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NewsLetters

  • Permit Activity. 
    • PA – 22 permits; Activity moving west to Armstrong, Clarion, Mercer and Westmoreland
    • OH – 1 permit; Mahoning Count
  • Expo/Event activity.
    • Utica Summit 2014 – October 23 in Canton, OH. I encourage you to attend this conference.  It will give you a forward looking perspective on the impact of lower energy costs on transportation and manufacturing.  Industry leaders, JPMorgan Chase, Caterpillar, Dow, Pepsi/Frito Lay and Timken, will give their perspectives and what it could mean to your business.
      www.uticasummit.com
    • Dawood Engineering Cordially Invites You to the Grand Opening of Dawood’s Bridgeport Office.

      October 17, 2013
      11:00 am to 1:00 pm
      103 Cambridge Place
      Bridgeport, WV 26330


      RSVP to: Heather Sweitzer 717-732-8576 or hsweitzer@dawood.cc
    • DUG East Conference & Exhibition, November 13-15, 2013 Pittsburgh, PA.   David L. Lawrence Convention Center

      Join Hart Energy in Pittsburgh for the 5th annual DUG East conference and exhibition. This premier Marcellus and Utica Shale event brings top executives from the most active operators in the Appalachian Basin to the stage. This year you'll hear from executives at Range Resources, EnerVest Ltd., Halcon Resources, Cabot Oil & Gas, CONSOL Energy, PDC Energy, Eclipse Energy and many more. These expert speakers will offer their unique insight on the many discoveries, technical achievements and new challenges associated with bringing the Marcellus and Utica plays to full, safe and economic production. 

      Make plans to attend today! Click here to learn more and register.
  • 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

  • OH Nat Gas going to LA for export.  Williams and Boardwalk Pipeline Partners, LP announced they have executed joint venture agreements to continue developing a liquefied petroleum gas (LPG) export facility in the Lake Charles, LA. area. The proposed Moss Lake LPG Terminal would WILL be located on the Calcasieu River and serve tanker ships transporting LPG to Asian, Latin American and European markets.

    The terminal is being designed to store 900,000 barrels of fully refrigerated propane and butane with a load-rate of 25,000 barrels per hour. Williams and Boardwalk are currently working with a number of parties to reserve off-take capacity at the terminal.
  • Chesapeake leases to TOTAL. Chesapeake is selling its leases in Mahoning County, OH.  (Rumor)

    Chesapeake laying off 800 employees.  Chesapeake Energy CEO Doug Lawler promised that his "transformation teams" would complete their personnel evaluations, designed to get the company down to where it needed to be "competitive" by November 1.

    Lawler’s email

    Dear Chesapeake Employees,
    As I have previously shared, I joined Chesapeake Energy last June because of my confidence in the employees, the assets, and the company’s great potential.  The unique combination of talent and resources within Chesapeake provides the foundation for what I believe can be a top-performing E&P company in North America.

    The past few months have been very challenging as we have evaluated the competitiveness of the company.  As we go forward and execute our strategies of 1) Financial Discipline and 2) Profitable & Efficient Growth from Captured Resources, we will position Chesapeake to be a sustainable, enduring enterprise, and provide the basis to achieve the leadership role in the E&P business that this company can deliver.

    The organizational restructuring targeted to be complete by November 1 has concluded, and the initial transformation work is finished.  By scaling E&P support services, reducing management layers, and aligning resources with a sharpened focus on accountability and efficiency, we have created a business built to deliver a sustainable and profitable future.  As a result of the restructuring, approximately 800 employees – in various groups including Land, Operations, IT, HR, Legal, Facilities, A&D, Finance and Accounting – were informed today that they will be leaving the company.

    While Chesapeake has been laying off employees, it has not affected its permitting activity.  In PA this past week, Chesapeake has received 5 permits and as we said in previous newsletters, Chesapeake is one of the leading permitting E&P’s in OH.
  • Natural Gas to Mexico. For all the investment in new projects to liquefy and ship U.S. natural gas overseas, the country is already benefiting from soaring exports of the fuel in its raw form via traditional pipelines to Mexico.

    The U.S. is piping about 2 billion cubic feet of gas across its southern border every day, or about 3 percent of the nation’s entire output, according to Kinder Morgan Energy Partners LP. That’s poised to double because new power plants and factories are adding to demand, said Anas Alhajji, chief economist at NGP Energy Capital Management LLC. Mexico is consuming gas at the fastest pace ever while domestic output slows BP Plc. data show.
  • The Shell cracker’s implications. 
    It is my opinion that the Shell cracker announcement will be coming soon.  The implications on the cracker plants will be far reaching as the result of the abundant supply of wet gas in western PA, eastern OH and northern WV.

    I’ve asked a chemical industry consultant Tom Gellerich to provide his perspective on cracker plants in the Appalachian Basin.

    The Shell Ethylene Cracker is unlikely to be the only cracker in the Appalachian Basin. It seems to go against the grain, with the highly interconnected chemical industry and support industries concentrated in the Texas – Louisiana gulf coast. There are solid reasons for more ethylene crackers in the Appalachian Basin. First group of reasons has everything to with Shell’s decision. Downstream consumers of ethylene will want an alternative source of supply in case Shell’s cracker has issues or is down for maintenance. They also see the same prize, a polyethylene market with-in 500 miles that is almost 50% of the US total demand. By being closer to the customer Shell can be more responsive to demand and avoid the logistics costs shipping ethane to the gulf coast and back as polyethylene.

    Innovative companies are also challenging scale and interconnected nature of the Chemical industry. Historically US ethylene crackers have been designed to run on mixed feedstocks, being able to take anything from Naphtha a refined form of crude oil to butane, propane and ethane. This allowed the ethylene crackers to take advantage of changes in feedstock price. It also results in increased production of other products such as butadiene which have value. Mixed feedstock plants as opposed to pure ethane feed plants are, as a result, far more capital and people intensive.

    Ethylene crackers were historically also built as big as possible, as doubling a cracker size did not double the capital cost or labor to run the plant. To get to these large ‘world scale’ crackers additional chemical units beyond polyethylene needed to be built to consume the ethylene. Thus not only were you building an ethylene cracker and polyethylene unit, but also ethylene oxide, ethylene glycol and so on. Thus your capital costs, operational complexity, land requirements, permitting, need to market and sell multiple products and project risk increased in proportion.

    A new concept is emerging that could serve the Appalachian basin, which does not have the large tracks of land needed and complex infrastructure to handle the downstream products. Build only an ethylene cracker and polyethylene unit, with its far lower capital costs and risks. Serve the local demand, lowering logistics costs. This will require unconventional thinking, but isn’t that what drove the shale gas revolution?

    Stop thinking of just ethylene and polyethylene. The new propane dehydrogenation process to propylene for the high volume plastic polypropylene is next.

                                                Contact Tom Gellerich tomgellrich@toplineanalytics.com
  • Antero’s IPO.  For you stock traders, the Antero IPO went out at $44 a dollar share which was $2 over the top of its price range.  At the end of the first day of trading, the stock closed at $52.01.  Investors have been watching Antero’s monster wells Monroe and Noble counties.
     
  • More midstream consolidation.  The continuing rush to profit from the natural gas boom in Pennsylvania and elsewhere has pushed PVR Partners L. into the $5.6 billion embrace of a Texas pipeline operator.

    Regency Energy Partners L.P., with headquarters in Dallas, purchased PVR on Thursday for $3.88 billion in stock and cash while taking on $1.8 billion in debt.

    The deal, expected to be completed in the first quarter of 2014, almost triples PVR's estimated value of $2 billion just 18 months ago, when it plunged deeper into the natural gas pipeline business with the purchase of Chief Gathering L.L.C.'s pipeline system, which services the state's Marcellus Shale region.

    It also drives home how rapidly the lucrative Marcellus Shale fields are changing the energy game here and elsewhere.

    The combined company will now control an extensive network of "midstream" pipelines that move natural gas from individual wells to larger interstate lines that transport the fuel throughout the country.

Rig Count

  • Baker Hughes Rigs count for the October 4 reporting week.  
    • PA Marcellus 52 – up 1
    • PA Utica 2 rig – up 1
    • Ohio Utica 34 rigs – down 1
    • WV Marcellus 34 rigs  – unchanged

PA Permits for October 3 to October 10, 2013

    County               Township          E&P Company

1. Allegheny            Indiana              Range
2. Armstrong           Gilpin                 U.S. Energy
3. Armstrong           Sugarcreek        MDS Energy
4. Beaver                South Beaver     Chesapeake
5. Bradford              Leroy                 Chesapeake
6. Bradford              Orwell                Chesapeake
7. Bradford              Wilmont             Chesapaeke
8. Clarion                 Redbank            Exco
9. Greene                Cumberland       Energy Corp of Am
10. Greene              Cumberland       Energy Corp of Am
11. Mercer               Jefferson            Hilcorp
12. Mercer               Shenango          Hilcorp
13. Mercer               Shenango          Hilcorp
14. Susquehanna    New Milford        Southwestern
15. Susquehanna    New Milford        Southwestern
16. Washington       Independence   Range
17. Washington       Hanover             Range
18. Washington       Jefferson            Range
19. Westmoreland   Washington       CONSOL
20. Westmoreland   Washington       CONSOL
21. Westmoreland   Washington       CONSOL
22. Wyoming            Meshoppen        Chesapeake

 OH Permits – week ending October 5, 2013

    County       Township    E&P Companies

1. Mahoning    Jackson       Halcon

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

Looking for workers, advertise on ShaleDirectories.com

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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