day (MMBPD), compared to 2.40 MMBPD in December 2016.

Natural gas production in December 2017 averaged 16.60 Bcf/d, compared to 18.28 Bcf/d in December 2016. Texas production in December 2017 came from 180,860 oil wells and 92,289 gas wells.

The top five counties for oil production in December 2017: Midland with 7.7 MMBbl, followed by Karnes, Reeves, Upton and Martin counties.

The Top five counties for natural gas production were Webb with 35.85 Bcf, followed by Tarrant, Reeves, Midland and Karnes.

The Top five counties for condensate production were Culberson with 1.03 MMBbl, followed by De Witt, Karnes, Reeves and Webb.

TX Oil & Gas Paid $11 Billion.  The Texas Oil and Gas Association this week released data on how much the industry paid in state royalties and state and local taxes in 2017. The estimated $11 billion paid in 2017 represented a substantial increase over the $9.4 billion paid in 2016, according to a press release from the association. About $3.1 billion was paid in property taxes, including $1.1 billion to Texas school districts. Texas counties received about $336 million in property taxes from mineral interests.

NatGas to Remain #1 in the Industrial Sector.  The U.S. Energy Information Administration projects a 40% increase in natural gas consumed in the U.S. industrial sector, jumping from 9.8 quadrillion British thermal units (Btu) (9.8 trillion cubic feet, Tcf) in 2017, to 13.7 quadrillion Btu (13.7 Tcf) in 2050.

“The U.S. industrial sector consumes more natural gas than any other sector, surpassing electric power in 2017, and the combined residential and commercial sectors in 2010,” EIA reported.

In 2017, roughly 66% of total industrial natural gas consumption was consumed for heat or power applications — either for industrial processes, such as in furnaces, or for onsite power generation.

Several industries, including bulk chemicals, food, glass, and metal-based durables used natural gas for 40% or more of their heat or power applications last year. EIA expects these industries will continue to use roughly the same proportion of natural gas for heat or power applications through 2050 because of the cost associated with fuel switching.

Eclipse Resources 4th Qtr. and Full Year Update.  Pennsylvania-based Eclipse Resources reported a fourth quarter 2017 net loss of $13.1 million, compared to a net loss of $62.1 million in Q4 2016.

For full-year 2017, the company reported net income of $8.5 million, Kallanish Energy has learned. That compares to a net loss of $206.2 million in 2016.

“During 2017, Eclipse Resources had substantial operational and strategic success, leading to an expansion in our asset base, a substantial increase in cash flow and the addition of a strategic joint-venture partner,” said chairman, president and CEO Benjamin Hulburt, in a statement.

The company increased its acreage footprint by 57%, generated 85% year-over-year growth in EBITDAX (earnings before interest, taxes, depreciation, amortization and exploration expenses), to a company record $189 million, and commenced a $290 million JV program, he said.

The company is planning to focus near-term development on its liquids-rich plays.

In 2018, the company plans to turn to sales 13 gross (nine net) Utica condensate wells, with an average lateral length of 16,325 feet. That will boost oil production growth by more than 40% from 2017 to 2018, it said.

The first well is producing 2,000 barrels of oil-equivalent per day (BOE/d) with 60% in liquids, Hulburt said. That is expected to grow by 15% to 20% in coming weeks.

Average net daily production in 2017 averaged 310.7 million cubic feet-equivalent per day (MMcfe/d), consisting of 77% natural gas and 23% liquids, the company said. That compares to 228.6 MMcfe/d in 2016.

In Q4 2017, average net daily production was 311.7 MMcfe/d. That compares to 255.3 MMcfe/d in the year-ago quarter.

The company spent $314.1 million in 2017, including $246.4 million for drilling and completions and $55.9 million on land-related expenses.

It spud 29 gross (21.6 net) wells in the Utica and Marcellus Shale plays, completed drilling 24 gross (21.3 net) wells and turned to sales 24 gross (22.2 net) wells.

In 2018, Eclipse plans to drill 33 gross wells with an average lateral length of roughly 16,800 feet. Of that total, 73% will be so-called Super Laterals, exceeding 15,000 feet in length, Eclipse said. That represents a 24% increase in lateral lengths from 2017.

It expects production in 2018 to grow from 335 Mmcfe/d, to 355 MMcfe/d.

 

PA Permits February 22, to March 1, 2018

 

             County                                       Township                                          E&P Companies

  1. Bradford                                       Tuscarora                                          Chesapeake
  2. Butler                                           Connoquenessing                              Rex
  3. Butler                                           Connoquenessing                              Rex
  4. Elk                                                Jones                                                 Seneca
  5. Elk                                                Jones                                                 Seneca
  6. Elk                                                Jones                                                 Seneca
  7. Fayette                                         German                                              Chevon
  8. Fayette                                         German                                              Chevron                   
  9. Fayette                                         Luzerne                                             Chevron
  10. Fayette                                         Luzerne                                             Chevron
  11. Fayette                                         Luzerne                                             Chevron
  12. Susquehanna                            Apolacon                                           Reposol
  13. Susquehanna                            Apolacon                                           Reposol
  14. Susquehanna                            Harford                                               Cabot
  15. Susquehanna                            Harford                                               Cabot
  16. Washington                                Amwell                                               Range

OH Permits for week ending February 24, 2018

             County                                     Township                                          E&P Companies

  1. Belmont                                       Goshen                                              Rice
  2. Belmont                                       Goshen                                              Rice
  3. Belmont                                       Goshen                                              Rice
  4. Belmont                                       Richland                                            Ascent
  5. Belmont                                       Flushing                                            Chesapeake
  6. Belmont                                       Flushing                                            Chesapeake
  7. Belmont                                       Flushing                                            Chesapeake
  8. Belmont                                       Richland                                            Ascent
  9. Belmont                                       Richland                                            Ascent

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

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