BusinessCreator, Inc.

NewsLetters

As we start the New Year, we think 2013 is going to be a very active year for the industry.  Based on numerous conversations, articles and reports, everything points to more drilling and more pipelines.  The majors like BP and Shell are beginning to ramp up their activity.

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

  • Marcellus Shale Coalition taking on Matt Damon.  A Pittsburgh-based natural gas agency is striking back against the way its industry is portrayed in the Matt Damon movie "Promised Land."

    About 40 movie theaters statewide, including the Cinemark cinemas in Robinson Township, will run ads from the Marcellus Shale Coalition prior to screenings of "Promised Land," which was filmed in western Pennsylvania. The commercial will also screen at Cinemark in Center Township even though the film is not scheduled to show there.

    Opening today, "Promised Land" stars Damon as a natural gas salesman who visits rural towns to convince recession-stricken landowners to sell their drilling rights.

 

  • Triad and Eclipse getting active Magnum Hunter's wholly-owned subsidiary, Triad Hunter, LLC ("Triad Hunter") and Eclipse, collectively working together within the contract area on an equal and joint basis on approximately 1,950 net mineral acres with the objective of drilling approximately twelve horizontal wells in the Marcellus Shale and twelve horizontal wells in the Utica Shale over the next three years. We’ll try to find out where the drilling will be occurring.

 

  • Halcon in Trumbull County.  Halcon Resources has started work on drilling the first horizontal well in Trumbull County.  The rig is in Hartford Township.
    Last October, the company purchased 15,000 acres from Carrizo oil and Gas.

 

  • Crawford County, PA seeing activity.  Range Resources has a well off Pettis Road in East Fairfield Township, outside of Cochranton.

    Range Resources was also issued a permit for the well, the first Marcellus or Utica shale permit issued for Crawford County, by the Pennsylvania Department of Environmental Resources’ northwest regional office in Meadville on June 5.

    On Nov. 20 the regional DEP office issued a permit to SWEPI LP for its Byler 2083 4HD Well off County Line Road in East Fallowfield Township, south of Atlantic. SWEPI LP is a limited partnership with Shell Energy Holdings its general partner.

    But the Lippert and SWEPI wells aren’t the only potential Utica Shale wells in Crawford County.

    Range Resources has plans for another potential Utica Shale well in Greenwood Township while Halcon Resources of Houston, Texas, has proposed one in North Shenango Township, but no additional permits have been approved by DEP as yet.

 

  • Hillcorp is bringing 8 rigs in the Marcellus and Utica Shale region (Rumor). 
    Based on the article below, this rumor could be true.

 

  • Lawrence County PA activity.  Shale drilling got under way in the county this year with operations in New Beaver Borough and Pulaski and North Beaver townships.

    Hilcorp Energy and Shell Appalachia have drilled at least three sites for producing wells.

    In Pulaksi Township, Hillcorp has been drilling on the Laird Whiting property on Garner Road. It also is drilling off North Valley View Road and pipeline is being laid to connect those wells, according to information from Pulaski Township.

    Comments from Hillcorp.
    • “With regard to our operations in the area, we are still in the infancy stage of our growth and development. Right now our operations are largely focused in and around Pulaski Township.”
    • Future infrastructure development and drilling will be determined by results of current drilling activity, he wrote. The company is working to obtain permits for additional drilling next year, but has not yet pinpointed where more wells will be drilled.

In eastern Lawrence County, Shell Exploration and Production Co., has said the company plans more drilling next year.

Shell ended the year drilling its last two wells — one site in Slippery Rock Township in Butler County, and the Thomas Kephart well in North Beaver Township. Both are part of Shell’s exploration phase.

Shell has built four well pads in the county. In addition to Kephart, there is the Patterson well in Little Beaver Township, the Twentier property in Perry Township and the Mayberry property in Scott Township.

  • Marcellus production increasing.  According to the federal energy reports Marcellus wells in Pennsylvania and West Virginia now produce 7 billion cubic feet of gas per day. That’s about 25 percent of all shale gas production nationwide, and nearly double the Marcellus production of the previous year.

 

  • Shell opts for another six months to decide on Beaver County PA facility. The energy firm signed an extension to its land purchase agreement with Horsehead Corp., which owns a zinc plant currently occupying the 300 acres in Monaca that are slotted for a highly coveted Shell ethane cracker plant.

    The agreement was slated to expire at the end of 2012, and the announcement of an extension gives Shell until June to determine whether Monaca is suited for the facility.

    The ethane cracker plant, which will process natural gas products extracted from the Marcellus Shale, was announced earlier this year and kicked off a bidding war between Pennsylvania, West Virginia and Ohio.

 

  • Dominion Resources and Caiman Energy for joint venture.  Dominion Resources Inc. of Virginia and Caiman Energy II LLC of Dallas said they expect to close a $1.5 billion joint venture they are calling Blue Racer Midstream LLC by the end of the year.

    The venture will help companies gather, process, transport and sell natural gas liquids. The expanded pipeline system could be expanded to transport at least 2 billion cubic feet of natural gas per day.

    Officials at oil and natural gas producers making inroads locally in the Utica Shale Play, such as BP and Consol Energy, have expressed the need for more midstream infrastructure including pipelines to get the products to market.
    BP officials last week said while existing pipelines can be accessed, there is a need for growth in the long term.

 

  • Statoil to start drilling in the Marcellus.  Norwegian oil and gas company Statoil ASA (STO) said Wednesday it had purchased 70,000 acres of shale gas acreage in the U.S. Marcellus area for $590 million, and said it would become operator of the acreage.

    Statoil estimated its share of the resources at 300 million to 500 million barrels of oil equivalent. Its share of production at this stage was about 5,000 barrels of oil equivalent per day, but there was a significant ramp-up potential, it said.

 

  • BP making it moves in NE Ohio.  BP officials said that limited pipeline infrastructure of Trumbull County and northeast Ohio will quickly be overwhelmed by the development expected in the natural gas and oil industry.

    Some existing pipelines can be accessed, but the energy giant, which plans to begin drilling 10 experimental wells by April in Trumbull County, is spending time determining what is necessary for the long term.

    BP feels significant infrastructure is going to be required to bring the initial products to market. 'The limited infrastructure will quickly outpace the development.

    Energy company partnerships with midstream processing plants are being explored for Trumbull County, and already are planned and under construction in Mahoning and Columbiana counties.
    The possibility for construction of such a plant in Trumbull County is very real, the BP officials said Monday, but noted any talk is extremely preliminary.

    Leases for more than 84,000 acres of mineral rights in Trumbull County, signed with BP in March, carry five-year primary terms. That gives the company time to explore the area and move forward with plans. By next year, the officials said they expect to have invested $100 million in Trumbull County drilling.

    Drilling the initial wells has been a slow process for BP, largely because this is the company's first work in the Marcellus and Utica Shale areas, so developing relationships with contractors and suppliers have taken time.

    New leases still are being negotiated, and relationships with contractors are still being sought.

    BP commented that it is working really hard to use local providers for whatever services we they need.

 

  • Gulfport’s success leads to more acquisitions.  Gulfport has entered into a definitive agreement to purchase approximately 30,000 net acres in the Utica Shale in Eastern Ohio from Windsor Ohio LLC, an affiliate of Wexford Capital LP, for approximately $300 million, increasing Gulfport's leasehold interests in the Utica Shale to approximately 137,000 gross (99,000 net) acres.  Again, we’ll try to learn where these acres are.  The acres could be in Harrison, Belmont or Guernsey County where it has some very productive wells.

Upcoming Seminars

  • Altoona.  ShaleDirectories.com will be presenting two upcoming seminars.  We are partnering with Penn State Marcellus Center for Outreach and Research and Altoona Blair County Development Corporation to present a seminar in Altoona on January 22.  Chevron will be the featured presenter at this seminar.  Below is the link.

http://www.abcdcorp.org/marcellus/

  • Philadelphia.  Shale Directories.com, Penn State Marcellus Center for Outreach and Research are partnering with Delaware Valley Marcellus Association to present a seminar which will be featuring Cabot Oil and Gas, the leading producer in Northeastern PA.

http://www.marcellusdelval.org/inaugural-meeting/


Baker Hughes Rig Counts

  • Baker Hughes Rigs count for the January 4 reporting week. 
    • PA Marcellus 70 rigs – up 2 from previous report 12/18
    • PA Utica 3 rigs – unchanged
    • Ohio Utica 26 rigs – up 4 from previous report 12/18
    • WV Marcellus 26 rigs – 0 unchanged

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

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