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  • The midstream business is growing more rapidly than the drilling.  Some the drilling is on hold waiting for the pipelines.  I recommend that you begin to understand the midstream business to determine if opportunities exist for your company. 

    The funds to be spent on midstream business over the next 10 are staggering.  At our Midstream Conference in Canton in April, one of the midstream companies projected the midstream companies will spend $10 billion a year for the next 20 years in the Utica Shale.

    Let us know if we can help break into the midstream market.

Latest facts and a rumor from the Marcellus and Utica Shale

  • US Shale Oil and Gas reserves growing.  The amount of technically recoverable United States oil-and-gas reserves is 35 percent greater than in 2011, the U.S. Energy Information Administration (EIA) said Monday.

    The report credited the spike to new geologic and well-drilling results, as well as the adoption of hydraulic fracturing.

    The U.S. clocked in at second behind Russia in global technically recoverable shale oil reserves, with 58 billion barrels. It registered fourth behind China, Argentina and Algeria, with 665 trillion cubic feet of technically recoverable shale gas.

    While China, Argentina and Algeria may have more gas, these countries do not have the infrastructure and expertise to exploit the opportunity.  It’s going to be US companies going to these countries to recover the gas.
  • And it’s only going to grow.  The Allegheny Institute for Public Policy estimates that Pennsylvania royalty income from Marcellus Shale natural gas development amounted to $731 million last year, a 6,600 percent increase in five years.
  • Summit will be another midstream company to watch.  MarkWest Energy Partners will sell its natural gas gathering assets in Doddridge County WV to Summit Midstream Partners for $210 million cash, the companies announced on Wednesday.

    Rich-gas gathered by these assets is dedicated to MarkWest for processing at the Sherwood complex in Doddridge County. The transaction is expected to close this month, MarkWest said.

    "Summit is a high quality midstream operator and we are pleased to announce the sale of our rich gas gathering system in Doddridge County," said Frank Semple, chairman, president and chief executive officer of MarkWest. "This transaction provides MarkWest with ongoing financial flexibility to support our large set of processing, fractionation and NGL transportation projects that are currently being developed in the Marcellus and Utica Shale."

    The acquisition is Summit's initial entry into the Marcellus Shale, one of the largest, most active and prolific basins in North America, said Steve Newby, president and chief executive officer of Summit.
  • New Midstream Company in Washington, PA.  A Dallas-based company has won contracts for the construction of $91.9 million in pipelines, including a natural gas liquids pipeline from Washington, Pa., to Moundsville, W.Va., that will start this month.

    Primoris Services Corp. said the contracts by its Rockford Corp. subsidiary are in addition to ones they have in the Marcellus Shale regions of West Virginia and Pennsylvania, along with Washington.

    The biggest contract is for 50 miles of 12-inch steel pipeline to carry natural gas liquids between Washington, Pa., and Moundsville. Others are for a 19.7-mile pipeline near Clarksburg, W.Va., and projects in Montrose, Pa., and Pullman, Wash.
  • Halcon drilling results to date.  The Company has now drilled eight wells and is currently drilling its ninth well on its 140,000 net acre position in Northeast Ohio and Northwest Pennsylvania. These nine wells were drilled across approximately 70 miles and five counties. The status of each well is as follows:
    • The Phillips 1H (90% WI) in Mercer County, Pennsylvania, is now flowing to a sales pipeline and is undergoing flow optimization, including the installation of gas lift. This well was drilled to a total measured depth of 12,411 feet, had an effective lateral length of 5,360 feet and was completed with 20 frac stages.
    • The Allam 1H (100% WI) in Venango County, Pennsylvania, was the discovery well for the Northeast extension of the play and is currently shut-in awaiting infrastructure. This well was drilled to a total measured depth of 14,300 feet, had an effective lateral length of 5,580 feet and was completed with 21 frac stages.
    • The Brugler 1H (90% WI) in Trumbull County, Ohio, has been tested and is currently shut-in awaiting infrastructure. Production from this well should be placed into a sales pipeline in early July 2013. This well was drilled to a total measured depth of 10,959 feet, had an effective lateral length of 3,826 feet and was completed with 16 frac stages.
    • Testing on the Yoder 2H (90% WI) in Mercer County, Pennsylvania, commenced on May 30, 2013. This well was drilled to a total measured depth of 10,825 feet, had an effective lateral length of 3,810 feet and was completed with 14 frac stages.
    • The Kibler 1H (100% WI) in Trumbull County, Ohio, is currently resting and Halcón plans to begin testing the well on June 15, 2013. This well was drilled to a total measured depth of 14,257 feet, had an effective lateral length of 6,734 feet and was completed with 26 frac stages.
    • The Staab 1H (98% WI) in Crawford County, Pennsylvania, is currently resting and the Company plans to begin testing the well on July 11, 2013. This well was drilled to a total measured depth of 11,166 feet, had an effective lateral length of 4,374 feet and was completed with 17 frac stages.
    • The Pilgrim 2-3H (100% WI) in Mercer County, Pennsylvania, is currently being completed and Halcón plans to begin testing the well in early-August 2013. This well was drilled to a total measured depth of 16,185 feet, had an effective lateral length of 7,320 feet and is being completed with 31 frac stages.
    • The Davidson 1-1H (100% WI) in Mahoning County, Ohio, is currently waiting on completion.
  • Companies moving into South Avis, Clinton County PA. Two companies working in the Marcellus Shale natural gas industry have moved into the former Excel Homes site in South Avis.

    Midstream Company, Panhandler Pipe Co., is using part of the property to load and unload piping, and that Baker Corp. is using another part for tank and pump storage and maintenance.
  • Baker Hughes Rigs count for the June 7 reporting week. 
    • PA Marcellus 53 rigs – down 4
    • PA Utica 1 rig – unchanged
    • Ohio Utica 33 rigs – up 1
    • WV Marcellus 24 rigs  – up 1

PA Permits for June 6 to 12

    County               Township           E&P Company
1. Bradford             Standing Stone   Chesapeake
2. Indiana              Center                 CONSOL
3. Indiana              Center                 CONSOL
4. Indiana              Center                 CONSOL
5. Indiana              Center                 CONSOL
6. Indiana              Center                 CONSOL
7. Lycoming            Lewis                  Range
8. Lycoming            Lewis                  Range
9. Lycoming            Lewis                  Range
10. Lycoming          Lewis                  Range
11. McKean             Wetmore            Shell
12. McKean             Wetmore            Shell
13. McKean             Wetmore            Shell
14. Somerset          Somerset            Somerset Reg.
15. Susquehanna   Auburn                Chesapeake
16. Susquehanna   Auburn                Chesapeake
17. Susquehanna   New Milford         Southwestern
18. Wyoming          Lemon                 Chief
19. Wyoming          Lemon                 Chief
20. Wyoming          Lemon                 Chief
21. Wyoming          Lemon                 Chief

OH Permits – week ending June 6

    County           Township       E&P Companies
1. Ashtabula       Wayne            BEUSA
2. Carroll             Lee                 Chesapeake
3. Carroll             Lee                 Chesapeake
4. Carroll             Loudon           Chesapeake
5. Carroll             Lee                 Chesapeake
6. Carroll             Lee                 Chesapeake
7. Carroll             Lee                 Chesapeake
8. Carroll             Lee                 Chesapeake
9. Carroll             Washington    Chesapeake
10. Columbiana   Salem             Chesapeake
11. Guernsey      Spencer          EQT
12. Harrison        Cadiz              Hess
13. Harrison        Cadiz              Hess
14. Harrison        Cadiz              Hess
15. Harrison        Cadiz              Hess
16. Jefferson       Springfield      Chesapeake
17. Jefferson       Springfield      Chesapeake
18. Trumbull        Vernon           Brammer Eng.

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