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Midstream PA 2018
September 25, 2018
Penn Stater Conference Center
State College, PA

http://midstreampa.com/

WV Energy Expo 2018
October 3, 2018
Hazel and J.W. Ruby Community Center
Morgantown, West Virginia

http://wvenergyexpo.com/

Utica Summit
October 10, 2018
Walsh University
North Canton, OH

http://www.uticasummit.com/

Shale Insight
October 23-25, 2018
David Lawrence Conference Center
Pittsburgh, PA

http://shaleinsight.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

Latest facts and a rumor from the Marcellus, Utica, Permian, Eagle Ford, Bakken and Niobrara Shale Plays

ADG Selects Parsons for $3.4 Billion Storage Hub Build Out. Appalachia Development Group on Wednesday announced it's selected international engineering firm Parsons as its engineering, procurement and construction (EPC) partner for the construction of the $3.4 billion Appalachia Storage and Trading Hub (ASTH).

The storage hub announcement came just two days after the president of the Chinese company which promised last November to invest more than $83 billion in West Virginia energy projects said that deal is on track and moving forward, Kallanish Energy reports.

Parsons will initially focus on Pre-FEED and FEED (front-end engineering and design), including project management and execution planning, for the storage hub. Subsequent phases include construction of the massive project and its long- term operation.

The ASTH is a proposed regional underground storage facility for natural gas liquids.

“After a rigorous review process of some of the most widely known and respected EPC companies in the country, we are pleased to announce the selection of Parsons as our EPC partner,” said Steven B. Hedrick, president & CEO, ADG. “Parsons has proven and successful experience with complex infrastructure projects. I have confidence in Parsons’s ability to support the development and completion of the Hub safely, effectively and efficiently.”

According to the American Chemistry Council, the development of the ASTH would serve as a catalyst for the creation of an estimated $36 billion in regional follow-on petrochemical investments, and more than 100,000 new long-term jobs.

It will increase the probability of American energy dominance by releasing the potential of the Marcellus, Utica and Rogersville Shale gas deposits for both domestic and international consumption, according to ADG.

“Parsons is honored to have been selected by ADG as a partner on this critically important project that will ultimately support the economic and energy security needs of so many communities and citizens, including economic revitalization of the Ohio River Valley states,” said Carey Smith, president of Parsons federal business unit.

This past Jan. 3, ADG announced that based on the merits of its Part I Application, it had advanced to the next phase to submit a Part II Application for a loan guarantee under the U.S. Department of Energy (DOE) Title XVII Loan Guarantee Program.

The application is for a $1.9 billion loan guarantee from the DOE to support the development of infrastructure for the Appalachia Storage and Trading Hub.

ADG currently is working with DOE on Part II of the application process while simultaneously working to secure $1.4 billion in equity investment.

Mariner East 2 Wins Big Court Decision. (Thanks, MDN) Two different townships in the Philadelphia area, amped-up by and using money from Big Green groups tried to stop the Mariner East 2 (ME2) pipeline project by claiming it violated local zoning ordinances. The construction of ME2 is governed by the PA state Public Utility Commission and the state Dept. of Environmental Protection. It is not a federal (i.e. FERC) project. Because it is a state-oversight project, the issue of primacy (whose rules and regulations govern) resides at the state level and not at the local level. Two local townships–one in Chester County the other in Delaware County–argued in separate cases before PA Commonwealth Court that local zoning regulations for siting the pipeline should still apply. Commonwealth Court, in a pair of decisions earlier this year, ruled against that view. Using Big Green money, both towns appealed their cases to the PA Supreme Court. On Tuesday, the Supremes declined to hear either case, meaning the Commonwealth Court ruling stands and this issue is now, finally, done. Antis’ attempts to stop the ME2 project by using local zoning ordinances are a closed door.

Ascent Makes Another Big Purchase in the Utica. CNX Resources and Hess have completed their previously announced sale of their Ohio Utica joint venture interests in the shale play in eastern Ohio, US for around $400m to Ascent Resources.

The deal involves sale of 39,000 net acres to Ascent Resources including 26,000 net undeveloped acres.

Hess said that it will use the proceeds from the deal to invest in its higher return growth opportunities in Guyana and the Bakken, and also for funding the previously announced share repurchase program.

CNX Resources, on the other hand, had earlier said that it would use the net proceeds from the sale to pay down debt, invest in drilling and completion activities and also for making bolt-on acreage acquisitions whenever opportunities are available.

The sale for CNX Resources included 50 net producing wells, five 50% working interest wells it had recently completed, two 50% working interest wells for which it has drilled the top hole, and nearly 26,000 net undeveloped acres.

The sold assets are located in the wet gas Utica Shale areas of Belmont, Guernsey, Harrison, and Noble counties.

Ascent Resources has also completed acquisition of natural gas and oil leasehold interests, fee minerals and associated assets in the Utica shale play in the Appalachian Basin from Utica Minerals Development for around $477m.

SWN Sells Fayetteville Shale to Concentrate on the Appalachian Basin. Southwestern Energy Co. said that it will exit Arkansas’ Fayetteville Shale in a deal worth more than $2 billion as the company transitions to an Appalachian pure-play E&P.

The long-awaited sale of Southwestern’s Fayetteville Shale business is with Flywheel Energy LLC, a private company backed by Kayne Private Energy Income Funds. Flywheel agreed to acquire the E&P and related midstream gathering assets for $1.865 billion in cash. In addition, the private E&P also agreed to assume about $438 million of future contractual liabilities.

Southwestern plans to use proceeds from the Fayetteville sale to pay down debt, buy back stock and accelerate activity in southwest Appalachia in West Virginia.

Following the closing, Southwestern expects to have pro-forma debt of roughly $2.3 billion. The resulting increase in activity in West Virginia is expected to accelerate the company’s path to self-funded growth in production and shareholder value. Southwestern targets a long-term sustainable debt/EBITDA ratio of two times by 2020.

Cabot Begins Fracking on Oil Wells in Ashland County, OH. Drilling on Cabot Oil and Gas’ third well pad site in northeastern Ohio is beginning just as fracking has commenced on the company’s first site, in Ashland County’s Green Township. Cabot has said it plans eventually to have five exploratory wells built in the Ashland, Richland, Wayne Holmes and Knox County region. Locations for two additional well-pad sites in addition to the pads in Green, Mohican and Vermillion townships in Ashland County have not yet been nailed down, according to George Stark, director of public affairs for the Houston-based company. Stark said two possible sites for well pads are south of Loudonville off County Road 529, or in Richland County’s Monroe Township, near Malabar Farm. “After (the site on state Rt. 511), we don’t have a place,” he said. “There are a few locations off of (state Rt. 39) and we’re just working the permits. “There are a lot (of locations) on the drawing board, some farther along than others. Soon we need to pull the trigger. Construction season is something we will be mindful of.” Stark said the company is working with landowners to get leases signed so they can apply for the necessary permits from the state.

Rex Energy Sold. Rex Energy has finally found a buyer for its Marcellus/Utica assets. After scheduling and rescheduling a bankruptcy auction four times in a single week, Rex canceled the auction and said it has cut a deal with PennEnergy Resources to buy the company–for $600.5 million. You may recall that Rex, heading into bankruptcy in May, owed nearly $1 billion to several creditors. The deal Rex/PennEnergy is subject to approval by the bankruptcy court, but we expect it will get approved. Part of the deal calls for PennEnergy to pay $1 million to Rex landowners who had sued the company claiming Rex didn’t pay them royalties.

PennEnergy launched in 2011, founded by two former Atlas Energy executives–Rich Weber and Greg Muse. The company is backed by EnCap Investments and now has 70 employees. No word on how many of Rex’s employees will come along with the deal. Rex’s acreage sits close to PennEnergy’s, hence the interest.

OH 2 ND Qtr. Production Numbers. Ohio reports 42.3% increase in Utica natural gas production says Kallanish Energy. Production of natural gas in Ohio’s Utica Shale grew by 42.3% in the second quarter of 2018, according to the Ohio Department of Natural Resources. Production was a record high 554.31 billion cubic feet of natural gas, the state agency said Tuesday in releasing the latest data. That is a big jump from the 389.66 Bcf projected in 2017, it said. Oil prices fell Tuesday as some investors took profits on recent strong gains, but losses were limited the day after a U.S.-Mexico trade agreement eased worries about tensions between the two countries. It was also up from the 531.3 billion cubic feet produced in Q1 2018. The top-producing well for natural gas was an Ascent Resources well in Belmont County’s Richland Township, with nearly 3.2 billion cubic feet of natural gas in the quarter.

EQT Leadership Changes Coming. EQT Corp. has announced key leadership appointments that will go into effect when the company’s upstream and midstream businesses separate.

Robert J. McNally will be the president and CEO of EQT, a key Appalachian Basin producer, Kallanish Energy reports.

He will be aided by David Schlosser, executive vice president, Exploration & Production and Innovation; Blue Jenkins, executive vice president, Commercial, Business Development, Information Technology and Safety; Jimmi Sue Smith, senior vice president and chief financial officer; Lew Gardner, general counsel and vice president, External Affairs; Dave Smith, vice president, Human Resources; Blake McLean, vice president, Strategic Planning; and Pat Kane, vice president, Investor Relations.

The Equitrans Midstream Corp. leadership team will be led by Thomas F. Karam, president and CEO. He will be assisted by Diana Charletta, executive vice president and chief operating officer; Kirk Oliver, senior vice president and chief financial officer; Bob Cooper, senior vice president, MVP Engineering and Construction; Charlene Petrelli, senior vice president and chief administrative officer; Bob Williams, vice president and general counsel; Carmine Fantini, vice president, Strategic Planning; and Nate Tetlow, vice president, Corporate Development and Investor Relations.

The proposed separation remains subject to customary conditions including approval by the Internal Revenue Service, the Securities and Exchange Commission and the EQT board.

Permian Producers Turning to Trucks and Rail. Oil producers in the Permian Basin, dealing with a shortage of pipelines, are increasingly turning to trucks and rail to ship the flood of crude from the West Texas oil field to refineries and export terminals on the Gulf Coast. These transportation shifts are driven by two simple math problems. First, crude oil production in the Permian has reached 3.6 million barrels a day, while pipeline capacity out of the region is just 3.5 million barrels a day, according to the energy research firm Wood Mackenzie. Next, crude is selling for as much as $10 more a barrel in South Texas, the Gulf Coast and other markets outside of West Texas, where inventories are building in part because of the lack of pipeline capacity. The latest effort to move oil to more lucrative markets was launched earlier this week, when the Houston oil transport company JupiterMLP signed a deal with Vista Proppants and Logistics of Fort Worth to ship West Texas crude by rail from Vista’s loading terminal in Pecos. Vista plans to ship about 400,000 barrels a month from its Pecos terminal through 2019 and potentially into 2020, depending on when pipeline projects are completed.

The Pipeline Boom Coming to Texas. Oil Production in Texas has reached such incredible heights that there has developed a scramble to effectively transport oil off the drill site. All across the state wells are popping up faster than transportation can effectively be established. This has led to massive infrastructure plans to emerge and give rise to the next wave of job creation in Texas. It will come by way of oil pipelines. West Texas is home to the Permian Basin, where oil wells are popping up like daisies. Oil producers are forced to turn to alternative short term solutions, such as trucks and rail, to keep production flowing off the worksite. This is soon all to change though, as major oil pipelines are to be built and come online between 2019-2020.

Kinder’s $2 billion Permian Highway Pipeline. Houston's Kinder Morgan and Midland-based EagleClaw Midstream said they've authorized the proposed $2 billion Permian Highway Pipeline project to transport natural gas from West Texas to Houston and other hubs. The project is part of the race to build gas and oil pipelines from the booming Permian Basin to refining and port hubs near Houston and Corpus Christi. Permian production is currently stalling from pipeline shortages to carry the oil and gas out of rural and landlocked West Texas.

Jump in TX June Oil Production. In June, Texas produced 88.86 million barrels of crude oil and 615.21 billion cubic feet (Bcf) of natural gas from oil and natural gas wells, according to the Railroad Commission of Texas.

Those are preliminary figures and will be updated as late and corrected production reports are filed, the state agency said.

Initial production reported in June 2017 was 75.25 Mmbbl of crude oil, updated to the current figure of 90.09 Mmbbl, and 408.53 MMcf , updated to the current figure of 661.54 MMcf.

Permian Is Burning $1 million a Day. In America’s busiest oil field, roughly $1 million worth of natural gas goes to waste each day. Shale drillers in the Permian Basin of Texas and New Mexico say they have no way to move the gas—a byproduct of oil drilling—to market because there aren’t enough natural-gas pipelines. Instead, they are getting rid of the excess gas by setting it on fire, a practice known as flaring. Companies flare about 3% of the gas they extract in the Permian. But production in the basin is so high that the volume of gas burned every day would be large enough to supply the daily needs of states such as Montana or New Hampshire, by some estimates. The flaring also produces greenhouse gas emissions equivalent to 2 million cars. Shale drillers are flaring with the consent of state regulators. Until more natural-gas pipelines and storage facilities are added, the only alternative to burning gas would be to reduce some of the area’s lucrative oil production, which has supercharged the region’s economy and boosted overall U.S. crude output to a record of around 11 million barrels a day. Texas officials say they expect the issue to resolve itself eventually once the necessary infrastructure is built. “There’s nothing for us to do,” said Ryan Sitton, a member of the Texas Railroad Commission, which regulates oil and gas operations. “If gas becomes a waste product, people will flare it.”

ETP, Magellan MPLX and Delek Partner for Major Permian Pipeline. Three of the largest midstream/energy transportation companies in the U.S. are teaming with a crude oil refiner/logistics company to build new takeaway capacity out of the Permian Basin.

Energy Transfer Partners (ETP), Magellan Midstream Partners, MPLX and refiner Delek U.S. Holdings jointly announced Tuesday sufficient commitments have been received to proceed with plans to construct a 30-inch common carrier pipeline to transport crude from the Permian to the Texas Gulf Coast.

The line’s diameter can be increased based on additional commitments received during an upcoming open season, Kallanish Energy learns. An open season for additional shipper volume commitments on the new pipeline system will be launched later this week.

The 600-mile pipeline system is expected to be operational in mid-2020 with multiple Texas origins, including Wink, Crane and Midland, Texas.

The system will have the capability to transport crude oil to both Energy Transfer's Nederland, Texas, terminal and Magellan's East Houston, Texas, terminal for delivery through their respective distribution systems.

The project is subject to receipt of customary regulatory and board approvals of the respective entities.

16 Planned Pipeline Projects in the Northeastern U.S. (Thanks, MDN)Did you know there are 16 major announced pipeline projects in the northeast?! We recently happened across a handy list of those projects, a list published by the Northeast Gas Association less than a month ago. The list includes a description of what will get built, who’s doing the building, and the target in-service date. A few of the projects are in limbo (Constitution, Access Northeast), but most are either under construction or soon will be. We dig this kind of list–well laid-out, concise, and useful. And we think you will too. Here’s the name of the pipelines in the list: Access Northeast, Atlantic Bridge, Atlantic Sunrise, Constitution, Eastern System Upgrade, Empire North Expansion, Northeast Gateway, Northeast Supply Enhancement, Northern Access, PennEast, Portland XPress, Rivervale South to Market, Station 261, Wright Interconnect, Valley Lateral Project.

Chinese Say $84 Billion in WV Is Still a Go. A plan calling for nearly $84 billion in Chinese investment in West Virginia petrochemical and natural gas projects will be honored despite the rumblings of a trade war between the US and China, the head of the Chinese conglomerate making the investment push said in Hong Kong on Monday. "We and the West Virginia government, and other related companies, have always been extremely aggressive in pushing forward this project," China Energy Investment General Manager Ling Wen told reporters at a media briefing on the earnings of its China Shenhua Energy subsidiary. Ling said: "Both sides have kept very close contact with each other ever since, and what has been reported in the media, such as we stopped our mutual engagement or canceled our trips -- was not true," the Nikkei Asian Review reported. China Energy Investment's CEO and other executives were scheduled to come to the state in time for West Virginia officials to make the announcement of the first natural gas and NGL project investments at a June petrochemical conference in Pittsburgh. REPETITIVE FROM ABOVE

Atlantic Sunrise Pipeline Seeks Approval to Begin Service. Williams Cos. is seeking approval from the Federal Energy Regulatory Commission to begin service on the $3 billion Atlantic Sunrise natural gas pipeline on Sept. 10, Kallanish Energy reports.

In a 10-page letter to FERC, Williams said: “Construction of the remaining project facilities is nearing completion, and restoration of areas affected by the project is proceeding satisfactorily.”

It asked FERC to approve service by Sept. 7, so it could notify shippers.

The project in five Eastern states will provide 1.7 billion cubic feet per day (Bcf/d) of natural gas from the Marcellus Shale in northern Pennsylvania. That is enough natural gas to heat 7 million homes.

Last May, FERC approved partial service on the line by Transcontinental Gas Pipe Line Co. (Transco), a Williams subsidiary.

The pipeline is seen as a key link to move Appalachian Basin natural gas from the Marcellus shale to markets in the Mid-Atlantic and Southeastern U.S.

It will move natural gas from northeast Pennsylvania to Lancaster County, Pa., where it will connect to an existing pipeline. At present, the mainline of the project is moving about 550,000 cubic feet per day of natural gas.

The project includes installation of nearly 200 miles of new pipeline, pipeline loops, two new compressor stations and modifications to existing compressor stations in Pennsylvania, Maryland. Virginia, North Carolina and South Carolina.

The segment of the project known as the Central Penn Line will be jointly owned by Transco and a third party.

The project is adding bi-directional flow on the existing Transco system.

FERC had approved the project in February 2017.

Some of the natural gas may be exported as liquefied natural gas at Cove Point LNG in Maryland.

 

Eclipse Resources Is Sold. Some big news breaking from yesterday: After months of teasing by Eclipse Resources that it’s working on selling itself–it finally has. The buyer is Blue Ridge Mountain Resources, the renamed remnant of Magnum Hunter Resources. Magnum Hunter filed for bankruptcy in December 2015, emerging from bankruptcy in May 2016 minus CEO Gary Evans. Looking to shed the image of the past, the company renamed itself as Blue Ridge in January 2017. Blue Ridge, headquartered in Texas, has 99,000 acres of leases (mostly undeveloped) in the Marcellus and Utica Shale plays. Eclipse, on the other hand, is headquartered in State College, PA and has 128,000 acres–focused 100% on the Marcellus/Utica. Eclipse is renowned for having drilled the world’s longest onshore lateral wells.

Blue Ridge President and CEO John Reinhart will become President and CEO of the newly combined company. Eclipse’s top engineer Oleg Tolmachev–the guy who figures out how to drill those super-long laterals–will become Executive Vice President and COO of the combined company.

I have heard the new company will use the Blue Mountain Resources name.

Dominion Buying Piece of Mountain Valley Pipeline. There are two competing pipeline projects that generally run along the same route to shuttle Marcellus/Utica gas to the southeastern U.S. One project is EQT Midstream’s Mountain Valley Pipeline (MVP), which runs from 303 miles from West Virginia into southern Virginia. MVP is facing a court case that’s idled three-fourths of the project, leading to a layoff of “thousands” of workers.

The other project is Dominion Energy’s Atlantic Coast Pipeline (ACP), a 600+ mile pipeline from West Virginia through Virginia and into North Carolina, almost to the border with South Carolina. ACP is currently idled because of a similar court case.

Both EQT and Dominion believe the court order and FERC’s directive is only a temporary setback. Both believe their projects will be completed sometime next year. Here’s where it gets interesting. Although MVP has not officially filed with FERC (yet), they do plan to expand from the current termination point in Pittsylvania County, VA another 70 miles into North Carolina. That new portion of MVP is called the Southgate project.

Last week PSNC Energy, based in North Carolina, purchased a 30% share in the MVP Southgate project. PSNC is a subsidiary of South Carolina-based SCANA Corp. Sound familiar? Dominion Energy is right now in the process of closing a deal to buy/merge in SCANA. Dominion is buying a 30% stake in its primary competitor to flow Marcellus/Utica gas south.

PA Permits August 23, to September 6, 2018

County Township E&P Companies
Allegheny Elizabeth Huntley & Huntley
Allegheny Elizabeth Huntley & Huntley
Allegheny Elizabeth Huntley & Huntley
Allegheny Elizabeth Huntley & Huntley
Bradford Troy Reposol
Bradford Troy Reposol
Bradford Troy Reposol
Bradford Troy Reposol
Bradford Troy Reposol
Bradford Troy Reposol
Bradford Troy Reposol
Bradford Troy Reposol
Butler Allegheny EM Energy
Butler Allegheny EM Energy
Butler Allegheny EM Energy
Butler Allegheny EM Energy
Butler Allegheny EM Energy
Butler Allegheny EM Energy
Butler Allegheny EM Energy
Greene Morris EQT
Lycoming Gamble Inflection
Lycoming Gamble Inflection
Westmoreland Allegheny CNX

PA Permits August 23, to September 6, 2018

County Township E&P Companies
Belmont Mead XTO
Belmont Mead XTO
Belmont Mead XTO
Belmont Mead XTO
Columbiana Washington Chesapeake
Columbiana Washington Chesapeake
Columbiana Elk Run Hilcorp
Columbiana Elk Run Hilcorp
Columbiana Elk Run Hilcorp
Harrison Monroe Chesapeake
Harrison Monroe Chesapeake
Harrison Monroe Chesapeake
Harrison Monroe Chesapeake
Jefferson Ross Chesapeake
Noble Jefferson Triad Hunter

UTICA SHALE WELL ACTIVITY AS OF SEPT. 1

  • DRILLED: 276 (297 as of last week)
  • DRILLING: 119 (148)
  • PERMITTED: 477 (471)
  • PRODUCING: 2,009 (1,957)
  • TOTAL: 2,881 (2,873)

TOP 10 COUNTIES BY NUMBER OF PERMITS

  • 1. BELMONT: 586 (583 as of last week)
  • 2. CARROLL: 525 (525)
  • 3. HARRISON: 425 (421)
  • 4. MONROE: 406 (406)
  • 5. GUERNSEY: 233 (233)
  • 6. NOBLE: 223 (222)
  • 7. JEFFERSON: 188 (188)
  • 8. COLUMBIANA: 159 (159)
  • 9. MAHONING: 30 (30)
  • 10. WASHINGTON: 22 (22)
  • 14. STARK: 13 (13)

TOP 10 COMPANIES BY NUMBER OF PERMITS

  • 1. CHESAPEAKE: 885 (881 as of last week)
  • 2. GULFPORT: 406 (406)
  • 3. ASCENT RESOURCES UTICA: 371 (371)
  • 4. ANTERO: 261 (261)
  • 5. ECLIPSE: 186 (186)
  • 6. RICE: 129 (129)
  • 7. HESS: 89 (89)
  • 8. CNX GAS: 84 (84)
  • 9. XTO: 74 (71)
  • 10. HILCORP: 59 (59)


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

Utica Summit 2019