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  • Permit Activity. 
    • PA – 43 permits; it’s still very active; Chief has 10 permits; 11 different E&P companies secured permits.
    • OH –16 permits; Aubrey’s American Energy Utica receives 7 permits; it looks like AEU is going to need all those rigs. (See below)

Expo/Industry events for the next few months:

  • DUG East Conference and Exhibition June 3-5, Pittsburgh, PA
  • Midstream Ohio 2014 June 11, Canton, OH – this event will provide a good update of midstream activity in OH with speakers from
    • Blue Racer
    • Access Midstream
    • Momentum
    • EnLink Midstream (merger of Crosstex and Devon Midstream)
    • Panel of local midstream companies
      Additionally, Bricker & Eckler’s Chris Schmenk will present the firm’s “Shale Economic Development Overview” which will highlight the midstream projects in OH.
  • Northern Tier Marcellus Shale Expo June 18, Mansfield, PA

Latest facts and a rumor from the Marcellus and Utica Shale

  • Latvia wants PA Nat gas.  Mrs. Laimdota Straujuma, prime minister of the Republic of Latvia, was in Philadelphia recently to meet with energy leaders to see if she can secure natural gas for Latvia.  Currently, Russia supplies 100% of Latvia’s natural gas.

    Could more eastern European companies be visiting PA for Nat Gas?
  • McClendon’s ramping quickly in the Utica.  American Energy Partners are telling its suppliers that it will have 9 rigs in OH by the end of the year; 15 rigs by summer of 2015 and 22 rigs by the end of 2014. (RUMOR)
  • Utica drilling in the WV’s panhandle.  Oil and natural gas companies with Marcellus Shale operations in the Northern Panhandle are turning their attention to the Utica Shale.

    The Utica Shale underlies the Marcellus Shale in much of Marshall, Wetzel and Ohio counties.

    Gastar Exploration is drilling an exploratory well in both the Utica and Point Pleasant formations in Marshall County. Stone Energy Corp. operates mostly in Wetzel County and plans to drill a Utica exploratory well in June. Fossil Creek of Ohio also is exploring the Utica Shale in the panhandle.
  • Drilling PA state forest.  Lt. Governor Cawley commented at the PIOGA’s Eastern Conference and Trade Show that PA state forests may be opened for drilling.  He did not give a definite timetable for this.  
  • We’re pumping oil.  U.S. crude production climbed to a 28-year high last week as the shale boom moved the world’s biggest oil-consuming country closer to energy independence.

    Output rose 78,000 barrels a day to 8.428 million, the most since October 1986, according to Energy Information Administration data. The combination of horizontal drilling and hydraulic fracturing, or fracking, has unlocked supplies from shale formations in the central U.S., including the Bakken in North Dakota and the Eagle Ford in Texas.

    The U.S. met 87 percent of its energy needs in 2013, and 90 percent in December, the most since March 1985, according to the EIA, the statistical arm of the Energy Department.

    Crude output will average 8.46 million barrels a day this year and 9.24 million in 2015, up from 7.45 million last year, the EIA said in its monthly Short Term Energy Outlook on May 6. Next year’s projection would be the highest annual average since 1972.
  • Some of that oil could be exported.  Top Obama administration officials are considering relaxing federal laws banning crude-oil exports, a move that would upend decades-old policy, cause a political stir in Washington and sway the global oil market.

    U.S. Energy Secretary Ernest Moniz said Tuesday that some of the fast-growing supply of domestically produced oil isn't suitable for refining locally, which could warrant re-examining a nearly 40-year-old law that bans exports of most crude.

    "The nature of the oil we're producing may not be well-matched to our current refinery capacity," Mr. Moniz said Tuesday after an energy conference in Seoul. The administration is studying the issue, though government officials declined to comment on its scope or timing.
  • Access Midstream expanding in OH.  Access Midstream Partners is planning to expand its Utica East Ohio (UEO) midstream service complex in eastern Ohio. The project is expected to increase UEO’s total capacity to 1 billion cubic feet per day (bcf/d) and allow for a processing capacity of more than 1.1 bcf/d, the Oklahoma City-based company said Monday.

    Additional capacity is needed to meet new commitments from existing customers Chesapeake Energy Corp., Total Gas & Power North America, Enervest Ltd. and new customer, American Energy – Utica, LLC, an affiliate of American Energy Partners, the company said.

    These new commitments are expected to increase UEO’s ultimate throughput by 70 percent over existing commitment levels, according to Access Midstream.

    The UEO complex will provide gathering, compression and dehydration services for American Energy – Utica. The agreement includes a 145,000-acre area of mutual interest, installation of 50 miles of gathering pipeline and compression services.
  • Magnum Hunter 1st quarter results.  During the first quarter of 2014, the Company completed the drilling of 5 gross (5 net) wells and completed 9 gross (6 net) wells in the Marcellus Shale and Utica Shale plays.

    The Company's first dry gas Utica Shale well, the Stalder #3UH located on the Stalder Pad (18 potential wells) in Monroe County, Ohio, was placed on production in February 2014 and produced for approximately 45 days before being shut-in.

    Its first Marcellus Shale well drilled on the Stalder Pad, the Stalder #2MH, has been drilled and cased, and fracture stimulation was completed in late March 2014.

    The Company drilled and cased three Marcellus Shale wells, the Stewart Winland #1301, #1302, and #1303, to an average true vertical depth of 6,155 feet with a 5,750 foot average horizontal lateral. The Company is currently drilling the pilot hole for its first Utica well in the State of West Virginia, the Stewart Winland #1300, to a true vertical depth of 10,750 feet.

    On the WVDNR Pad located in Wetzel County, West Virginia, the Company has drilled and cased Marcellus Shale wells, the WVDRN #1207, #1208 and #1209. The wells were drilled and cased to an average vertical depth of 7,500 feet with a 3,800 foot average horizontal lateral.
  • Gulfport adding acreage.  Since March 2014, Gulfport has increased its acreage position in the core of the play, adding approximately 13,000 net acres, bringing the Company's total acreage position to approximately 180,000 gross (179,000 net) acres under lease in the Utica Shale.
  • Busy year ahead for CONSOL.  CONSOL Energy, Inc. plans to drill 160 wells total in Marcellus Shale in 2014 compared to 117 in 2013; and hope to hit 32 Utica Shale wells in 2014.  
  • Nat. Gas processing expansion in eastern OH.  EV Energy Partner announced plans today to expand its operations in eastern Ohio.

    EV is part owner of the Utica East Ohio natural gas-processing complex which includes pipelines and processing plants in three Ohio counties.

    The company plans to boost production 20 percent to 1 billion cubic feet per day of natural gas.

    According to the company’s press release the added capacity is needed to accommodate growing production from Chesapeake Energy and other shale drillers.

    The Utica East Ohio expansion includes 50 miles of new pipes lines over a 145,000-acre area serving three processing plants surrounding Carroll County.
  • Blue Racer expands in Monroe County, OH.  Blue Racer Midstream LLC is looking to move forward quickly with plans related to its Monroe County cryogenic facility.

    Blue Racer – named after a snake known for its speed – has filed a request to the Ohio Power Siting Board for an expedited review of its plan to build a 138-kilovolt transmission line for the facility in its Berne processing complex.

    The company intends to construct a 2,000-foot electrical transmission line to a proposed natural gas cryogenic facility substation. When operating, the facility should be another cog in the Utica’s march toward relieving the infrastructure gap that has, at times, slowed development.

    The cryogenic processing units will be built at Blue Racer’s Berne natural-gas processing complex in Monroe County, which is in eastern Ohio’s Utica shale play. Berne eventually will use three cryogenic units that process 200 million cubic feet per day.

    Blue Racer expects to begin construction in June and finish at the end of August.

Rig Count

  • Baker Hughes Rigs count for the May 9th reporting week.
    • PA Marcellus 57 rigs – unchanged
    • PA Utica 1 rigs – unchanged    
    • Ohio Utica 35 – unchanged
    • WV Marcellus 27 – down 1

PA Permits for May 8, to May 15 2014

      County                    Township               E&P Company
1.    Armstrong               Sugarcreek              Apex
2.    Armstrong               Sugarcreek              Apex
3.    Bradford                  Herrick                    Southwestern
4.    Bradford                  Herrick                    Southwestern
5.    Bradford                  Herrick                    Chesapeake
6.    Bradford                  Terry                       Chesapeake
7.    Bradford                  Tuscarora                Chesapeake
8.    Bradford                  Tuscarora                Chesapeake
9.    Bradford                  Tuscarora                Chesapeake
10.    Bradford                 Wilmont                 Chesapeake
11.    Butler                     Muddycreek           Rex
12.    Butler                     Muddycreek           Rex
13.    Clinton                    Gallagher              Great Plains
14.    Greene                    Greene                 Energy Corp. Am
15.    Greene                    Greene                 Energy Corp. Am
16.    Greene                    Greene                 Energy Corp. Am
17.    Greene                    Greene                 Energy Corp. Am
18.    Greene                    Morris                  CONSOL
19.    Greene                    Washington          EQT
20.    Greene                    Washington          Vantage
21.    Greene                    Washington          Vantage
22.    Greene                    Washington          Vantage
23.    Lycoming                Cogan House        Range
24.    Lycoming                Cogan House        Range
25.    Lycoming                Cogan House        Range
26.    Susquehanna          Gibson                 Cabot
27.    Susquehanna          Gibson                 Cabot
28.    Susquehanna          Gibson                 Cabot
29.    Susquehanna          Gibson                 Cabot
30.    Susquehanna          Springville             Chief
31.    Susquehanna          Springville             Chief
32.    Susquehanna          Springville             Chief
33.    Susquehanna          Springville             Chief
34.    Susquehanna          Springville             Chief
35.    Susquehanna          Springville             Chief
36.    Susquehanna          Springville             Chief
37.    Susquehanna          Springville             Chief
38.    Susquehanna          Springville             Chief
39.    Susquehanna          Springville             Chief
40.    Susquehanna          Springville             Chief
41.    Washington            Cross Creek          Range
42.    Washington            Donegal                Chesapeake
43.    Washington            North Strabane      Range

OH Permits – week ending May 10, 2014

       County                   Township             E&P Companies

1.    Belmont                  Union                    Gulfport
2.    Carroll                     Fox                       Chesapeake
3.    Carroll                     Fox                       Chesapeake
4.    Carroll                     Fox                       Chesapeake
5.    Columbiana             Hanover                 Chesapeake
6.    Guernsey                Madison                Amer. Energy Utica
7.    Guernsey                Millwood                Rex
8.    Guernsey                Millwood                Rex
9.    Guernsey                Madison                Amer. Energy Utica
10.    Guernsey              Madison                Amer. Energy Utica
11.    Harrison                German                 Chesapeake
12.    Harrison                Nottingham            Amer. Energy Utica
13.    Harrison                Nottingham            Amer. Energy Utica
14.    Harrison                Nottingham            Amer. Energy Utica
15.    Harrison                Nottingham            Amer. Energy Utica
16.    Jefferson               Island Creek           Chesapeake

Take advantage of the bullish outlook and become a member in

Joe Barone 610.764.1232
Vera Anderson 570.337.7149
Andrea Bagnell 610.256.18


Northeast Supply Enhancement