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Latest facts and a rumor from the Marcellus and Utica Shale

  • Bullish on drilling in Northern/Northern Tier, PA.  E&P companies in this part of PA have 2014 exploration budgets that are bigger than 2013. (Rumor)

  •  Stone Energy update.  Stone drilled six Marcellus shale wells during the second quarter of 2013 bringing the total to 16 horizontal Marcellus shale wells drilled in the first half of 2013.  Stone expects to drill 28 to 30 Marcellus shale wells during 2013.
  • Tuscarawas County, OH location for another major processing facility. Kinder Morgan Energy Partners and MarkWest Utica EMG, L.L.C announced they have signed a letter of intent to form a midstream joint venture (JV) to pursue two critical new projects to support producers in the Utica and Marcellus Shale region in Ohio, Pennsylvania and West Virginia. The first project consists of the development of a 400 million-cubic-foot-per-day (MMcf/d) cryogenic processing complex in Urichsville, Tuscarawas County, Ohio, utilizing an existing, 220-acre site that Kinder Morgan has under option. The second project consists of the development of an initial, 200,000 barrels-per-day (bpd), C2+ natural gas liquids (NGL) pipeline that originates at the planned JV processing facilities in Ohio and transports NGLs to Gulf Coast fractionation facilities.
  • Third LNG export permit approved. A third proposal to export U.S. natural gas won a government green light Wednesday, signaling the approval process is on a faster track despite some concerns that greater exports will raise natural-gas prices at home.

    The three projects approved by the Department of Energy would have the capacity to ship 5.6 billion cubic feet of gas a day, or about two trillion cubic feet a year. The U.S. produced about 25 trillion cubic feet in 2012.

    The latest approval was awarded to Lake Charles Exports LLC, a venture between U.K.-based BG Group PLC and Texas-based Energy Transfer Equity LP that plans to ship up to two billion cubic feet a day from Lake Charles, LA. The approval lasts for 20 years and permits sales to countries that lack free-trade agreements with the U.S., including some in Europe and Japan.

    Energy companies are seeking to take advantage of increased U.S. natural-gas production and robust demand around the world. More than a dozen export proposals are still pending before the Department of Energy.  DOE has now approved three with two in Louisiana and one in Texas.

    The energy company Dominion Resources Inc. is next in line with its Cove Point project in Maryland, which is seeking approval to ship one billion cubic feet of natural gas a day.
  • Gulfport up to 7 rigs.  In its quarterly report, Gulfport stated that it has 7 rigs in the Utica. 
  • PDC Energy could be adding rig.  PDC securities filings indicated that it could be adding a second rig to the Utica Shale.  PDC is drilling in Guernsey County.
  • Gulfport sending gas to the Midwest.  Gulfport Energy has signed 10-year agreements with Dominion East Ohio and Dominion Transmission Inc. to transport natural gas from eastern Ohio’s Utica shale to the Midwest and to connecting pipelines.

    The agreement calls for shipping natural gas from the MarkWest Energy’s gas-processing plant at Cadiz in Ohio’s Harrison County to Wisconsin, Illinois, Indiana and Michigan for the first time, said Steven Little, Gulfport’s vice president of midstream operations.
  • Carrizo in Guernsey County, OH.  In the Utica Shale, Carrizo recently spudded its first operated well, the Rector 1H in Guernsey County, OH. Carrizo is a newcomer to the Utica.  We’ll keep you informed of its activities.
  • Halcon’s plans in the Utica.  "One of the most productive wells in the Utica Shale Play" is how the head of a Houston-based energy company on Thursday described a Lordstown exploratory well.

    Halcon Resources, which has secured enough acreage to drill hundreds of horizontal wells in southern Trumbull and Mahoning counties, will invest significant time and dollars into the area in the next 12 to 18 months, said Chairman and Chief Executive Officer Floyd Wilson.

    "The Kibler 1H discovery well in Trumbull County came in at 2,233 barrels of oil equivalent per day, one of the top producers in the play, and we have room for about 500 wells in the area," Wilson said during a quarterly earnings conference call with investors and media. "Our spend is going to be around the Kibler area for the next 12 to 18 months for sure."

    The company has said it intends to operate at least one rig in the area for the rest of this year.

    Wilson declined to release details on how many acres of mineral rights the company has secured by county, but a prepared statement released by the company said it has 142,000 net acres leased or under contract in the Utica Shale Play. The Utica Shale is a large area of eastern Ohio and western Pennsylvania known to contain large amounts of natural gas and petroleum products deep underground.

    Wilson said plans by the company's midstream subsidiary Halcon Field Services, to build an oil storage and rail-loading facility in Lordstown's Ohio Commerce Center also is moving forward quickly.

Rig Count

  • Baker Hughes Rigs count for the August 2 reporting week. 
    • PA Marcellus 49 rigs down 2
    • PA Utica 2 rigs – unchanged
    • Ohio Utica 35 rigs – up 1
    • WV Marcellus 38 rigs  – up 11

PA Permits for August 2 to August 8, 2013

    County               Township          E&P Company
1. Beaver                Independence   Range
2. Beaver                Independence   Range
3. Bradford             Wilmont             Chesapeake
4. Fayette               Springhill           Chevron
5. Fayette               Springhill           Chevron
6. Greene               Washington       EQT
7. Greene               Washington       EQT
8. Greene               Washington       EQT
9. Greene               Washington       EQT
10. Greene             Washington       EQT
11. Indiana             Center              CNX
12. Indiana             Young               CNX 
13. Indiana             Young               CNX
14. Indiana             Young               CNX
15. Indiana             Young               CNX
16. Indiana             Young               CNX
17. Susquehanna   Gibson              Cabot
18. Washington      Hopewell          Range

 OH Permits – week ending August 3, 2013

    County         Township        E&P Companies
1. Belmont        Somerset        Gulfport
2. Belmont        Kirkwood         Hess
3. Carroll           Lee                 Chesapeake
4. Carroll           Lee                 Chesapeake
5. Columbiana   Franklin          Chesapeake
6. Harrison        Short Creek    Hess
7. Noble            Seneca            Antero
8. Noble            Seneca            Antero
9. Noble            Center            CONSOL
10. Noble          Center            CONSOL
11. Noble          Center            CONSOL
12. Noble          Center            CONSOL

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