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  • We’re moving to Saturday.  We have found that more of you have the time to read our newsletter if we send it out over the weekend.  Look for our newsletter now on Saturdays.
  • Permit Activity.  Take a good luck at our update on permitting at the end of the newsletter.  Some highlights:
    • Shell is moving into McKean County.  First time, I seen much activity in McKean County.
    • Chesapeake is ramping up drilling in PA.
    • Southwestern is a sleeper E&P take a look its permit activity.
    • OH Permitting is increasing.

Latest facts and a rumor from the Marcellus and Utica Shale

  • Shell slowly down in Tioga County PA.  Shell drilling activity has slowed down in Tioga.  Supposedly, Shell is evaluating local business and may be looking for better pricing.
  • EQT betting on Marcellus Shale. Pittsburgh-based EQT Corp. intends to focus its efforts on Pennsylvania's Marcellus shale.

    The company said it intends to sell off other assets to provide the needed capital to become a bigger player in shale drilling.  EQT is in the middle of a shift, raising cash to become an exploration- and production-focused company. The company four months ago announced a deal to sell its gas-utility arm for $720 million.

    “It has become so clear to us that the most attractive assets … are in the southwest part of the Marcellus shale” in Pennsylvania and West Virginia.
  • Cabot bullish in 2013. Cabot Oil and Gas (COG), another independent operating in the Marcellus also stated plans to accelerate activity in the area. A recent presentation from the company noted that during 2013 it planned to spud ~85 wells, up from ~70 wells in 2012.

    Cabot is also considering a sixth rig in the fall.
  • Rice Energy locking leases in Belmont County, OH.  Rice Energy is about lease 30,000 acres in Western Belmont County.  Look for Rice to quickly build a presence in Belmont County.
  • Spectra Energy in Belmont County. Midstream Company, Spectra Energy, is building a pipeline through Belmont County, OH. 
  • Aither getting closer to a cracker plant. Aither Chemicals LLC has its eye on building a natural gas-based cracker unit that would make polyethylene and related products at a location in Ohio, Pennsylvania or West Virginia.

    Access to newly discovered natural gas in the Marcellus Shale region is a key to the project for South Charleston, W. Va.-based Aither.

    "The purpose is to locate a cracker at the source of the raw material," spokesman Jason Keeling said in an April 18 phone interview. "We're still in the process of identifying various partners and looking at potential sites."

    In mid-2012, Aither held an "open season" in which potential customers and products for the proposed plant were identified. Global materials maker Bayer MaterialScience LLC worked with Aither on that process, which resulted in PE, ethylene, ethylene oxide, ethylene glycol and acetic acid being identified as the products that would be the focus of Aither's commercial production.
  • Carrizo plans for the Utica shale. Carrizo has 14,000 acres in the emerging Utica Shale, where it has the potential for 117 wells at 100 acre spacing and plans to drill its first well later this year.
  • Halcon drilling in the Utica in PA. Halcon Resources, a driller headquartered in Houston, TX, is active in half a dozen different shale plays in the U.S., including the Utica Shale. The surprise is that Halcon is drilling in the Utica in Pennsylvania as well as Ohio. Yes the Utica does underlay a large part of PA as well as eastern OH, but only a handful of Utica wells have been drilled in PA (from all drillers) because the prolific Marcellus Shale layer under PA has commanded the most attention.

    Halcon’s CEO Floyd Wilson says the company has two rigs drilling in the Utica now, but it’s still very early days for “one of the most exciting unconventional resources plays in the lower 48.” Two of the eight wells they’ve spud (i.e. drilling) in the Utica are now completed—both of them in PA.
  • Mark West Harrison County update.  These Cadiz facilities will be connected by pipeline to the under-construction fractionator near Hopedale, which was the destination of the "superload" tank that made its way through Steubenville April 7.

    MarkWest also processes gas at the Mobley site in Wetzel County and the Majorsville complex in Marshall County, working for producers such as Magnum Hunter, Consol Energy, Noble Energy and Range Resources.

    Construction and Customers

    Kevin Hawkins is not sure when the next MarkWest superload will make its way through the Upper Ohio Valley, but as the company's investor relations manager, he said roughly 3,000 people are now working in Ohio because of MarkWest. Most of these are construction workers who are building the company's vast network of pipelines, as well as the processors and fractionators.  Many of those workers are Ohioans.

    Hawkins said the Utica Shale "has a lot of potential," noting drillers have shown strong results in Belmont and Harrison counties.

    MarkWest has contracts to process gas for Gulfport Energy, Antero Resources, Petroleum Development Corp. and Rex Energy.

    The Gulfport gas that MarkWest is processing is abundant, as a single well near Barnesville could be producing as much as $100,000 worth of revenue per day.

    Also, Gulfport's Clay well, located in the area of U.S. 22 and Ohio 800, near the northern portion of Piedmont Lake in Harrison County - has produced fairly large quantities. These wells are in addition to Gulfport's "monster" - as labeled by energy investment firm Global Hunter Securities - Shugert well that yielded as much as 28.5 million cubic feet of gas per day from the Egypt Valley area near Morristown.

    MarkWest is able to complete these projects, in part, because of its agreement with the Energy & Minerals Group, which is contributing $950 million to the cause.

    According to company information, the Energy & Minerals Group is a private firm that focuses exclusively on investing in natural resources its members believe are integral to the global economy.

    According to MarkWest, the Cadiz processing complex will include a de-ethanization facility that will remove ethane from the gas stream, which will flow to the plant via the growing pipeline network. The ethane will then be placed into the ATEX Express ethane pipeline, which will transport the product from the Utica and Marcellus regions to the Gulf Coast for cracking.

    The propane, butane and other, heavier natural gas liquids will flow via pipeline from Cadiz to the Hopedale fractionator for further separation so that all products can be marketed individually.

Baker Hughes Rig Counts

  • Baker Hughes Rigs count for the April 19 reporting week.  
    • PA Marcellus 57  rigs – unchanged
    • PA Utica 3 rig – up 1
    • Ohio Utica 30 rigs – down 2
    • WV Marcellus 24 rigs  – unchanged

PA Permits for March April 13 - 25

     County                Township         E&P Company
1. Beaver                Big Beaver       Chesapeake
2. Beaver                Brighton           Chesapeake
3. Beaver                Ohioville           Chesapeake
4. Beaver                South Beaver   Chesapeake
5. Beaver                South Beaver   Chesapeake
6. Bradford              Herrick             Chesapeake
7. Bradford              La Raysville      Chesapeake
8. Bradford              Leroy                Chesapeake
9. Bradford              Stevens            Southwestern
10. Bradford            Stevens            Southwestern
11. Bradford            Stevens            Southwestern
12. Bradford            Stevens            Southwestern
13. Bradford            Stevens            Southwestern
14. Bradford            Stevens            Southwestern
15. Bradford            Stevens            Southwestern
16. Bradford            Ulster               Chesapeake
17. Butler                Clearfield          XTO (Exxon)
18. Butler                Clearfield          XTO (Exxon)
19. Butler                Clinton              Penn Energy
20. Lycoming           Cogan Station   Anandarko
21. Lycoming           Cogan Station   Exco Resources
22. Lycoming           Cogan Station   Exco Resources
23. Lycoming           McHenry            PA Gen Energy
24. Lycoming           McNett              Carrizo
25. Lycoming           Mifflin                Anadarko
26. Lycoming           Mifflin                Anadarko
27. Lycoming           Mifflin                Anadarko
28. Lycoming           Mifflin                Anadarko
29. Lycoming           Mifflin                Anadarko
30. Lycoming           Mifflin                Anadarko
31. McKean              Hamlin              Shell
32. McKean              Hamlin              Shell
33. McKean              Hamlin              Shell   
34. McKean              Sergeant          Seneca Resources
35. Mercer                Perry                Shell   
36. Susquehanna    Auburn              Chesapeake
37. Susquehanna    Hartford            Southwestern
38. Susquehanna    Hartford            Southwestern
39. Susquehanna    Hartford            Southwestern
40. Susquehanna    Hartford            Southwestern
41. Susquehanna    Lathrop             Chief
42. Susquehanna    Lathrop             Chief
43. Washington       Carroll               Chesapeake
44. Washington       Independence   Range
45. Washington       Independence   Range
46. Washington       Independence   Range
47. Washington       Somerset           Rice
48. Westmoreland   Derry                  WPX
49. Westmoreland   Derry                  WPX
50. Westmoreland   Derry                  WPX
51. Wyoming            Lemon               Chief
52. Wyoming            Lemon               Chief
53. Wyoming            Lemon               Chief

OH Permits – week ending April 20

      County      Township       E&P Companies
1. Carroll              Lee             Chesapeake
2. Carroll              Lee             Chesapeake
3. Carroll              Lee             Chesapeake
4. Carroll              Perry           Chesapeake
5. Carroll              Loudon        Chesapeake
6. Carroll              East             Chesapeake
7. Carroll              East             Chesapeake
8. Guernsey         Richland       Carrizo
9. Harrison           Freeport       Gulfport
10. Harrison         Freeport       Gulfport
11. Harrison         Freeport       Gulfport
12. Washington   Adams           PDC Energy
Take advantage of a bullish 2013 and become a member.

Joe Barone 610.764.1232
Vera Anderson 570.337.7149
Andrea Bagnell 610.256.1898

Northeast Supply Enhancement