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Expo/Industry events for the next few months

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

XTO Moving HQ to Houston.  Exxon Mobil Corp.’s Sara Ortwein has delivered some of the energy industry’s biggest engineering feats over a 38-year career. Her newest challenge: Winning in the nimble, fast-moving world of shale. Ortwein’s task is as much cultural as technical. Exxon had given the XTO shale unit she runs a long leash to free it from the parent company’s famously exhaustive planning process. Now she’s moving XTO’s headquarters to Exxon’s Houston hub to better blend the unit’s shale know-how with the oil giant’s technical and management expertise. Exxon was slow to the shale revolution that wildcatters began in 2005. By buying XTO in 2010, it served notice it had arrived. And Ortwein, who started at Exxon drilling wells in East Texas, was named to lead the unit in 2016. She’s one of just three women among the company’s top tier of 25 executives, in an industry long dominated by men. “It’s a different culture for a different part of the business than a big mega-project,” Ortwein said in an interview.

XTO Selling in the Utica.   ExxonMobil’s shale-drilling unit, XTO Energy, wants to sell roughly 9,400 Utica Shale acres, 98% held by production, in Ohio’s Monroe and Washington counties.

According to XTO’s website, the oil and gas producer currently owns 82,000 acres of Utica Shale leases in Belmont and Monroe counties, Kallanish Energy finds.

The 9,400-acre sale appears to be XTO selling off non-core acreage in areas that don’t fit the company’s future drilling plans.

According to the sale announcement appearing on Oil & Gas Asset Clearinghouse, there are potentially 40 drilling locations on the 9,400 acres. The acreage has dry gas potential. The sale is not exactly an auction, but it is timed and uses bids. XTO is accepting sealed bids on the property through May 17.

TX April Permitting. Texas’s energy regulator issued a third more oil and gas drilling permits in April than a year ago, according to data released on Thursday, as higher prices continue to spur an increase in activity. The Railroad Commission of Texas, which regulates the state’s oil and gas industry, issued 1,221 original drilling permits in April, up around 34 percent from last year. Oil prices have climbed to near $71 per barrel, the strongest level in nearly 3-1/2 years, aided by production cuts from the Organization of the Petroleum Exporting Countries (OPEC) and declining supplies from Venezuela. A fresh round of U.S. sanctions on Iran announced this week also is anticipated to take some supply out of the market, further supporting prices. Well completions in Texas also rose in April, with the regulator processing 616 oil completions, versus just 439 a year ago. The commission has processed 3,514 completions so far this year, an increase of 43 percent from the same time last year.

Bakken Shale “Back in the Money”  With breakthroughs in drilling technology reducing costs and crude oil prices near $70 a barrel, wells in North Dakota are turning into cash cows. The cost of getting oil and gas to the surface in North Dakota’s Bakken field has fallen, recently hitting $41 to $50 a barrel for the top-quartile wells in the region, according to a Bloomberg New Energy Finance report. Technologies like fracking and horizontal wells, reaching lengths never before seen, have led to big reductions in costs across shale basins in the U.S. This has helped most average wells in the Bakken become economical. If West Texas Intermediate oil prices stay above $63 a barrel, all average wells will be “in-the-money,” BNEF analyst Jacob Fericy said in the report. “The current upswing in prices we’ve seen, it’s really helped a lot of Bakken producers,” Fericy said by telephone. “The Bakken is definitely price-sensitive.’

Judge Kicks “Tree Sitters” out of the Trees.  Two women have come down from tree-top perches where they have been protesting a natural gas pipeline granted eminent domain to run through their property in Virginia. Sixty-one-year-old Theresa Ellen Terry and her adult daughter, Theresa Minor Terry, came down Saturday afternoon. A federal judge had given them until midnight to comply with her order giving Mountain Valley Pipeline developers access to a forced easement on their property. Had the women not complied, they faced arrest by U.S. Marshals. The Roanoke Times reports that Theresa Minor Terry rappelled down about 3:45 p.m. Saturday, and her mother climbed down a ladder about an hour later. Roanoke County authorities issued arrest warrants for the women last month, but did not try to remove them by force.

EPA to Address the Handling of Wastewater.  The U.S. Environmental Protection Agency is kicking off a new study that it says will provide a holistic look at how wastewater from the oil and gas industry is regulated, Kallanish Energy reports.

“I am pleased that this study will take into consideration the expertise of states and stakeholders in developing effective options and alternatives to better manage wastewater from the oil and gas sector,” said EPA Administrator Scott Pruitt, in a statement last week.

“It’s important the agency works cooperatively with local officials and energy providers to protect the environment and provide affordable, reliable energy to the American people,” he said.

The EPA said large volumes of wastewater are generated by the oil and gas industry, and projections show the volumes will only increase.

Currently, most of the wastewater is managed by disposing of it though a practice known as underground injection where the water can no longer be accessed or used, the EPA said.

It said some states and stakeholders are asking whether it makes sense to waste the water, particularly in water-scarce areas of the country, and what steps would be needed to treat and renew the water for reuse.

The EPA study will address questions such as how existing federal   approaches to produced water management under the Clean Water Act can interact more effectively with state regulations, requirements or policy needs, and whether any potential federal regulations that allow for broader discharge of treated produced water into surface waters are supported.

The EPA said it is just beginning its study. It will reach out to other parties for input in coming months.

After the study is completed, the agency will determine if future EPA actions are appropriate to further address oil and gas extraction wastewater.

Additional information is available at www.epa.gov/eg/study-oil-and-gas-extraction-wastewater-management

NatGas Continues to Be Leading Fuel.  The share of U.S. total utility-scale electricity generation from natural gas-fired power plants is projected to raise from 32% in 2017, to 34% in both 2018 and 2019, according to the just-released May STEO, the Energy Information Administration’s Short-Term Energy Outlook.

Forecast electricity generation from coal averages 29% in both 2018 and 2019, down from 30% in 2017. The nuclear share of generation was 20% in 2017, and is forecast to be 20% in 2018 and 19% in 2019, Kallanish Energy reports.

Non-hydropower renewables provided slightly less than 10% of electricity generation in 2017 and are expected to provide more than 10% in 2018 and nearly 11% in 2019.

The generation share of hydropower was 7% in 2017 and is forecast to fall slightly below that level both in 2018 and 2019, STEO projects.

EIA/STEO forecasts coal production to decline by 3%, to 751 million short tons (MMst) (a short ton is 2,000 pounds) this year. The production decrease is largely attributable to a forecast decline of 4% in domestic coal consumption in 2018, with most of the decline expected to be in the electric power sector.

A 9% forecast decline in coal exports also contributes to lower expected coal production in 2018. EIA expects coal production to remain nearly unchanged in 2019, at 752 MMst.

In 2017, EIA/STEO estimates wind generated an average of 697,000 megawatt-hours per day (MWh/d), and projects wind generation will rise to 741,000 MWh/d in 2018, and 766,000 MWh/d in 2019.
 
If factors such as precipitation and snowpack remain as forecast, conventional hydropower is forecast to generate 747,000 MWh/d in 2019, making it the first year wind generation will exceed hydropower generation in the U.S.

Shale NatGas Triples While Reducing Greenhouse Gas. The most recent EPA data shows that oil and gas methane emissions in the Appalachian Basin have fallen 26 percent since 2011 at the same time natural gas production in the region has more than quadrupled. EPA data also show oil and natural gas system methane emissions have declined 14 percent since 1990 at the same time natural gas production increased 50 percent. These are major reasons that data from the EPA and Global Carbon project show that U.S. oil and gas methane emissions account for just 1.4 percent of global methane emissions, even though fracking has allowed the U.S. to emerge as the world’s top oil and gas producer in recent years. All told, the shale boom has allowed the United States to triple the size of the economy at the same time we have significantly reduced greenhouse gas emissions. Ohio has enjoyed this environmental and economic win-win perhaps more than any other state, and Houston’s fear-mongering doesn’t change that fact.

Bottlenecks in the Permian.  Pipeline capacity in the Permian Basin is approaching maximum capacity. Even with the smart and creative use of crude by rail (CBR) or trucking logistics, we predict takeaway constraints will leave  billions of dollars of crude in the ground and shippers struggling with production over the next 16 months.

Thank you PLG Consulting for such a comprehensive look at the transportation issues in the Permian.

Read full whitepaper. 

https://gallery.mailchimp.com/a9634de550a95fc6bf9f25a02/files/40350f21-d3c4-494d-814b-f030eb8e0913/A_Problem_in_the_Permian.pdf?utm

Rover Moves Forward in WV, Struggles in OH.  The company behind the $4.2 billion Rover Pipeline has won approval from the West Virginia Department of Environmental Protection, but it is continuing to fight with the Ohio Environmental Protection Agency, Kallanish Energy reports.

On Tuesday, West Virginia said erosion control and sediment problems along two pipeline laterals have been corrected. The problems along the Sherwood Lateral and the CGT Lateral had caused West Virginia to halt pipeline construction on March 7.

The problems were in Doddridge, Tyler and Wetzel counties in northern West Virginia.

The company, Rover Pipeline, a subsidiary of Texas-based Energy Transfer Partners, had submitted a corrective plan on April 20, and it passed a May 2 state inspection, DEP said in a two-page letter.

The Ohio EPA and the company disagree on the source of low-level contamination found in drilling fluids used for horizontal directional drilling under the Tuscarawas River along the pipeline route.

The company said the contamination appears to have come from the Tuscarawas River or stream sediments.

The EPA disagreed with that contention and asked the Federal Energy Regulatory Commission in a Tuesday note to order a more sweeping analysis of the contamination. That includes looking at a disposal site used by the company, near Ashland, Ohio, and preparing a groundwater monitoring plan.

The EPA said the contamination has been detected at numerous pipeline drilling sites across northern Ohio in similar concentrations and that it appears the drilling fluids are being contaminated in other ways.

It wants the company to determine the cause and eliminate the problem. The contamination issue arose last February.

The 713-mile twin pipeline will carry natural gas from the Marcellus and Utica shales to the Midwest, Canada and the Gulf Coast. The pipeline will move up to 3.25 billion cubic feet per day. It is mostly complete with major sections in service.

New Permian Pipeline to Houston.  Energy Transfer Partners said its plans to build a crude pipeline from the Permian basin in Texas to the Houston Ship Channel and Nederland, Texas, which will have an initial capacity of up to 600,000 barrels per day (bbl/d).

The pipeline will be “easily expandable” to 1 million barrels per day, in order to serve growing export markets at coastal ports, the company said during a first quarter earnings conference call. It is likely to come online by 2020.

Surging crude output from the Permian basin, the biggest oil field in the U.S. and the source of most of the country’s shale crude, is straining the region’s infrastructure. Pipelines are running full, sending crude prices there to their weakest level against benchmark futures in three and a half years.

“The almost historical widening of that basis will certainly help our margins in the coming quarters,” Marshall McCrea, a senior ETP executive, said.

ETP also said volumes on its Permian Express 3 crude pipeline averaged about “a couple of hundred thousand” bbl/d in the first-quarter. The company said it would continue to evaluate further expansions for that pipeline.

Multi-Well Pad Drilling.  Multi-well pad drilling—when multiple wells are drilled from a single drill site—is allowing companies to produce oil more efficiently and at a significant cost savings, resulting in record production for shale oil producers. The market for multi-well pad drilling technology is expected to surpass US$180 billion by 2024, according to a report by Global Market Insights, as oil & gas sector companies look to more unconventional extraction methods to meet rising demand for energy resources. Analysts expect to see the most growth in the North American onshore market segment due to the large number of shale exploration and production projects. “U.S. producers are enjoying a second wave of growth so extraordinary that in 2018 their increase in liquids production could equal global demand growth,” the International Energy Agency (IEA) said in a February report.

Buckeye Pipelines Fighting Anti’s.  A coalition of conservation groups is seeking to intervene to challenge a proposed natural gas pipeline across southern Ohio, Kallanish Energy reports.

The request to the Federal Energy Regulatory Commission was filed by the Center for Biological Diversity.

That group and others are opposed to TransCanada’s proposed Buckeye Xpress Pipeline they contend would negatively impact the Wayne National Forest in southern Ohio.

The 66-mile pipeline would cross 336 streams and 135 acres of wetlands in the federal forest, they said in their filing with FERC.

The project is being developed by Buckeye subsidiary Columbia Gas Transmission.

To date, roughly 2,300 acres in the Wayne National Forest have been auctioned off to drillers by the U.S. Bureau of Land Management. Those lease sales began in 2016.

Conservation groups have sued the BLM and the U.S. Forest Service over the alleged failure to properly analyze the risks from horizontal drilling.

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PA Permits May 3, to May 10, 2018

           County                                       Township                                          E&P Companies

  1. Butler                                           Prospect Boro                                   XTO
  2. Butler                                           Prospect Boro                                   XTO
  3. Wyoming                                     Eaton                                                 SWN
  4. Wyoming                                     Eaton                                                 SWN

OH Permits for week ending May 5, 2018

 

              County                                   Township                                          E&P Companies

  1. Columbiana                                Elk Run                                             Hilcorp
  2. Columbiana                                Elk Run                                             Hilcorp
  3. Jefferson                                     Wayne                                               Ascent
  4. Jefferson                                     Wayne                                               Ascent                       

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

Utica Summit