Shale Directories Conferences
6th Annual Midstream PA 2019
November 12, 2019
Penn Stater Conference Center
State College, PA
Marcellus Utica Midstream
December 3 – 5, 2019
David L. Lawrence Conference Center
Appalachian Basin Real Estate Conference
December 11 & 12, 2019
Latest facts and a rumor from the Marcellus, Utica, and Permian, Eagle Ford Plays
Pittsburgh Mayor’s Blowback. Labor sides with big oil in a feud with Pittsburgh’s mayor. Mayor Bill Peduto has faced a fierce backlash since he announced at last week’s Climate Action Summit that he opposes any new petrochemical companies coming to Western Pennsylvania. Labor unions, civic leaders and even the mayor’s closest political ally have taken him to task. “When you make a comment that can clearly hurt the advancement of a region and their ability to feed their family and have a better life, that’s when it becomes an issue for us,” said Darrin Kelly, the city firefighter who heads the Allegheny County Labor Council. “I’m going to be very vocal on behalf of the working men and women to protect them, OK? . . . If they’re attacking our way of life, I’m going to come after them.”
Gulfport Selling Non-Operated Interests in the Utica. Gulfport Energy is working to sell some of its interests in Ohio’s Utica Shale, Kallanish Energy reports.
The company said the proceeds from the potential sale of non-operated interests in eastern Ohio would offset higher-than-expected non-operated capital spending in 2019 in the Utica.
The company expects to complete the Utica assets sale before Dec. 31, 2019, it said, in a statement. The buyer was not identified nor was the size of the potential sale.
Oklahoma-based Gulfport has leases on roughly 210,000 net acres in the Utica.
The company lost $48.8 million, or 31 cents per share, during the third quarter of 2019.
Its average production was equivalent to 1.5 billion cubic feet per day of natural gas. The Utica Shale accounts for 80% of Gulfport’s production.
It is running one rig in the Utica. In the most recent quarter, the company drilled two Utica wells and began production on 16 Utica wells.
In its statement, Gulfport also said it’s continuing to pursue the previously announced proposed sale of certain water infrastructure assets in the SCOOP play of Oklahoma. A definitive agreement is expected before Dec. 31, 2019, with the deal closing in early 2020, it said.
Gulfport also reported it recently sold certain overriding royalty interests associated with assets in the Bakken Shale of North Dakota and Montana. It was paid $8 million by an unnamed third party.
Net production from the assets average 68.6 barrels of oil-equivalent per day (Boe/d) in the nine months ended Sept. 30. That deal is expected to close by Jan. 1, 2020.
PA Emissions Down 92%; Production Up 3000%. Pennsylvania emissions fell as much as 92% since 1990, even as the state’s energy demand and production soared eleven-fold from 2010 to 2018, and natural gas processing expanded more than eightfold during that time frame, a Consumer Energy Alliance (CEA) analysis found.
The results demonstrate the state can have energy production, expanded pipeline infrastructure, and create sound environmental stewardship at the same time, according to CEA, Kallanish Energy reports.
“This is a significant feat for a state that is second only to Texas in natural gas production – which more than doubled to 36% of the state’s net electricity generation, while nuclear energy generated another 39%, according to the Energy Information Administration,” CEA stated.
“Although the state’s industrial consumption dropped 4.67%, Pennsylvania still experienced massive emissions reductions.”
CEA’s examination of data from 1990-2017, which show Pennsylvania’s emissions have decreased across the board:
* 72% reduction in nitrogen oxides (NOx)
* 92% reduction in sulfur dioxide (SO2)
* 53% reduction in volatile organic compounds (VOCs); and
* 18% reduction in carbon dioxide (CO2).
“As the data shows, environmental improvements can be achieved even as Pennsylvania’s economic growth accelerates,” said David N. Taylor, president and CEO of the Pennsylvania Manufacturers’ Association.
This analysis follows CEA’s Energy Savings Report for Pennsylvania, which found families, small business and manufacturers across the state saved more than $30 billion thanks to low-cost energy over the past decade.
ExxonMobil 3rd Qtr. Financial Update. ExxonMobil on Friday reported third-quarter 2019 net earnings of $3.2 billion, or 75 cents per share, Kallanish Energy reports, down 49% from Q3 2018 earnings of $6.24 billion, or $1.46 per share, due largely to lower commodity prices and growth-related costs.
Revenue fell from $76.6 billion in Q3 2018, to $65.0 billion in the most recent quarter. Cash flow from operating activities was $9.1 billion. The oil supermajor reported earnings included a favorable tax-related item of roughly $300 million.
Oil-equivalent production rose 3%, to 3.9 million barrels per day. Capital and exploration costs in the quarter were $7.7 billion, including investments in the Permian Basin of West Texas/southeast New Mexico, it said. That is up 17% from a year ago.
Liquids production increased 4%, driven by Permian Basin growth, while natural gas volumes increased 1%. Upstream liquids production grew by 5% from a year earlier, driven by Permian activity. Production in the Permian grew more than 70% from Q3 2018, it said.
“We are making excellent progress on our long-term growth strategy,” said chairman and CEO Darren W. Woods, in a statement. “Growth in the Permian continues to drive increased liquids production and we are ahead of schedule for first oil in Guyana.”
The company, he said, is “making good progress on our advantaged investments in the Downstream and Chemical.” He added, “The competitiveness of our portfolio was further enhanced with the divestments of non-strategic assets reaching almost a third of our 2021 objective of $15 billion.”
Chevron 3rd Qtr. Financial Update. Chevron reported a 36% drop in third-quarter 2019 profit, despite an overall 3% increase in production, Kallanish Energy reports.
Net earnings in the quarter were $2.58 billion, or $1.36 per share, down from $4.05 billion, or $2.11 per share in Q3 2018. The drop was due largely due to lower commodity prices, said the California-based company.
The supermajor’s worldwide net oil-equivalent production grew roughly 3%, to 3.03 million barrels-equivalent per day (Mmboe/d), but sales prices dropped in the U.S. and worldwide. The average U.S. liquids price was $47 per barrel, down from $62 per barrel a year ago. Production was 2.96 Mmboe a year ago.
Net oil-equivalent production of 934,000 barrels per day in Q3 2019, was up 103,000 Bpd from Q3 2018.
The net liquids component of oil-equivalent production in the quarter increased 11%, to 726,000 Bpd, while net natural gas production increased 17%, to 1.24 billion cubic feet per day (Bcf/d) compared to Q3 2018.
Production in the Permian Basin in West Texas/southeast New Mexico rose 35%, to 455,000 Boe/d. Production increases in the Permian were partially offset by normal field declines in the base business.
U.S. upstream produced $727 million in revenue in Q3 2019, down from $828 million in Q3 2018.
Revenue from international production also declined in the quarter: from $2.55 billion one year ago to $1.98 billion. The average sale price was $56 per barrel.
International net oil-equivalent production of 2.10 Mmbpd was down 26,000 Bpd from the year-ago quarter.
U.S. downstream revenues also dropped, from $748 million to $389 million. The decrease was due largely to higher operating costs and lower margins on refined product sales, the company said.
“Third quarter earnings and cash flow were solid, but down from our very strong results of a year ago,” said chairman and CEO Michael Wirth, in a statement. “Lower crude oil and natural gas prices more than offset a 3% increase in net oil-equivalent from last year’s third quarter,” he said.
Cash flow from operations was $7.8 billion in the quarter. In Q3 2019, the company increased its share repurchases to $1.25 billion, Wirth said.
Dominion 3rd Qtr. Financial Update. Dominion Energy has reported third quarter 2019 earnings of $975 million or $1.17 per share, an increase of 14.2% from the previous year, Kallanish Energy reports.
That compares to earnings of $854 million or $1.30 per share in 3Q 2018.
Operating earnings in 3Q 2019 were $967 million ($1.18 per share), compared with operating earnings of $758 million (1.15 per share) in 3Q 2018.
“Strong performance across our business units, combined with favorable weather, resulted in operating earnings per share above the midpoint of our quarterly range. Weather normalized results were also above the midpoint of our guidance range,” said chairman, president and CEO Thomas f. Farrell II in a statement.
He said year-to-date results and the 4Q outlook sport “a narrowing of our existing 2019 operating earnings guidance range to $4.15 to $4.30 per share.
The company said it expects 4Q earnings of $1.10 to $1.25 per share, compared to 89 cents per share in 4Q 2018.
Positive factors including no Millstone nuclear refueling outage, growth from regulated investment in electricity and natural gas and contributions from the Southeast Energy Group will contribute to that growth, the company said.
The company had operating revenue of $4.269 billion in the quarter, up from $3.451 billion in 3Q 2018.
Dominion Energy serves nearly 7.5 million customers in 18 states with electricity or natural gas.
Energy Transfer 3rd Qtr. Update. Energy Transfer (ET) reported third-quarter 2019 net income of $832 million, or 32 cents per share, Kallanish Energy reports, which compares to Q3 2018 net income of $371 million, or 32 cents per share.
Revenue in Q3 2019 was $13.5 billion, down from $14.5 billion one year ago.
The change was due largely to higher operating income and the impact of the company’s 2018 simplification merger between ET and Energy Transfer Operating, it said.
In Q3, the company benefitted from its natural gas liquids and refined products segment, which grew 34% from a year ago. That segment saw growth from the completion of the Mariner East 2 Pipeline in Pennsylvania for natural gas liquids and for exports.
There were also higher volumes of NGLs moved from the Permian Basin and from growing pipeline volumes in Texas and in the Bakken Shale in North Dakota and Montana.
Energy Transfer said adjusted EBITDA was $2.79 billion, up 8% from the year-ago quarter. Distributable cash flow attributable to partners was $1.52 billion, up 10%.
Operating income in 3Q 2019 was $1.83 billion, compared to 1.70 billion a year earlier.
Energy Transfer reported in the most recent quarter, it brought three pipelines and one natural gas processing facility into service. The lines include the Permian Express 4 oil pipeline expansion that began full service on Oct. 1.
It said the Arrowhead III processing plant in the Permian Basin in West Texas went into service in early July, and is projected to be at full capacity by year-end.
The company also entered into a $5 billion agreement to buy Oklahoma-based pipeline operator SemGroup. A SemGroup stockholder vote will be held Dec. 4.
Chesapeake Experiencing Major Challenges. Less than a decade after Chesapeake Energy, led by its flamboyant CEO and co-founder, Aubrey McClendon, was swallowing shale play acreage in huge gulps, dominating industry conferences with double-decker display booths, and making smaller brethren wish they could grow up to be the Oklahoma-based company, the “producer Aubrey built” could be nearing bankruptcy.
In a Tuesday U.S. Securities and Exchange Commission filing (reviewed by Kallanish Energy), the company admitted it may not be viable as a “going concern” if low oil and natural gas prices persist.
“Fluctuations in oil and natural gas prices have a material impact on our financial position, results of operations, cash flows and quantities of oil, natural gas and NGL reserves that may be economically produced,” the filing states.
Depressed prices stabbing Chesapeake
“If continued depressed prices persist, combined with the scheduled reductions in the leverage ratio covenant, our ability to comply with the leverage ratio covenant during the next 12 months will be adversely affected which raises substantial doubt about our ability to continue as a going concern.
“Failure to comply with this covenant, if not waived, would result in an event of default under our Chesapeake revolving credit facility, the potential acceleration of outstanding debt thereunder and the potential foreclosure on the collateral securing such debt, and could cause a cross-default under our other outstanding indebtedness.”
The warning came just over an hour after the company posted a wider-than-expected loss for the third quarter.
Once No. 2
A decade ago, Chesapeake was a $37.5 billion company led by McClendon. Chesapeake became the U.S.’s second-largest U.S. natural gas producer, trailing only ExxonMobil.
But in 2016, McClendon was indicted by a federal grand jury on charges of conspiring to rig bids for the purchase of oil and gas leases. A day later, he was dead after his car collided with a highway overpass in Oklahoma City, Oklahoma.
Tuesday, Chesapeake’s market value was just $2.6 billion. The company, which under McClendon was known as a massive acreage acquirer, has been decimated like many of its brethren by years of low gas prices.
Selling, cutting, trying
Chesapeake has spent the years since McClendon’s death selling assets, cutting jobs and trying to produce more oil in an effort to reduce its debt.
The going-concern warning signals CEO Doug Lawler’s six-year effort to rescue Chesapeake from the billions of dollars in debts amassed by McClendon may be on the verge of failure.
Lawler, picked to head Chesapeake by billionaire activist investor Carl Icahn, has tried, unsuccessfully to convert the gas giant into an oil company.
Tried to calm fears
Chesapeake executives tried to calm fears for the future on a third-quarter conference call. The producer continues to look at asset sales, deleveraging acquisitions and capital funding options, they said.
“We could go out and seek a waiver at any time from our bank group, but at the moment we continue to be focused on the strategic levers that result in permanent debt reduction,” chief financial officer Nick Dell’Osso Jr. said, on the call.
Chesapeake’s borrowings totaled $9.73 billion at Sept. 30, up more than 19% from $8.17 billion at the end of 2018.
Though Chesapeake plans to reduce capital spending by 30% next year as it seeks to generate free cash flow, its third-quarter capital expenditures rose 16% from a year earlier as it completed more wells. The producer is maintaining its budget guidance for full-year 2019.
Pioneer 3rd Qtr. Financial Update. Pioneer Natural Resources reported third quarter 2019 net income of $231 million, or $1.38 per share, Kallanish Energy reports, down 44% from net income of $411 million, or $2.39 per share, in Q3 2018.
The Texas-based company reduced its full-year 2019 Permian Basin capital spending by $150 million, or about 5%. It also increased the midpoint of its 2019 production guidance by roughly 3%. The revised Permian capital spending for full-year 2019 will be between $2.8 billion and $2.85 billion.
Its overall 2019 capital spending budget will be in the range of $3.05 billion and $3.10 billion, all funded by expected 2019 free cash flow of $3.4 billion.
“Pioneer reported another outstanding quarter where we executed at a high level, underspent our capital budget and delivered strong production growth,” said president and CEO Scott Sheffield, in a statement.
It reported quarterly oil production averaged 215,000 barrels per day and overall production averaged 351,000 barrels of oil-equivalent per day (Boe/d). Overall production increased 9%, from 321,000 Boe/d in the year-ago quarter.
The company spent $665 million on capital spending in the Permian in Q3 2019, and placed 75 horizontal wells on production.
Pioneer plans to operate 21 rigs in the Permian in 2019, and expects to place roughly 290 wells on production, compared to 270 wells placed on production in 2018.
Fourth-quarter 2019 production is projected to average 345 to 360,000 Boe/d (a 3% increase at the midpoint) and 210 to 220,000 Boe/d (a 1% increase at the midpoint), it said.
Cash flow from operating activities was $895 million in the most recent quarter, and the company produced quarterly free cash flow of about $250 million. Revenue fell 6%, to $2.33 billion.
The independent producer reported it was paid 6% less for oil, 30% less for natural gas and 53% less for natural gas liquids from one year ago.
Pioneer also completed its corporate restructuring in Q2 2019, and produced savings of about $100 million. It also reduced facility spending by an additional $100 million.
The company also repurchased $200 million of common stock shares in the quarter under the company’s $2 billion repurchase plan. To date, $728 million has been spent on stock repurchases.
ExxonMobil Says Fracking Ban Will Help Foreign Producers. Banning hydraulic fracturing in the U.S. will aid foreign oil producers at the expense of the American economy, an ExxonMobil (XOM) executive said Friday.
“Any efforts to ban fracking or restrict supply will not remove demand for the resource,” ExxonMobil vice president of Investors Relations Neil Hansen said on the company’s third-quarter earnings conference call, Kallanish Energy learns.
“If anything, it will shift the economic benefit away from the U.S. to another country, and potentially impact the price of that commodity here and globally.”
He was asked how the oil supermajor is evaluating political risk ahead of the 2020 election because Sen. Elizabeth Warren has said if elected, on her first day as President, she would ban all fracking and put a moratorium on new fossil fuel leases for drilling on offshore and public lands.
Fellow Democratic Presidential candidate Sen. Bernie Sanders has said he would do the same thing.
Analysts have said banning fracking could hurt smaller companies, particular those involved in exploration and production, while driving up global oil prices, CNBC reported.
“I think any efforts obviously to ban fracking would have a negative impact on industry efforts to develop resources like the Permian. There’s no doubt in that,” Hansen said, CNBC reported.
He said the company shares concerns about climate change and emissions reductions, but believes there are more effective ways to curb emissions, such as instituting a revenue-neutral carbon tax.
“It’s uniform, it’s transparent, it will incentivize the market to find solutions,” he said, CNBC reported.
Interesting Perspectives on Future Oil Production. OPEC sees its market share shrinking for years as shale triumphs. OPEC slashed estimates for the amount of oil it will need to pump in coming years, projecting that its share of world markets will shrink until the middle of the next decade amid a flood of U.S. shale supplies. The producer group expects that demand for its oil will slide by about 7% over the next four years, slumping to an average of 32.7 million barrels a day in 2023, according to its annual report.
Top shale CEO says OPEC shouldn’t worry about U.S. oil growth. Pioneer Natural Resources Chief Executive Scott Sheffield said on Tuesday that he expects the Permian Basin, the top U.S. shale field, to “slow down significantly over the next several years.” “I don’t think OPEC has to worry that much more about U.S. shale growth long term,” Sheffield said on Tuesday on a call with analysts.
Permian Flaring. Permian Basin flaring hits ‘all time high’. Oil drillers in the Permian Basin are burning off or exhaling more gas than ever before, as production in the country’s oil epicenter expands over land without infrastructure to gather natural gas, analysts at Rystad Energy reported yesterday. The oil and gas region of West Texas and southeastern New Mexico vented or flared an “all time high” of 750 million cubic feet per day (MMcfd) during the period from July to September, up from less than 100 MMcfd just under a decade ago, according to the energy research firm.
Eagle Ford Blowout. Thousands of acres sealed off following blowout at Eagle Ford Shale well. Thousands of acres of land remain sealed off days after a blowout at a natural gas well located belonging to Devon Energy between the Eagle Ford Shale towns of Yorktown and Nordheim. The accident happened at a Devon Energy natural gas well near Cotton Patch Road and FM 952 in DeWitt County early Friday morning. No injuries were reported but authorities evacuated rural families living within a two-mile radius of the blowout, which sent natural gas and other pollutants spewing into the sky and surrounding countryside.
Fracking Equipment Going to Scrap. The downturn in shale drilling has been so steep oilfield companies are taking the unprecedented step of scrapping entire fleets of hydraulic fracturing equipment, Bloomberg reports.
With almost half of U.S. fracking equipment expected to be sitting idle within weeks, drillers like Patterson-UTI Energy and RPC Inc. are retiring truck-mounted pumping units and other equipment used in fracking, Kallanish Energy learns.
Whereas in previous market slumps, fracking equipment owners parked unused equipment to await the demand revival, but this time it’s different: Gear is torn apart for parts or sold for scrap.
As stagnant, low crude prices and investor pressure discourage new drilling, the fracking industry that was growing so fast it couldn’t find enough workers as recently as two years ago, now finds itself buried in pumps, pipes and storage tanks.
And the slowdown rapidly is spreading from fracking specialists to sand miners and the truckers who haul it. U.S. Silica Holdings, the top supplier of frack sand, tumbled 38% last Tuesday after announcing plans to shut mines on the back of disappointing quarterly results.
Roughly 2.2 million horsepower (Mmhp), or roughly 10% of industry capacity, already has been earmarked for the scrap heap, Scott Gruber, an analyst at Citigroup, told Bloomberg.
In addition to Patterson and RPC, Gruber said industry giants Schlumberger and Halliburton probably are retiring parts of their fleets, and at least another 1 Mmhp needs to be eliminated to halt the slide in fracking fees.
A spokeswoman for Halliburton declined to comment. A spokesman for Schlumberger referred to comments by CEO Olivier Le Peuch on a third-quarter earnings call, where the executive said it was too early to give specifics about activity levels.
Estimates for total U.S. fracking capacity vary, but Bank of America Merrill Lynch puts the figure at almost 25 Mmhp. Just 13 Mmhp of that is forecast to still be at work during the final months of this year, down from 17 Mmhp during the second quarter of 2018, according to Bank of America’s Chase Mulvehill, Bloomberg reported.
US Encourages African Countries to Import its LNG. The US is encouraging African countries to consider importing its abundant supplies of liquefied natural gas (LNG), as it expects its production to more than double within the next few years. US Department of Energy assistant secretary Steven Winberg this week said African countries should consider importing US gas while they prepare to develop their own natural gas production.
More Data Than Oil. Bandwidth poised to become next bottleneck in the Permian Basin. At first, there were not enough pipelines to move oil and natural gas to market. Then, it was a lack of water for drilling and hydraulic fracturing operations. And then it was an insufficient number of disposal sites to handle all the wastewater from the oil fields. Now, bandwidth — the capacity to transmit data over the internet — is poised to become the next big bottleneck in the Permian Basin, the nation’s largest and busiest oil field.
Equinor Sells Eagle Ford Assets to Repsol. Norway’s Equinor agreed to sell its shale assets at the Eagle Ford shale formation in southwest Texas to Repsol for $325 million, the Norwegian oil and gas firm said on Thursday.
The company holds 69,000 acres net (27,923 hectares) in the formation via a joint venture with Spanish Repsol, and its equity production from the Eagle Ford averaged 43,000 barrels of oil equivalents per day (boepd) or 2% of its total global output in 2018.
In addition, Equinor holds stakes in some midstream assets in the area.
Equinor entered the Eagle Ford through a 50-50 joint venture with Talisman Energy in 2010, increasing its stake to 63% in 2015 and taking operator-ship of the whole asset in 2016.
Under Thursday’s agreement, Repsol will be the new operator and will have a 100% interest in the asset.
PA Permits October 31, to November 7, 2019
County Township E&P Companies
- Bradford Leroy Chief
- Bradford Leroy Chief
- Bradford Leroy Chief
- Lycoming Cascade ARD OPP
- Lycoming Cascade ARD OPP
- Lycoming McIntyre Rockdale
- Lycoming McIntyre Rockdale
- Lycoming McIntyre Rockdale
- Lycoming McIntyre Rockdale
- Washington West Bethlehem EQT
OH Permits November 2, 2019
County Township E&P Companies
- Jefferson Wayne Ascent
- Noble Seneca Antero