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NewsLetters

  • Permit Activity. 
    • PA – 0 permits; We don’t know if no permits were issued or if there’s problem with DEP’s web site.  We’ll let you know what we find out next week.
    • OH – 5 permits; Monroe County is starting to see activity.
  • Expo activity.
  • Advertising in Facts & Rumors – due to many inquiries, we have decided to accept advertising in Facts & Rumors.  Our newsletter goes to over 2500 businesses in the oil and gas industry in the Marcellus & Utica Shale region.  If you are interested in placing a banner ad in the newsletter, please contact me. 

Latest facts and a rumor from the Marcellus and Utica Shale

  • Drilling getting more efficient.  Analyst Erika Coombs with Bentek Energy reports rigs in the Bakken and Eagle Ford are drilling almost two wells per month, up from 1.4 wells per month a year ago and one well a month in 2011.

    In my travels throughout the PA, OH and WV, I hear one constant comment, “Drilling is getting more efficient.”  This information certainly supports the statement.
  • LNG ready to go overseas.  When President Obama made an off-hand remark two months ago regarding the economic export opportunities provided by America’s unprecedented natural gas production (as a byproduct of the current revolutionary oil shale development), it signaled a green light for full speed ahead in the construction of liquid natural gas terminals.

    Although not noted by any aspects of the national media at that time, it was obvious that the combined efforts of the hostile Environmental Protection Agency, in conjunction with major U.S. chemical companies, hoping to keep natural gas prices low, had failed. It seemed only a matter of time before this golden opportunity would kick off our nation’s outstanding 2014 export “breakout” and all benefits derived therefrom.

    Even though a previous energy development approval had been granted for an export terminal conversion in Freeport, Texas, the just-announced O.K. by the U.S. Department of Energy for LNG-export clearance for the Dominion Cove Point LNG shipping dock, in Calvert County, Maryland to countries that do not have a free trade agreement, is a major breakthrough. The EPA, and its associated pressure groups had bombarded the DOE with 200,000 emails indicating the extreme displeasure of this broadening anti-U.S. domestic energy development, all of which that Agency considered “climatic poison.”
  • Demand for drilling equipment is only going to go up.  As you probably know, China supposedly has more shale oil and gas than the U.S.  China has drilled 100 horizontal wells to date and has a goal to drill 5,000 well by 2015. (Rumor) 

    That’s going to require a considerable amount of resources.
  • New Chevron headquarters approved.  The Moon Township PA planning commission on Wednesday voted unanimously to recommend that the board of supervisors approve a zoning change that would allow Chevron to build a regional headquarters to oversee Marcellus shale drilling operations.
  • Shell Cracker Plant.  The announcement on the Shell cracker plant will be made before Thanksgiving.  (Rumor)
  •  Antero finding success in shorter stage lengths.  During the second quarter of 2013, Antero began to complete most of its liquids-rich Marcellus Shale wells with shorter stage lengths ("SSL"). Antero's traditional frac design resulted in stage lengths averaging 350 feet per stage compared to the recent SSL completions which ranged from 150 to 250 feet per stage. While Antero's wells utilizing SSL completions have limited production history, the Company is encouraged by the well results as well as those of other operators in the southwestern core of the Marcellus Shale that have implemented shorter stage lengths and reduced cluster spacing. Based on the first 17 wells completed with SSL, the average increase in initial production rates was 25% to 35% when compared to similar wells within the same geographic area. Antero estimates that the incremental cost of the additional frac stages per 7,000 foot of lateral is 20% or $1.5 to $2.0 million per well assuming 200 foot stage lengths.

    Antero's Board of Directors has approved a $500 million increase in the company's 2013 capital budget to $2.45 billion, including $1.45 billion for drilling and completion, $400 million for land and $600 million for midstream infrastructure including the construction of a water pipeline system and gas gathering pipelines and facilities. Antero's 2013 capital expenditures totaled $1.2 billion as of June 30, 2013.
  • Methane Leaks much lower than previously thought. A new, highly anticipated report from the University of Texas and the Environmental Defense Fund might put that theory to rest – at last, and for good.

    The UT-EDF study released today looked at 190 onshore natural gas production sites in the United States. During completion activities (including hydraulic fracturing), the authors found that emissions were “nearly 50 times lower than previously estimated by the Environmental Protection Agency.” Based on its findings, the researchers estimate that total annual methane emissions are “comparable” to EPA’s estimates.

    The UT-EDF study’s findings (along with data from the latest EPA Greenhouse Gas Inventory) suggest a leakage rate of only about 1.5 percent, if not less than that. That rate is comfortably below the threshold required for shale to maintain its obvious and significant climate benefits.
  • OH Pipeline projects.  Companies in Ohio's Utica shale are planning to complete needed infrastructure in 2013 and get wells into full production in 2014.

    There are 133 separate pipeline projects planned and under construction in eastern Ohio to get natural gas and its liquids to market.
  • Scio, OH midstream update.  M3 Midstream LLC announced the first phase of the Utica East Ohio Midstream LLC (UEO) project is in service, receiving rich Utica Shale production, processing natural gas liquids and redelivering residue gas to interstate markets.

    At project start-up, the UEO system includes approximately 63 miles of natural gas and natural-gas liquids gathering lines, a 200-million cubic-feet-per-day cryogenic processing facility located near Kensington in Columbiana County, and a 45,000-barrel-per-day natural gas liquids fractionation, storage and rail facility near Scio in Harrison County.

    With the completion of the second and third phases of the project, the UEO system will consist of 800-million cubic-feet-per-day of cryogenic processing, 135,000 barrels-per-day of natural gas liquids fractionation, 870,000 barrels of natural gas liquids storage and a rail facility capable of loading 90 cars-per day with full scalability to increase processing, fractionation and rail loading capacity to almost double the initial amount.
  • Washington County, OH next hot spot?  Wunderlich Securities said in an Aug. 19 report that well results indicate Washington County will be one of the next drilling hot spots in the Utica, which it predicts will benefit drillers Magnum Hunter and PDC Energy. Both those companies are expected to soon announce well results from the area.
  • API asked to come to OH by Oil and Gas Companies.  At this past week’s Black and Gold Conference in Columbus, OH, Tim Gonzalez, API Global Service Representative, commented that the oil and gas companies asked API to come to OH to help local companies obtain API Certification.  The oil and gas companies want to purchase from local companies in the Marcellus and Utica Shale region with API Certification.

    I cannot emphasize enough how important the API certification is.  I’ve spoken with companies that have received the certification.  This certification enabled them to take advantage of the growing market for upstream and midstream machinery.

Rig Count

  • Baker Hughes Rigs count for the September 13 reporting week.  
    • PA Marcellus 53 rigs – up 3
    • PA Utica 1 rig – unchanged
    • Ohio Utica 34 rigs – unchanged
    • WV Marcellus 36 rigs  – unchanged

PA Permits for September 13 to September 20, 2013

 County   Township    E&P Company

1. There were no permits issued this week.  I do not know if there were actually no permits or there is a problem with DEP’s web site.  We’ll report what we find out next week.

 OH Permits – week ending September 14, 2013

    County       Township    E&P Companies

1. Guernsey      Wills          Rice
2. Monroe         Bethel        Hall Drilling
3. Monroe         Bethel        Hall Drilling
4. Monroe         Salem         Eclipse Resources
5. Monroe         Salem         Eclipse Resources

Take advantage of the bullish outlook and become a member in ShaleDirectories.com now or and secure your budget for membership in 2014.

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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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