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Latest facts and a rumor from the Marcellus and Utica Shale

  • Anadarko bringing rig back to OH.  Anadarko may be bringing a rig back to Oh probably to Muskingum County. (Rumor)

    Last year this time, Anadarko pulled its rigs out of OH.  Anadarko had hit oil in Muskingum County, but there was not enough gas pressure to get the oil out economically.  It said that it may be back next year with better technology.  Maybe, Anadarko has better technology.


  • Hilcorp’s activity is picking up in Mahoning County OH.  Hilcorp Energy Co. plans to drill at least five more horizontal wells at its Carbon Limestone site in Poland Township, according to records from the Ohio Department of Natural Resources.

    ODNR lists five new wells for which it issued permits July 17 for Hilcorp's CLL2 pad in Poland that target the Utica/Point Pleasant shale formations in eastern Ohio.

    Hilcorp, based in Houston, now holds 12 permits to drill at the Carbon Limestone site from two separate well pads. According to ODNR, the company has thus far drilled a single well there.

  • EQT drilling in the Upper Devonian.  EQT has decided to boost the number of Upper Devonian wells it drills this year by 11 to 22, Porges said. At the same time, it is reducing the number of Marcellus wells it will drill by 11 to 146, he said. Activity level for the year will remain unchanged, but the company will get some built-in efficiencies because it can drill both of these formations from the same pad, with the same rigs and completion equipment.

    Notice the efficiencies drilling from one well pad.

  • MarkWest projects expanding for the next 5 years.  MarkWest has invested $2.2 billion into pipelines, processing and fractionation plants in the region. The fractionation plant at Hopedale served as the destination of the six “superloads” that recently made their way through Steubenville.

    “There is plenty of gas to go around,” Greg Sullivan, area manager for MarkWest, said. “We probably have enough work here to expand for another five years.”

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

    Process and Ethane Cracker

    At the Cadiz processing complex, MarkWest lowers the pressure of the gas stream to separate the gases once it is piped into the facility.

    The Cadiz processing complex will soon include two de-ethanizers, which will remove ethane from the gas stream. Currently, the company has three options for its ethane: send it to Canada for cracking via the Mariner West Sunoco pipeline; send it to the Gulf Coast for cracking via the ATEX Express pipeline; or send it to the Gulf Coast for cracking over the Bluegrass Pipeline.

    “Because there is no cracker in this region, this is what we can do with our ethane,” McHale said.

    Sullivan and McHale are confident there is more than enough supply of ethane in the Utica and Marcellus shale regions to justify building cracker plants. McHale said that MarkWest projects it will be able to de-ethanize 200,000 barrels of ethane daily by 2017.

    “There is plenty of ethane to support several crackers. Bring more,” Sullivan said.

    There is more than enough gas for the crackers, but can an infrastructure be built that can compare to the Gulf Coast.

  • Cabot adds sixth rig in NE PA.  Cabot Oil & Gas Corporation announced the addition of a sixth rig in its Marcellus Shale drilling program to establish an early start to the 2014 program. "Based on a variety of factors including our continued well performance improvements, better visibility on infrastructure projects, our near-term free cash flow profile and our views on future natural gas demand, we have made the decision to bring a sixth Marcellus rig into the field," said Dan O. Dinges, Chairman, President and Chief Executive Officer. "We will spud the first well utilizing the sixth rig in August and while no impact is expected on 2013 production, as additional wells will not be turned-in-line until next year, this effort will provide a positive impact on 2014 production growth."

    Tyler County WV can’t keep up.  A log jam at the Tyler County records room where title searchers are tracing land and mineral ownership because of the Marcellus Shale natural gas boom may be aided by an opinion by the West Virginia attorney general.

    Tyler County Prosecutor Luke Furbee asked Attorney General Patrick Morrisey about whether the county commission can accept private donations to extend the hours of operation at the record room of the county clerk or digitize the records stored there as long as the donation is unsolicited and given to the county as a whole and not to an individual.

    We’ll try to learn which companies are seeking permits.

  • Penn College to Offer Tuition-Free Natural Gas Career Training Supported by Marcellus Shale Impact Fees.  With Act 13 (impact fee) funding recently approved by the Lycoming County Commissioners, Pennsylvania College of Technology will provide $50,000 in ShaleNET scholarships to 50 veterans, unemployed and underemployed residents of the county. The college will offer tuition-free training – $1,000 per student – to provide the basic skills and certifications required for entry-level employment in the oil and natural gas industry. … “This is a substantial investment in the future for residents of Lycoming County, especially for veterans, unemployed and underemployed persons. This action underscores the priority the county and Penn College place on training our residents for lifelong careers in the oil and gas industry – careers that pay family-sustaining wages and enhance the quality of life for individuals, families and the county.” The average annual wage for Marcellus Shale core industries is approximately $8
    3,000, according to the state Department of Labor and Industry.

  • More wells from fewer rigs.  Multiwell pad drilling is now employed in about half of well activity across key US basins, and that proportion should tick higher in coming quarters as more operators shift to that practice, which drives increased drilling efficiencies, Halliburton's CEO said Monday.

    And efficiency gains could result in more well activity even with a relatively flat US rig count that is widely expected for the rest of 2013, Dave Lesar said in a quarterly earnings conference call.

    The reason: greater efficiencies per well eventually whittle down the number of rigs a given operator needs to get the job done.

    Pad drilling allows multiple wells to be drilled from a single site instead of having to shut operations and move rigs from well site to well site. The practice has been around for several years although more and more operators have migrated toward it, especially in the past year or so.

    "Drilling efficiencies in the trend toward multiwell pads are driving a more robust well count," Halliburton Chief Operating Officer Jeff Miller said.

    "Also, in some cases, operators are increasing the number of stages on horizontal wells -- as many as 40 stages per lateral in some cases in the Marcellus [Shale]," a giant, mostly natural gas field in Pennsylvania and some adjacent states, Miller said.

  • Gulfport expands lease holdings.  Gulfport Energy provided an update on its Utica Shale activity ahead of the release of its second-quarter earnings. The Oklahoma City-based company said it has added approximately 8,000 acres to its holdings in eastern Ohio’s Utica Shale, giving it a total of 145,000 acres in the region.

  • Halcon midstream building in Lordstown, OH.  An energy company is planning to build a $70 million midstream oil storage and rail-loading terminal in Lordstown.

    Halcon Field Services, a subsidiary of Halcon Resources, said they plan to build the facility at the Ohio Commerce Center 480-acre industrial site that already houses warehouse and distribution centers.

    Halcon will use the new facility to ship oil they’re producing through the Utica Shale play to markets outside the production area, Halcon said.

    The first phase of the three-stage project is expected to be completed sometime during 2014. The entire project will eventually include four bay truck racks, a 20-rail car loading platform, three stabilizers and six storage tanks.

    The company said the project will create 50 jobs and 30 fulltime jobs.

    “The plan is to unload up to 12 trucks per hour at the proposed truck rack,” the company’s statement says. “The amount of truck traffic will depend on a number of factors, including market conditions and the quantity and quality of wellhead production, which is in the early stages at this point.”

  • Major pipeline reverses flow to go west.  What a difference a year makes. Last August, RBN Energy President Rusty Braziel said that the Rockies Express Pipeline, which originates in Rio Blanco County, Colorado and sends gas to Monroe County, Ohio, was in danger of drying up because there’s so much shale gas coming from the Marcellus. His prescription?

    In a press release, REX announced they have a binding agreement with an unnamed “large Utica Shale producer” who wants to use the pipeline to ship 200,000 decatherms of processed natural gas per day to the Midcontinent region of the country. That is, REX is reversing the flow for at least part of the pipeline. And who might the unnamed “mystery” producer be? It could be Chesapeake.

Rig Count

  • Baker Hughes Rigs count for the July 19 reporting week. 
    • PA Marcellus 5 rigs – up 1
    • PA Utica 2 rig – unchanged
    • Ohio Utica 34 rigs – down 1
    • WV Marcellus 26 rigs  – up 2

PA Permits for July 19 to July 26

    County             Township         E&P Company
1. Armstrong         West Franklin   Penn Energy
2. Greene              Center              CNX
3. Greene              Washington      EQT
4. Susquehanna     Auburn            Chief
5. Susquehanna     Auburn            Chief
6. Westmoreland    Sewickley        Chevron
7. Westmoreland    Sewickley        Chevron

OH Permits – week ending July 13

    County        Township           E&P Companies
1. Carroll           Perry                 Chesapeake
2. Carroll           Perry                 Chesapeake
3. Carroll           Perry                 Chesapeake
4. Carroll           Perry                 Chesapeake
5. Carroll           Fox                    Chesapeake
6. Carroll           Perry                 Chesapeake
7. Carroll           Perry                 Chesapeake
8. Guernsey      Londonderry      Gulfport
9. Guernsey      Londonderry      Gulfport
10. Guernsey    Londonderry      Gulfport
11. Guernsey    Londonderry      Gulfport
12. Guernsey    Londonderry      Gulfport
13. Guernsey    Londonderry      Gulfport
14. Guernsey    Londonderry      Gulfport
15. Guernsey    Londonderry      Gulfport
16. Guernsey    Londonderry      Gulfport
17. Harrison      Rumley              Chesapeake
18. Harrison      Rumley              Chesapeake
19. Harrison      Rumley              Chesapeake
20. Mahoning    Poland               Hilcorp
21. Mahoning    Poland               Hilcorp
22. Mahoning    Poland               Hilcorp
23. Mahoning    Poland               Hilcorp
24. Mahoning    Poland               Hilcorp

The second half of 2013 is going to be active.  Become a member of to tap into this future growth.

Joe Barone 610.764.1232
Vera Anderson 570.337.7149
Andrea Bagnell 610.256.1898

Northeast Supply Enhancement