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  • Permit Activity. 
    • PA activity is down this week compared to the past two weeks
    • Triad Hunter has its first three leases in OH
    • Monroe County, OH has its first leases in

Latest facts and a rumor from the Marcellus and Utica Shale

  • Trucking industry moving to LNG.  Now the trucking industry, with its millions of 18-wheelers moving products like potato chips, underarm deodorant and copy paper around the country, is taking a leap forward in switching from petroleum to cleaner-burning natural gas. And if natural gas remains cheap, consumers may benefit again.

    This month, Cummins, a leading engine manufacturer, began shipping big, new engines that make long runs on natural gas possible. A skeletal network of refueling stations at dozens of truck stops stands ready. Major shippers like Procter & Gamble, mindful of both fuel costs and green credentials, are turning to companies with natural gas trucks in their fleets.

    And in the latest sign of how the momentum for natural gas in transportation is accelerating, United Parcel Service plans to announce in the next few days that it will expand its fleet of heavy 18-wheel vehicles running on liquefied natural gas, or L.N.G., to 800 by the end of 2014, from 112. The vehicles will use the new Cummins engines, produced under a joint venture with Westport Innovations.

    U.P.S., like the rest of the industry, still has a long way to go in the conversion, but the company hopes to make natural gas vehicles a majority of its new heavy truck acquisitions in two years.

    The company is benefiting from incentives provided by various states and the federal government, which offer tax credits and grants for installing natural gas fuel stations and using vehicles fueled by natural gas.
  • EQT will have strong drilling activity in 2013.  EQT drilled 33 Marcellus wells in the quarter, as well as two in the Utica Shale of Ohio and six in the Upper Devonian of Appalachia. The company plans to drill 153 Marcellus wells this year as part of a strategic effort to narrow its focus to gas drilling.

    EQT’s drilling goals of 153 is not too far behind Chevron which has a goal on 165 wells in 2013.  The bottom line is – drilling activity is definitely picking up.
  • Southwestern becoming bigger player in Northern PA.  Southwestern Energy Co. (SWN) has agreed to buy natural gas properties in Pennsylvania's Marcellus Shale from Chesapeake Energy Corp. (CHK) and its partners for about $93 million, enhancing the energy company's footprint in the region.

    The acquisition of about 162,000 net acres is in Susquehanna, Wyoming, Tioga and Sullivan counties. Current net production from the properties is about two million cubic feet per day from 17 gross wells.

    When the deal closes, Southwestern will have about 337,000 net acres in the Marcellus Shale.
  • Chevron planning on drilling in Cambria County, PA.  Chevron officials say they expect to have a state mining permit soon that will allow them to drill an assessment well on a multi-acre site alongside Blackburn Road. 

    If all goes as planned, construction – primarily excavation work – will begin in August or September on a sportsmen’s club property to get the pad site ready for drilling, said Mikal Zimmerman, Chevron’s policy and public affairs officer.

    “We’re starting with one well. And adding this well. ... And the information we gather from it will help us determine how to proceed next,” said Zimmerman, noting the gas the well yields will give Chevron officials the “hard data” they need to decide whether more wells should follow nearby.
  • Antero continues to expand in the Marcellus and Utica.  This year, Antero plans to operate an average of 12 drilling rigs in the Marcellus Shale and two rigs in the Utica Shale. These 14 rigs will be supplemented by four shallow rigs that drill the vertical section of some horizontal wells down to the point where the wells turn horizontally, about 6,000 feet underground.

    Antero's net production in West Virginia and Ohio is expected to increase by as much as 138 percent in 2013. In addition to its Belmont County operations, Antero is working in Noble and Monroe counties.
    Antero just signed a lease with the town of Barnesville in western Belmont County, OH for 63 acres.
  • NiSource expanding in Mahoning County.  A top executive at NiSource Midstream Services LLC says that the first well serving the $300 million Hickory Bend gas gathering and processing project should be in operation in the next few weeks as construction on the system's cryogenic plant in southern Mahoning County accelerates, as does the potential for expansion.

    "We're developing an area that will allow for multiple plants to be sited," NiSource chief operating officer Chad Zamarin told The Business Journal Tuesday. "When we do come back and expand the location, it can be done at very little impact."

    Preparation for the $150 million plant is under way with 200 local excavators, operating engineers and laborers on site near the intersection of Middletown and Stateline roads in Springfield Township, Zamarin said. He was in town to meet with local officials and reporters to discuss the project.

    "We believe our initial $300 million project has the potential over the next few years to be $1 billion worth of investment in this very footprint," Zamarin said.

    As work continues on the new plant, the number of local contractors and members from the building trades unions tradesmen at the site could grow to about 1,000, he reports.
  • EPA gives fracking a win.  Hydraulic fracturing has generated many byproducts in recent years – more jobs, more tax revenue for city and state governments, more domestically produced natural gas and crude oil, and of course, more controversy.

    Though opponents have argued that fracking substantially contributes to greenhouse gas emissions, new estimates from the Environmental Protection Agency show that the leakage of methane – a greenhouse gas – from wells, pipelines and other infrastructure is much lower than previously believed, thanks in large part to better pollution controls implemented by the industry itself, according to the Associated Press. Recently released EPA estimates of methane emissions between 1990 and 2010 are 20 percent less than previous estimates, the AP reported, even as natural gas production has grown by almost 40 percent during the same period.

    Are people in Washington starting to see the value and opportunity of shale gas and oil?
  • Chevron to build regional HQ in Pittsburgh area. Chevron is one of the largest producers of Marcellus Shale natural gas, with holdings in Pennsylvania, West Virginia, and Ohio. The company says a final decision on the use of the land will be made later this year.

    Chevron says it already employs about 650 people in Pennsylvania. Nearly 400 of those jobs are already based in Pittsburgh-area office buildings.
  • XTO and Rex active in Butler County, PA.  Butler shale drilling Natural gas development in Butler County is thriving and is poised for more success through this year, according to gas developers.

    Rex Energy plans to drill 19 wells in the county in 2013, four of which already have been completed, according to Mike Endler, senior director of civil and environmental engineering for Rex Energy’s Appalachian Region.

    Overall, Rex Energy has about 60 wells producing gas in the county, Endler said.

    By comparison, Rex Energy’s other major operations area in the region in Ohio is scheduled to have only seven wells drilled this year.

    “Butler County remains Rex’s core operating area. 

    XTO Energy, another of the county’s most active exploration and production companies, plans to drill about 30 more wells this year and complete miles of pipelines, said Lorie Jackson, a company spokesman.

    XTO also plans to open compressor plants this year in Jefferson and Forward townships, and it opened a liquids recovery plant in Penn Township on Thursday. Rex Energy will not open any facilities, since it has an agreement with MarkWest Liberty Midstream and Resources to gather and process all gas Rex produces in the county.

Baker Hughes Rig Counts

  • Baker Hughes Rigs count for the April 26 reporting week.  
    • PA Marcellus 56  rigs – down 1
    • PA Utica 3 rigs – unchanged
    • Ohio Utica 31 rigs – up 1
    • WV Marcellus 24 rigs  – unchanged

PA Permits for March April 26 to May 1

    County            Township          E&P Company
1. Greene              Aleppo            Chesapeake
2. Greene              Aleppo            Chesapeake
3. Greene              Morgan           EQT
4. Greene              Washington     EQT
5. Greene              Washington     EQT
6. Washington       Smith              Range
7. Washington       Somerset        Range
8. Westmoreland    Bell                 Consol

OH Permits – week ending April 20

    County         Township    E&P Companies
1. Carroll              Lee           Chesapeake
2. Carroll              Union        Chesapeake
3. Carroll              Union        Chesapeake
4. Carroll              Lee           Chesapeake
5. Carroll              Lee           Chesapeake
6. Carroll              Lee           Chesapeake
7. Columbiana      Franklin    Chesapeake
8. Monroe             Seneca     Antero
9. Monroe             Seneca     Antero
10. Washington    Aurelius    Triad Hunter
11. Washington    Aurelius    Triad Hunter
12. Washington    Aurelius    Triad Hunter

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