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The latest facts and a rumor from the Marcellus and Utica Shale

  • French Company, TOTAL, Halts Investing in Marcellus and Utica Shale French energy giant Total earlier this week said it was halting further investments in American shale plays including Ohio's Utica shale. The reason is the low prices for natural gas in the United States.

    Total had purchased a 25 percent investment from Chesapeake Energy Corp. in 10 counties in eastern Ohio for $2.3 billion.  It later purchased a 90 percent stake in 9,000 leases in Columbiana County for an additional $2 billion.
  • Bradford County Landowners Reaping the Benefits of Natural Gas Production. Marcellus Shale gas production has generated $160 million in royalties for land owners in Bradford County, a Penn State Extension educator said at a recent public meeting in Wysox Township.

    And the number of royalty recipients will continue to grow, since there have been 1,856 gas wells drilled in the county, but only 512 of those wells are producing gas commercially, said agronomy educator Mark Madden of Penn State Extension.
  • Cuomo Continues to Delay Drilling in NY.  Gov. Cuomo last week punted on whether he would decide to legalize hydraulic fracking in the state’s Marcellus Shale region. Cuomo’s Department of Environmental Conservation said it would now partner with the Department of Health to finish its fracking review.   The DEC started its review back in 2008.  This is government efficiency at its best.

    Bringing in the DOH means the state will not make a decision about legalizing fracking until next year, one source said.
  • Good News!  The gas should start moving. Natural gas pipelines coming into service by year end may boost deliveries from the Marcellus shale deposit in the U.S. Northeast by 30 percent, extending a supply glut that helped send prices to decade lows.

    As much as 2 billion cubic feet of gas a day are set to flow from the lines in Pennsylvania, Ohio and West Virginia, bound for markets along the Eastern Seaboard, based on government and pipeline-company projections. About 1,000 Marcellus shale wells sit uncompleted, mainly because of a lack of pipeline infrastructure, according to the Energy Department.
  • Seneca Resources Corp. has provided an update of its Marcellus and Utica shale play activity. Seneca has brought on three Marcellus wells on its DCNR Tract 100 in Lycoming County, Pa., two of which utilized a reduced cluster spacing (RCS) completion design. The two RCS wells had peak 24-hr production rates of 13.4 and 14.9 MMcfd of natural gas, and the third well had an 11.3 MMcfd peak.

    The company has tested eight wells on Tract 100 to date with IPs ranging from 10.5 to 16.1 MMcfd.

    A horizontal RCS completion at the Rich Valley prospect in Cameron County, Pa., peaked at 6.3 MMcfd.

    Seneca completed horizontal Utica shale wells Pennsylvania. The Tionesta well in Forest County had all stages successfully completed. The Mount Jewett well in McKean County, as a result of an operational challenge unrelated to reservoir quality, was only partially completed with three frac stages. Both wells are shut-in for 60 days and are expected to go on production in November.
  • PDC Energy Utica Shale Update. PDC announced it is pursuing development   in southeast Ohio independently and is no longer actively seeking a joint venture partner to develop the play.

    PDC believes that developing its approximate 45,000 net acre Utica position on a standalone basis will produce greater long-term value, particularly given the very high initial production rates and high liquids content from recent well results announced by other E&P companies in close proximity to the company's acreage positions. While the 2013 budget is not finalized, the company anticipates it will invest approximately $50 million in the Utica next year which is expected to be funded from cash flow and borrowings under its revolving credit facility.

    In 2012 so far, PDC has drilled its first two horizontal wells in Guernsey County, Ohio and is very encouraged by drilling, mud log and geological data results. The company's first horizontal well, the Onega Commissioners #14-25H, is currently being completed. The well will be shut in for an approximate 60-day rest period and is anticipated to be flow tested in November 2012. The Company's second horizontal well, the Detweiler #42-3H, is expected to be completed around year-end 2012 and flow tested in the first quarter of 2013 subsequent to its rest period.

    A third horizontal well is expected to be spud in the fourth quarter of 2012 in northern Washington County. The well will be the first horizontal well drilled in the Company's southern acreage. First sales from the three horizontal wells are anticipated in the second quarter of 2013.
  • Rex Energy in Carroll County.  Rex Energy joins Chesapeake Energy, EnerVest, Gulfport and Antero Resources in issuing positive reports about oil and gas production from Utica wells in eastern Ohio.
  • ODNR issues new permits.  The Ohio Department of Natural Resources' Division of Oil and Gas Resources Management has approved seven new drilling permits in the Utica shale.  The new permits are three in Portage County, two in Harrison and one each in Mahoning and Monroe, according to filings from the week of Sept. 16.  Portage County is a sleeper county which has received 8 permits this year.
  • Bullish on Ohio According to the Cleveland Plain Dealer, the Ohio Shale Coalition is projecting that nearly 2,000 horizontal wells will be drilled into Ohio's Utica shale by the end of 2014.  At present, drillers have 41 drilling rigs working in Ohio, said Linda Woggon of the coalition.  I have heard there are 40 rigs in Ohio, but according to Baker Hughes (see below) there are only 19 rigs drilling.

Carbondale Seminar Featuring Cabot Oil & Gas and Baker Hughes.

Carbondale, PA October 18, 2012

PA businesses should attend the upcoming seminar in Carbondale, PA on October 18th. Penn State University Extension Division, and the Carbondale al Chamber of Commerce will be presenting its third Oil and Gas Business Development seminar which will feature George Stark who will review Cabot’s activity in Northeastern PA and David Angelo from Baker Hughes Mountain Top location will provide an overview of Baker Hughes, Northeastern Operations and how it works with local companies.

Click Here for seminar information.

Baker Hughes Rig Counts

  • Baker Hughes Rigs count for the September 21 reporting week.  Turnaround in the PA rig count. 
    • OH and WV rig counts continue to inch up.
    • PA Marcellus 60 rigs – down 2 from last week
    • PA Utica 3 rigs – Unchanged
    • Ohio Utica 19 rigs – unchanged
    • WV Marcellus 27 rigs – unchanged

Call us to give your business a strong presence on the well site, on the pipeline and on the road.

Joe Barone 610.764.1232
Vera Anderson 570.337.7149

Midstream PA