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  • Permit Activity. 
  • PA -- 20 permits; Shell is getting active in Butler; Talisman is back in Tioga County
  • OH -- 25 permits a record number; Gulfport in Belmont and Harrison, PDC in Guernsey and Range is in Carroll.
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    Latest facts and a rumor from the Marcellus and Utica Shale

    • NiSource moving gas for XTO (Exxon).  NiSource Midstream Services announced today that its Big Pine Gathering System has initiated service in support of its long-term gathering agreement with XTO Energy Inc. The Big Pine Gathering System is a 57-mile, 20- and 24-inch gathering system located in the heart of the Marcellus Shale. The system is designed to provide gas gathering and residue gas takeaway services for natural gas producers.
       
    • XTO’s been busy.  XTO Energy Inc. opened a new facility in Butler County on Tuesday that will recover natural gas liquids from Marcellus Shale drilling.

      The Renfrew plant encompasses 340 acres, 40 miles of connecting pipeline and two gas compressor stations. It is the first of its kind in the Appalachia region for XTO, a Fort Worth, Texas, Energy Company that is a subsidiary of ExxonMobil.

      "The facility will add value to XTO and Butler County," said Tim McIlwain, senior vice president, production operations, stressing the economic growth that the plant would bring to southwestern Pennsylvania.

      XTO plans to employ 15 at the facility, "a mixture of local hires and transfers from other regions," according to J.D. Estes, the company's media adviser.
    • Chesapeake staying aggressive with the help from Statoil.  Analyzing Evaluate Energy’s recently released 2013 capital expenditure and average well cost data for the major US shale plays, it becomes clear that foreign companies will have a huge influence on how the industry develops over the coming year. Joint ventures involving foreign investors, which have been entered into over the past few years, have budgeted to spend big this year, and will be amongst the biggest spenders in the country for the second year in a row. It will be a big year in particular for Chesapeake Energy (NYSE: CHK), a company with foreign joint venture partners in five US plays. The company and its various partners are estimated to be the biggest spenders among companies with available drilling plan data in three of those five plays in 2013.

      Marcellus
      This play is still very much a US stronghold in terms of ownership, and this year’s drilling capex budget graph still shows this. However, Chesapeake’s arrangement with Norwegian major Statoil (STO) is estimated by Evaluate Energy to the biggest budgeted spender in the play for the second year in a row, and to be drilling the most wells.

    Capex_Bubgets.jpg

    These, and especially Chesapeake’s, may seem high spends in the current climate for what is primarily a gas play, but the Marcellus Shale has seen lots of drilling completed and data collected in the past five years, meaning the play has become a very low-risk environment close to a crucial demand center, with reasonably low average well costs. Range Resources Corp. (RRC), despite being the lowest of the “big-spenders” on the above chart, are drilling at an average cost of $5 million per completed well, $2.7 million cheaper than the average for the play, as estimated by Evaluate Energy.

    • Williams continues heavy pipeline activity.  Williams Partners LP and its joint-venture partners are seeking federal approval for their Constitution Pipeline to move natural gas from the Marcellus Shale into eastern U.S. markets.

      The Constitution subsidiary announced Thursday that it filed an application with the Federal Energy Regulatory Commission to build the 122-mile pipeline from Pennsylvania to connect with systems in New York. Cost of the project is estimated at about 683 million.

      Williams' partners on the joint venture include Cabot Oil and Gas Corp., Piedmont Natural Gas Co. and WGP Holdings Inc. Williams, which will operate the line, has a 51-percent stake in the pipeline, while Cabot and Piedmont have 25 percent and 24 percent interests, respectively, according to previous news reports.

      Cabot and Williams first announced the pipeline in February 2012 with a project construction starting date next year. The Constitution system is expected to go into service by spring 2015.
    • Antero’s IPO could generate more funds for drilling.  Antero Resources Corp., a natural gas production and distribution company, filed for a $1 billion initial public offering of its common stock. The Denver, Colorado-based company is controlled by Warburg Pincus LLC.
    • Antero’s investing heavily in the Marcellus and Utica.  Antero's Board of Directors has approved an 18% increase in the company's 2013 capital budget to $1.95 billion, including $1.2 billion for drilling and completion.  During 2013, Antero plans to operate an average of 15 drilling rigs in the Marcellus Shale and two drilling rigs in the Utica Shale.

      Antero plans to drill approximately 135 horizontal wells in the Marcellus Shale in 2013 as well as 21 horizontal wells in the Utica Shale.  As of May 31, 2013, Antero drilled 51 wells in the Marcellus and six wells in the Utica Shale in 2013.  The Company has 40 wells in the Marcellus and five wells in the Utica Shale that are in various stages of drilling, waiting on completion and completing.  Antero is currently operating 15 drilling rigs in the Marcellus Shale and two drilling rigs in the Utica Shale.
       
    • CONSOL UPDATE.  Consol Energy began jointly developing the Utica shale with Hess Energy. Hess and Consol will be working on projects in Jefferson, Harrison, Belmont and Guernsey counties. CONSOL has five wells drilled in Noble County, two in Tuscarawas and three in Mahoning. In addition, wells are planned for Portage County, and the company also has acreage leased in Trumbull County.

      Consol plans on 11 wells and Hess plans 16 wells in 2013.

      So far, Consol Energy has drilled 200 horizontal shale wells, between the Marcellus and Utica, and there are 640 active gas-related permits issued to Consol.
    • Ohio Midstream Update. (Thanks Farm and Dairy).  Experts say approximately $130 to $210 billion will need to be spent through 2030 on midstream natural gas infrastructure in order to meet market needs.
      Lines in progress

      MarkWest Energy Partners has a total of 52 lines planned or in progress. They are connected to several drilling companies, including Gulfport Energy and Antero Resources and others in the southern portion of the Utica in Ohio, according to MarkWest Energy Partners.

      The company is also constructing two cryogenic processing facilities; one in Harrison and one in Noble County.

      Cardinal Gas Services has 50 lines planned or in the construction process throughout Ohio.  Cardinal Gas Services is involved with a project with Caiman Energy II, LLC and Dominion to form a $1.5 billion joint venture that provides Midstream services in the Utica shale.

      Utica East Ohio Midstream has 14 lines planned or in progress, Halcon has three, Mountain Gathering has two planned and a handful of pipeline companies have one line each.

      There has been a rapid development of pipelines by a company called Blue Racer Midstream, which is a partnership between Dominion Gas and Caiman Energy. Blue Racer Midstream is concentrating on its western connector that will directly connect wells in Noble, Washington, Guernsey and Tuscarawas counties to the main line in West Virginia where natural gas and liquids can be processed.

      The Hickory Bend Project in Mahoning County will be a $300 million investment by NiSource. It is currently under development and is expected to be gathering by the second quarter of 2013. It will be 50 miles of 20- to 24-inch gathering line, and will be the first mover of gas in northeast Ohio and western Pennsylvania.

      According to PUCO, many of the lines are only approximately one mile. Others will be built 17 miles long and will cross 66 properties. The length of the lines and how many properties it crosses depends on what kind of line it is and where it is headed.

    Rig Count

    • Baker Hughes Rigs count for the June 14 reporting week. 
      • PA Marcellus 53 rigs – unchanged
      • PA Utica 1 rig – unchanged
      • Ohio Utica 32 rigs – down 1
      • WV Marcellus 22 rigs  – down

    PA Permits for June 13 to 20

        County               Township       E&P Company
    1. Bradford             Franklin           Chesapeake
    2. Bradford             Franklin           Chesapeake
    3. Bradford             Terry               Chesapeake
    4. Butler                 Clay                 Shell
    5. Butler                 Clay                 Shell
    6. Butler                 Clay                 Shell
    7. Butler                 Clay                 Shell
    8. Butler                 Clay                 Shell
    9. Butler                 Clay                 Shell
    10. Butler               Clay                 Shell
    11. Greene             Washington     EQT
    12. McKean             Keating           Chesapeake
    13. Sullivan             Cherry            Chesapeake
    14. Susquehanna   New Milford     Southwestern
    15. Susquehanna   Rush               Chesapeake
    16. Tioga                Elk                   Ultra Resources
    17. Tioga                Hamilton          Talisman
    18. Tioga                Hamilton          Talisman
    19. Tioga                Hamilton          Talisman
    20. Tioga                Hamilton          Talisman
    21. Tioga                Hamilton          Talisman
    22. Washington     Cross Creek     Range
    23. Washington     Donegal            Range
    24. Washington     Donegal            Range
    25. Washington     Donegal            Range
    26. Wyoming         Meshoppen       Chesapeake
    27. Wyoming         Meshoppen       Chesapeake
    28. Wyoming         North Branch     Chesapeake
    29. Wyoming         Windham           Chesapeake   


    OH Permits – week ending June 15

        County          Township       E&P Companies
    1. Belmont         Somerset        Gulfport
    2. Belmont         Somerset        Gulfport
    3. Belmont         Somerset        Gulfport
    4. Belmont         Somerset        Gulfport
    5. Belmont         Somerset        Gulfport
    6. Carroll            Lee                 Chesapeake
    7. Carroll            Lee                 Chesapeake
    8. Carroll            Lee                 Chesapeake
    9. Carroll            Perry              Chesapeake
    10. Carroll          Fox                 Chesapeake
    11. Carroll          Perry              Chesapeake
    12. Carroll          Washington    Rex
    13. Carroll          Washington    Rex
    14. Carroll          Washington    Rex
    15. Carroll          Washington    Rex
    16. Carroll          Washington    Rex
    17. Guernsey      Wills               PDC
    18. Guernsey      Wills               PDC
    19. Harrison        Moorefield      Gulfport
    20. Harrison        Moorefield      Gulfport
    21. Harrison        Moorefield      Gulfport
    22. Noble            Seneca           Antero
    23. Noble            Seneca           Antero
    24. Noble            Seneca           Antero
    25. Trumbull        Warren          Halcon
    26. Columbiana   Salem            Chesapeake

    Take advantage of a bullish 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

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