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NewsLetters

This will be our last newsletter in 2012.  We wish everyone a Happy Holidays, Merry Christmas and a Happy, Prosperous and Healthy New Year.

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

  • BP getting active in OH.  In an effort to expand its footprint in Northeast Ohio and capitalize on its oil- and gas-exploration efforts here, BP continued to secure more mineral-rights leases in Columbiana County throughout November.

    According to the Columbiana County Recorder’s Office, there were 317 such leases purchased by multiple companies in November, with BP buying about 59.

    In September, the company had secured two leases in the county, and it purchased 26 in October.  BP already had landed 30 mineral-rights leases for December as of Monday. 

 

  • BP bringing 14 rigs into OH.  We have heard that BP is raising its visibility and which could support the rumor that it is bringing 14 rigs from the Barnett Play I n TX into OH.  (Rumor)

 

  • MarkWest and Gulfport busy in Harrison County. 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.

    Meanwhile, Gulfport reported strong gas and liquids flows from another Utica well that it hopes to connect to sales by the end of January 2013.

    Gulfport said its Wagner 1-28H well and Boy Scout 1-33H wells in Harrison County are feeding the Cadiz plant. Wagner 1-28H had 28 frac stages in an 8,143-ft horizontal leg, and Boy Scout 1-33H had 22 frac stages in a 7,974-ft lateral.

    MarkWest Utica said its partnership with Gulfport includes the development of extensive midstream infrastructure in Harrison, Guernsey, and Belmont counties, Ohio.

    MarkWest Utica is building the Cadiz I cryogenic processing plant with a capacity of 125 MMcfd expected to be completed by the first quarter of 2013. A further 200 MMcfd facility, Cadiz II, is to be operational by the third quarter of 2013 to support Gulfport's rapidly growing liquids-rich Utica production.

    By the beginning of 2014, MarkWest Utica is expected to construct up to 140 miles of gathering pipeline and associated compression for Gulfport's planned $215-225 million drilling program of 50 gross wells in 2013.

 

  • Did Chesapeake err on Utica shale fairway in Ohio? (Thanks Bob Downing, Akron Beacon Journal)  An analyst, Tim Rezvan of Sterne Agee, reports that Chesapeake Energy Corp. has acknowledged that the Utica shale in eastern Ohio extends further south than it thought.

    In addition, the gas edge of the Utica shale play also extends further to the west than the company had anticipated, it said.

    Chesapeake Energy's management "acknowledges the company misjudged the emerging fairway of the Utica shale," he wrote.

    The comments by Chesapeake Energy, the No. 1 player in Ohio's Utica shale is backed up by drilling results, he said in a Wednesday note to investors.

    In fact, the results from wells to the south of Chesapeake's wells are actually better, especially those of Gulfport Energy Corp. in Ohio's Harrison and Belmont counties, Rezvan said.

    Gulfport has the top four wells in Ohio for preliminary production as reported by the companies.

    It appears that the play in the Guernsey, Belmont, Noble and Monroe counties may be better than what Chesapeake Energy has found in Carroll and Columbiana counties, he said.

    Chesapeake, however, appears intent on drilling largely in the northern part of the Utica play under a joint agreement with Total, the French energy company

 

  • More Ford natural gas pickup trucks coming.  Westport Innovations Inc., the global leader in natural gas engines, announced that it will expand its product offerings with the introduction of natural gas powered versions of the Ford F-450 and F-550 Super Duty trucks in mid-2013. The new product additions will complement the already proven Westport WiNG™ System powered Ford F-250 and F-350 trucks.

 

  • Schlumberger moving into Tuscarawas County, OH.  It looks like it finally may be happening.  Schlumberger may have up to 400 people in its Tuscarawas location by April.   (Rumor)

 

  • PDC investing in Ohio.  PDC will invest approximately $53 million in the Utica Shale in Ohio to drill and complete five horizontal wells and to acquire small leasehold acreage tracts that are contiguous to the Company's existing position.

    In addition, the Company has budgeted approximately $48 million for its 50% share of PDC Mountaineer ("PDCM") joint venture in the Marcellus Shale for drilling and completing 14 wells and for midstream infrastructure. PDCM's capital budget is expected to be funded by the joint venture's cash flow and borrowings under the joint venture's revolving credit facility.

 

  • Chesapeake selling midstream assets.  Chesapeake Energy Inc. will sell midstream assets that include the Marcellus and Utica shale region for about $2.16 billion to Access Midstream Partners.

    The deal announced late Monday with Access (NYSE: ACMP) brings Chesapeake's recent midstream asset sales and planned sales' total to $4.875 billion, the company said. What will be sold to Access not only includes midstream assets in the Marcellus and Utica but also the Eagle Ford, Haynesville and Niobrara.

 

  • Exxon Mobil bullish on oil and gas production.  North America will become a net energy exporter by 2025, thanks to a surge in oil and gas production and rapid improvements in energy efficiency, Exxon Mobil Corp. predicts in its latest long-term energy outlook.

    The closely watched annual forecast of energy trends, set to be released Tuesday, concludes the growth of U.S. and Canadian oil and gas production has staying power and could lead to more international shipments of oil and gas, said Bill Colton, Exxon's vice president of corporate strategic planning, who led the study.

    Exxon predicts that an anticipated decline in coal usage by power plants will accelerate as more efficient natural-gas-fired plants are built. The Irving, Texas, company forecasts coal use will drop 33% from 2010 to 2025, substantially more than its previous 23% estimate.

 

  • Illinois promoting New Albany Shale Gas play.  Hydraulic fracturing in Southern Illinois has the potential to create more than 47,000 jobs and more than $9.5 billion in economic growth according to a study by the Illinois Chamber Foundation.

 

  • PA DEP rolling out CNG grant program.  DEP has rolled out a grant program to help companies convert their fleets to natural gas fueled vehicles.  This program will put more CNG vehicles on the road, reducing emissions and making things much more affordable at the pump.  The program is currently open for applications.

    Incorporating natural gas powered vehicles into our daily lives has been a “what comes first, the chicken or the egg” situation.  It’s hard to justify spending a lot of money on a Compressed Natural Gas (CNG) fueling station if there are no natural gas fueled vehicles to fuel.  Pennsylvania’s Department of Environmental Protection (DEP) has decided to take the first step to make this switch over to a cleaner burning fuel possible on a larger scale through a vehicle grant program made possible through Pennsylvania’s Act 13.

 

  • Range Resources commits to Marcellus Shale.  Range Resources plans to sell its stake in the region's Permian basin to help fund its shift toward Marcellus and other shale deposits.

    Range Resources Corp. said it asked Bank of America Merrill Lynch to market some of its holdings in the Permian basin in New Mexico and western Texas. Properties there are producing 18 million cubic feet of equivalent, with 30 percent of that existing as oil.

    Range said it would use the sale to help fund the $1.3 billion in capital spending for next year. About 85 percent of that will target oil and liquids-rich resources in the Marcellus shale play in the eastern United States and the Horizontal Mississippian play in northern Oklahoma and southern Kansas.

    The Marcellus shale play is one of the richest in the company and Range said those projects have the highest estimated rates of return in its portfolio. It has a combined 500,000 acres of holdings in the Marcellus Shale region.

Baker Hughes Rig Counts

  • Baker Hughes Rigs count for the December 14 reporting week.  PA is getting more active in the Utica
    • PA Marcellus 68 rigs – up 2
    • PA Utica 3 rigs – down 2
    • Ohio Utica 26 rigs – up 1 
    • WV Marcellus 26 rigs – 0 unchanged

Get your company ready for 2013 and become a ShaleDirectories.com member.

See you in the New Year!

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

Northeast Supply Enhancement