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Expo/Industry events for the next few months

Ohio Valley Regional Oil & Gas Expo
April 24-25, 2018
Belmont County Carnes Center
St. Clairsville, OH
http://ohiovalleyoilgasexpo.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
Hilton 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

Challenges in the Permian.  The oil field at the heart of the U.S. shale boom appears to be choking on its own growth, a surprising development with big ramifications for energy profits and global markets. The Permian basin of West Texas and New Mexico has been one of the few growth engines for oil production world-wide. The region’s output is on track to rival that of Iran or Iraq and has lifted American production to all-time highs. Output is projected to climb from three million barrels a day to more than four million barrels a day within two years. The International Energy Agency forecasts that last year’s production level will double by 2023. But Permian producers are starting to encounter congested pipelines and shortages of materials and workers—bottlenecks that have caused some investors to sour on the region. While production is expected to continue rising, the Permian’s stumbles could ripple out to the global oil market at a time when OPEC has curtailed output and many companies have cut back on megaprojects. That could become a source of volatility that propels oil prices elsewhere higher.

Schlumberger Projects Increase in Drilling Globally.  Schlumberger, the world’s largest listed oilfield services group, has said the oil market will face growing supply challenges over the coming year, following the steep drop in investment in recent years. Paal Kibsgaard, Schlumberger’s chief executive, said as the company reported first quarter earnings that three consecutive years of “dramatic underinvestment” in oil exploration and production worldwide had resulted in declining production in countries including Angola, Norway, Mexico, Malaysia, China, and Indonesia. He added that there were “production challenges” emerging in the US shale oil industry, including constraints on pipeline capacity and other infrastructure, and weaker production from wells drilled close together. “A significant increase in global E&P investment will be required to minimize the impending deficit,” he said.

Cabot Drilling Plans for Ashland County, OH.  Cabot Oil & Gas Corporation is proceeding with exploratory drilling plans to create wells for fracking in Ashland County. "We are moving forward with our first well in Ohio," John Smelko, manager of environmental and regulatory compliance for Cabot's North Region told Ashland County Commissioners Thursday. Smelko said the first well will be in Green Township, located about .8 miles from Ohio 511 on Township Road 2375. The company has already obtained permits from the Ohio Department of Natural Resources to construct a pad and a well in that location. "Our goal is to begin construction of the pad on Tuesday," Smelko said. "We expect to take somewhere around three weeks or so to build that pad, and then we intend to start with the drilling portion of the project." Smelko said the Texas-based oil and gas company will begin by drilling a vertical well to the depth of about 5,400 feet. From that vertical well, the company plans to begin horizontal drilling. The drilling process is expected to take about 30 days, he said.

NatGas Production to Increase by One Billion Cubic Feet.  Natural gas production from the seven most prolific plays in the Lower 48 U.S. states is projected to jump more than one billion cubic feet per day from April to May, according to the Energy Information Administration’s just-released Drilling Productivity Report (DPR).

Four of the seven plays are expected to record a triple-digit increase in gas production from April to May. The biggest jump is expected in Appalachia, which includes the Marcellus and Utica Shale plays. The DPR expects a 386 million cubic feet per day (MMcf/d) increase in production, to 27.71 billion cubic feet per day (Bcf/d) in May, from 27.32 Bcf/d in April. (All numbers are rounded.)

EIA projects Permian Basin natural gas production will jump 222 MMcf/d from April to May, to 10.27 Bcf/d, from 10.05 Bcf/d, Kallanish Energy finds. The Haynesville Shale play is expected to see a 208 MMcf/d increase in natural gas production from April to May, to 8.54 Bcf/d, from 8.33 Bcf/d.

The Eagle Ford Shale play will see a 117 MMcf/d month-to-month increase in gas production, to 6.67 Bcf/d, from 6.56 Bcf/d in April, the DPR projects.

The other three plays, including the Anadarko, Bakken and Niobrara, will see a combined 145 MMcf/d increase in gas production from April to May.

No Methane Migration in PA.  The Pennsylvania Dept. of Environmental Protection (DEP) released the results of its industry-leading program to monitor oil and gas wells for methane (and oil and brine) migration–that is, for anything would impact groundwater. The Mechanical Integrity Assessment Program, as it’s called, is “the most rigorous routine well integrity assessment program to protect groundwater in the United States,” requiring quarterly inspections by operators of their wells. The DEP is in the process of releasing the results of those reports for the past four years–from 2014-2017.

They’ve just released results for 2014-2017. What did the DEP find? 

“Less than 1 percent of operator observations indicated the types of integrity problems, such as gas outside surface casing that could allow gas to move beyond the well footprint.” In other words, there is virtually no methane migration happening from shale (and conventional) natural gas wells because of good well casings and regular checks. It is hard to overstate how important these findings are.

FERC to Review Its Pipeline Approvals Policy.  Federal Energy Regulatory Commission on Thursday began a review of its 1999 policy for approving pipeline projects.

The commission unanimously voted at its monthly public meeting to issue a draft notice of inquiry, starting a 60-day public comment period.

FERC Chairman Kevin McIntyre, a Republican, announced in December his intent to initiate a review of the pipeline policy, as the agency evaluates how to best manage the transport of bountiful shale natural gas to market, while balancing environmental and climate change concerns.

McIntyre said the Thursday action does not prejudge the outcome of the review, and he is open-minded to changes on how the committee evaluates the need for a project as well as landowner concerns.

"1999 was quite some time ago," McIntyre said. "Much has changed since that time. Good governance calls for considering whether policies currently in place remain effective and look for opportunities for improvements. By issuing a [notice of inquiry] we are posing questions. It should not be read as a forecast of policy direction or indication of any action the commission may take. It should not suggest the current statement has been ineffective or changes will be made. I have an open mind on these issues."

Pipeline opponents say FERC’s pipeline policy is outdated, created when climate change concerns were less dominant and the shale boom was unanticipated. They say FERC has become a “rubber stamp” for pipeline approvals because the policy statement encourages the committee to lean too heavily on economic considerations when making decisions.

A coalition of 11 environmental groups sent a letter to FERC before the meeting urging the commission to reform its natural gas pipeline review process with a "21st Century approach" that ensures "that above all else — the public interest is protected, which is consistent with FERC’s mandate under the Natural Gas Act."

Robert Powelson, a Republican FERC commissioner, said Thursday he will heed that advice, but he refuted the "misnomer" that the commission is too liberal with pipeline approvals.

"We are taking this opportunity to look back on a 1999 document and hopefully modernize it in the landscape we face today with ever increasing gas exploration and production," Powelson said, noting the "tectonic shift" where the U.S. recently became a net exporter of natural gas for the first time in 60 years. "Any time you take 20-year-old doctrine and review it, you usually get a 2.0 version of that doctrine and it's in the public interest to do so."

Currently, FERC makes decisions about pipelines based mostly on the economic need for the project, and whether developers have secured contracts with companies that want to use the pipeline to ship fuel. They are known as precedent agreements.

FERC Commissioner Cheryl LaFleur, a Democrat, has said the agency has focused too “narrowly” on the existence of precedent agreements.

LaFleur said the commission should consider the “specific end use of the delivered gas within the context of regional needs,” meaning whether consumers in a given area really need more energy to be served by a new pipeline, and if pipelines already exist nearby.

The pipeline review will evaluate the effectiveness of depending on precedent agreements.

Commissioners said Thursday they will assess whether FERC is properly weighing the impact of greenhouse gas emissions released by the products shipped through pipelines.

Last year, a group of environmental groups led by the Sierra Club successfully sued FERC to force the agency to examine the effects of pipelines on climate change. Until the ruling by the D.C. Circuit Court of Appeals, FERC had examined the environmental effects of physically building the pipeline, not the effects of using the fuel it transports.

Environmental groups have also pushed FERC to evaluate emissions occurring during the production process of the natural gas to be shipped.

FERC's pipeline policy review also will ask if grid resilience should be a factor the agency considers on whether to approve new natural gas projects.

This issue figures prominently in New England, a region that is heavily dependent on natural gas, accounting for about half of its power generation, as coal and nuclear plants have retired.

But New England struggles to import enough natural gas from areas that produce it, such as the Marcellus shale formation in the Appalachian states, especially during the winter because of a lack of sufficient pipelines.

Pipeline backers say the current policy works fine. If anything, they are angling for fewer hurdles to development, because they say the shale industry is already facing pipeline bottlenecks, such as in New England.

“The ability to expand and modify interstate natural gas pipelines under FERC’s existing policy has served the nation well," Don Santa, the president of the Interstate Natural Gas Association of America, said Thursday. "This pipeline infrastructure has facilitated the world's most competitive natural gas commodity market and has enabled American consumers and industry to benefit from our natural gas abundance."

Utica Shift in Drilling.  Continuous gains in Appalachia Ohio well productivity year-over-year have been a given over the past few years, but data from 2017 may start to show a shift in this trend. Ohio well-level production data is released quarterly, with 4Q17 published last month, meaning we now have a more complete picture of how productivity trended throughout 2017. The last half of 2017 was particularly interesting in the region, given several large takeaway pipeline projects became operational, namely Rover, CGT Rayne and several TETCO backhauls, so we anticipated highly productive dry gas wells would likely come online to help fill this capacity. Average IP rates for horizontal wells in Appalachia Ohio did increase year-over-year, up about 5% to average 11.6 MMcf/d in 2017. However, this growth is much less than previous years; average IP rates increased nearly 70% from 2015 to 2016. This slowdown in the rise in average IP rates is despite a continued increase in average lateral lengths, as seen in the figure below.

One factor contributing to this is the shift in drilling activity from wet to dry portions of the play, which significantly occurred starting in 2015 with the fall in liquids prices. BTU models well-level wellhead GPMs, and there has been a clear decrease in average GPM since 2015, as shown above. The large increase in the average IP rate from 2015 to 2016 was likely driven by the large shift to target dry portions of the play that occurred in that time frame. Average IP rates for dry wells are much higher than that for wet wells, and the relative percent of dry wells increased to over 60% in 2016 from 38% in 2015, as seen in the figure below. This continued to increase to 74% in 2017, though the big jump was from 2015 to 2016.

As oil prices and thus liquids prices remain strong, the wet portion of the play is becoming more economically attractive, meaning producers may start to move back into the wet regions. This would likely result in a decrease in the average IP rate for the region. How well productivity continues to trend is critical from a production forecasting standpoint, as lower overall average IP rates means that more wells will need to turn online to support a given production level. With over 7 bcf/d of new pipeline takeaway capacity still on the horizon from Southwest Appalachia over the next few years, how productive new wells are, coupled with the level of drilling activity, will determine how quickly production increases with this new capacity. To keep up to date on production trends in Appalachia as well as the rest of the US, check out the Upstream Outlook and the Northeast Gas Outlook.

Support Northeast Supply Enhancement Project.  The lack of pipeline capacity in the northeast has prevented consumers from fully realizing the advantages of affordable, reliable and clean Marcellus Shale natural gas. The Northeast Supply Enhancement project will help solve this problem by adding much needed pipeline capacity, providing domestically produced and environmentally responsible energy for up to 2.3 million homes and businesses while creating economic development for the regional economy.

Northeast Supply Enhancement will also:

o          Increases service to National Grid and its customers;

o          Provide reliable supply of economical natural gas;

o          Continue to help NYC meet its clean air goals;

o          Create jobs for local laborers;

o          Drive millions of dollars in new wages;

o          Has the potential to displace nearly 16 million tons of CO2 annually - the equivalent of removing 3 million passenger cars from the roadways - annually.

Add Your Name.

 http://action.northeastsupplyenhancement.com/ferc_comment_eis?recruiter_ID=26023

These benefits can only be realized if NESE continues to move forward, and for that to happen, WE NEED YOUR HELP. Click the button below to support this critical project. 

Now is the time to tell the Federal Energy Regulatory Commission (FERC) that you support NESE. This critical piece of energy infrastructure will increase pipeline capacity and connect abundant, reliable, affordable and clean Marcellus natural gas with markets that desperately need it. You can also share your support by attending and providing comment at a FERC public hearing. Click below to get more details on the hearings:

o          Wednesday, April 25 - Old Bridge, NJ

o          Thursday, April 26 - Brooklyn, NY

o          Wednesday, May 2 - Somerset, NJ

o          Thursday, May 3 - Quarryville, PA

Take action to support this key piece of energy infrastructure; with your help, we can realize the benefits of NESE.

Anti’s Are Becoming Terrorists.  Approximately 640 pounds of dynamite and 400 blasting caps were stolen from a locked trailer at a construction site for the Atlantic Sunrise Pipeline in Marietta (Lancaster County), PA this past weekend. Because the theft involved explosives, the federal Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) has been called in to investigate. The ATF is offering a $10,000 reward for information that leads to an arrest and conviction. We sincerely hope the perp(s) are caught and go to jail–for a long time. If you know anything, call the ATF hotline at 888-ATF-BOMB (888-283-2662). Not sure who thought up that phone number for the ATF, but it’s certainly memorable!

NatGas Storage Lowest Levels Since 2013-2014.   Working natural gas in storage in the U.S. at March 31, the end of the 2017–2018 heating season, totaled 1.35 trillion cubic feet (Tcf) – the lowest level for U.S. working gas stocks at this time of year since 2014, and the second-lowest volume in 10 years, the Energy Information Administration reports.

Working gas stocks were much lower at the end of the 2013-2014 heating season, at 837 billion cubic feet (Bcf), and were 18.6% higher at the conclusion of the 2008-2009 heating season, at 1.66 Tcf.

“The 2017–2018 heating season, which began on Nov. 1, 2017, was characterized by periods of colder-than-normal temperatures that resulted in substantial withdrawals of natural gas from storage, including an all-time weekly record-breaking withdrawal of 359 Bcf in January,” EIA reported.

Natural gas is used during colder months not only for heating homes and businesses directly, but also for fueling natural gas power plants, which are increasingly used to meet winter electricity demand.

As a result of the colder-than-normal winter, net withdrawals from storage during the 2017–2018 heating season totaled 2.43 Tcf, the second-highest withdrawals on record, behind only the roughly 3 Tcf net withdrawals reported for the much colder-than-normal 2013–2014 winter.

This summer, EIA expects injections into storage to be higher than normal, exceeding the average of the previous five injection seasons (April through October), Kallanish Energy reports.

EIA forecasts working gas levels will total 3.77 Tcf at the end of October 2018, requiring net injections of roughly 2.42 Tcf over the injection season, the equivalent of 11.3 Bcf per day (Bcf/d).

Net injections of this magnitude are made possible by increases in U.S. natural gas production. EIA forecasts dry natural gas production will average 81.6 Bcf/d during the 2018 refill season — an increase of 8.3 Bcf/d, or 11% over last year’s rate — which more than offsets forecast increases in natural gas consumption, exports, and storage refilling requirements.

Rover Seeks More Approvals from FERC.  Rover Pipeline is seeking federal approval to begin service on additional segments of the $4.2 billion natural gas pipeline across northern Ohio, Kallanish Energy reports.

The request was filed Friday with the Federal Energy Regulatory Commission.

Energy Transfer Partners is seeking approval to begin service on its 100-mile Market segment in northwest Ohio and Michigan, plus a major segment of Mainline B between Crawford and Wayne counties in northcentral Ohio.

The Market segment is a 42-inch pipeline from Defiance County, Ohio, to Livingston County, Michigan, where it connects to the Vector Pipeline.

The company also wants to begin service from two compressor stations in Crawford and Defiance counties in Ohio and one meter station in Michigan.

It asked for FERC approval before April 25.

Much of Mainline A is already in service and the pipeline is moving Utica and Marcellus natural gas from Ohio, West Virginia and western Pennsylvania to markets in the Midwest, Ontario and the Gulf Coast, while work is continuing on Mainline B and some laterals.

The company says 99% of the pipeline is complete and 83% of horizontal directional drilling (HDD) under streams and highways is done. HDD is required at 49 sites.

It has encountered problems going under the Tuscarawas River in Ohio and drilling was halted for a time by FERC. The Ohio Environmental Protection Agency also got involved over spills to waterways. West Virginia has also halted pipeline work because of local problems.

The 713-mile twin pipeline will move up to 3.25 billion cubic feet per day.

Shale Insight Oct 23-25, 2018.   The Shale Insight Conference, which has attracted the likes of Donald Trump and Sean Spicer, will return to Pittsburgh on Oct. 23-25.

The organizers -- the Marcellus Shale Coalition, Ohio Oil and Gas Association and West Virginia Oil and Natural Gas Association -- have not yet announced a keynote speaker but said that registration is now open.

The event will be held at the David L. Lawrence Convention Center.

Congratulations to Shawn Bennett.  We wish you continued success!!  A longtime lobbyist for Ohio's coal, oil and gas sector has been tapped for a top slot within the Energy Department's Office of Fossil Energy. DOE yesterday announced that Shawn Bennett, a former lobbyist for the Ohio Coal Association and the Ohio Oil and Gas Association, was named deputy assistant secretary for oil and natural gas in the DOE office. Bennett will be one of four deputy assistant secretaries reporting to Steven Winberg, the agency's assistant secretary for fossil energy. He will administer oil and gas programs, including research and development, analysis, and natural gas regulation. Bennett worked for the Ohio Oil and Gas Association for nearly four years, and was a registered lobbyist for the group from the fall of 2014 to Dec. 31, 2017, state records show. Most recently, he was the association's executive vice president.

WV Marcellus and Manufacturing Development Conference.  The highlights of the conference were:

  • DOE Steve Winberg, Assistant Secretary for Fossil Energy commented that FERC is reviewing it approval process for the first time in 20 years.  The goal is to quicken the approval process.
  • Winberg also stated that Secretary of Energy Perry thinks petrochemical centers outside of Texas are good for the country.
  • “Woody” Thrasher, Cabinet Secretary, West Virginia Department of Commerce stated that China Energy has visited West Virginia 15 times.
  • Thrasher also commented the Emir of Qatar has had meetings with Governor Justice to explore NatGas projects in West Virginia.
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PA Permits April 12, to April 19, 2018

            County                                   Township                                          E&P Companies

  1. Greene                                       Dunkard                                            Chevron
  2. Washington                                Donegal                                             Range
  3. Washington                                Donegal                                             Range

OH Permits for week ending April 14, 2018

             County                                          Township                                     E&P Companies

  1. Belmont                                       Washington                                      Gulfport
  2. Belmont                                       Washington                                      Gulfport’
  3. Jefferson                                     Smithfield                                          Ascent
  4. Jefferson                                     Mt. Pleasant                                      Ascent
  5. Jefferson                                     Mt. Pleasant                                      Ascent
  6. Jefferson                                     Mt. Pleasant                                      Ascent

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

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