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NewsLetters

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

  • U.S. Gas exports could be coming (WSJ 12/6/12).  Recent government study encourages the U.S. to export natural gas.  “The administration has said that the study would be central to its decision on approving exports.”  There are currently 22 requests into the Department of Commerce to export natural gas.  If the government approves exporting natural gas, look for natural gas drilling (dry and wet) to increase substantially.  All majors are in the Marcellus and Utica to export natural gas.  The prices in Europe and the Far East are much higher than the U.S.  For instance, last week natural gas in US was $3.70 per million BTU’s in Japan it was $17.  As I have told many people, the majors are not in this to send natural gas to Boston.
  • Oil output near 15 year high (WSJ 12/5/12).  U.S. daily production reach 6.5 million barrels in 2012 an increase of 900,000 barrels over September 2011 a 16% increase.  The Saudis produce around 9.8 million barrels at this rate it will not be long before the U.S becomes the #1 oil producer in the world.
  • Global Shale Plays Have Problems. According to WSJ, it will be difficult for oil companies to replicate their success in the U.S.  Each shale play outside the U.S. has its own problems.
    • Poland – Exxon pulled out after drilling two wells that have enough oil or gas to justify additional drilling
    • China – Many believe China has more shale oil and gas than the U.S., but most of it is in arid or heavily populated areas.  There may not be enough water for fracking.
    • Argentina – Politics make it cost twice as much to drill a well
    • France and Bulgaria – They have both banned fracking

While these global shale plays may offer significant reserves, the U.S. is the place to be for the next ten years.

  • Ohio drilling a little behind ’12 projections, but bullish by 2015.  While ODNR’s March projection was 250 wells drilled and it looks like 188 will be drilled.  ODNR expects that by 2015 there will be 2250 shale wells drilled.
  • EQT is getting aggressive.  EQT Corp. is planning to drill eight Utica wells in 2013 in Ohio's Guernsey County. It also expects to drill 153 wells in the Marcellus shale.  EQT said it expects to focus its drilling in central Pennsylvania and in Guernsey County where it has about 16,000 acres.  The company is also looking to develop the shallow Upper Devonian rock in Pennsylvania in 2013.  It will have eight rigs in the field in 2013.
       
    EQT is moving all its rigs out of Kentucky and moving them to PA and OH (Rumor)
  • MarkWest projects coming online.  MarkWest Utica EMG LLC has started up the 60 MMcfd Cadiz refrigeration plant in Harrison County, Ohio, supported by production from two Utica shale wells operated by Gulfport Energy Corp.
    MarkWest Energy Partners dedicated its first gas processing center in Doddridge County WV — with six more under construction statewide. MarkWest is the largest processor of natural gas and the largest fractionator of natural gas liquids in the Marcellus gas field.
  • Antero Resources establishing HQ in WV.  Antero Resources announced that it will locate its corporate headquarters for Marcellus shale activity in Harrison County. Antero is currently the nation’s second largest Marcellus gas developer.   Antero Resources will be a customer of MarkWest’s new gas processing plants in Doddridge. The two companies truly go hand-in-hand.
  • Shell’s Ethane cracker plant sees activity increasing.
    • Shell is looking for housing for 200 senior managers  (Rumor)
    • Baker Corporation is moving 700 workers to Beaver County, PA (Rumor)

Baker Hughes Rig Counts

  • Baker Hughes Rigs count for the December 11 reporting week.  PA is getting more active in the Utica
    • PA Marcellus 66 rigs – 0 unchanged
    • PA Utica 5 rigs – up 1
    • Ohio Utica 25 rigs – down 1 
    • WV Marcellus 26 rigs – 0 unchanged

Drilling in PA

With so much information about drilling in OH, do not forget there is still tremendous amount of drilling to be done in PA.  The map below shows the permits issued and wells drilling in PA from January to October 2012.  Almost 1000 more permits were issued than wells drilled in PA in 2012.

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Joe Barone jbarone@shaledirectories.com 610.764.1232
Vera Anderson
vera@shaledirectories.com 570.337.7149
Andrea Bagnell
andrea@shaledirectories.com 610.256.1898

 

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