Shale Directories Conferences
Appalachian Basin Real Estate Conference
December 11 & 12, 2019
Oglebay Resort
Wheeling, WV
http://appabasinrealestate.com/
Latest facts and a rumor from the Marcellus, Utica, and Permian, Eagle Ford Plays
Expert to Discuss Real Estate Opportunities in Appalachian Basin. Shale Directories announces that Adam Bruns, Site Selection magazine’s managing editor will be its featured speaker at the inaugural Appalachian Basin Real Estate Conference 12/11 and 12 at Oglebay Resort in Wheeling, West Virginia.
Bruns has been the managing editor at Site Selection magazine, published by Conway, Inc., since 2002. His publication has been reporting on the communities of the Appalachian Basin and beyond since the magazine’s inception in 1954, and since 2004 has published county-by-county analysis of corporate project activity along the entire Ohio River corridor. The Ohio River is critical to the development of the petrochemical industry in the Appalachian Basin, as evidenced by the construction of the Shell Polymer plant in Monaca, Beaver County, Pennsylvania.
“The Appalachian Basin is becoming a major petrochemical hub. We’ve documented significant development, and expect to see more in the coming years,” commented Bruns. He will share Conway Analytics data and insights from his team’s years of reporting in the region at the Appalachian Basin Real Estate Conference.
The Inaugural Appalachian Basin Real Estate Conference is sponsored by Ohio River Corridor, LLC and NAI Ohio River Corridor (NAI ORC), the region’s leading commercial and industrial site selection and real estate consultation group in the Ohio River Valley. “We are pleased to be the sponsor of this inaugural event,” commented Bryce Custer, SIOR, CCIM, and principal of NAI Ohio River Corridor, local affiliate for NAI Global and subsidiary of Ohio River Corridor, LLC.
Other conference speakers will include Matt Kelley, principal at Novogradac, the leading Federal Opportunity Zone accounting firm in the nation; Tom Gellrich, principal at TopLine Analytics, an internationally recognized petrochemical expert; Charles Zelek, Senior Economist, Department of Energy Fossil Fuels and Mark Locker, Maritime and Freight Project Manager with ODOT.
The conference will introduce business and real estate opportunities throughout the Appalachian Basin to investors and developers domestically and globally.
MPLX to Spend $2 Billion in 2020. Midstreamer MPLX is planning to spend $2 billion on capital projects in 2020, at the same time its parent company, Marathon Petroleum, is studying the possibility of spinning off midstream operations, Kallanish Energy reports.
MPLX is planning to “high-grade its capital expenditures, focusing on the most attractive returns,” the company said, in a recent statement.
Those plans call for creating an integrated crude oil and natural gas logistics system from the Permian Basin in West Texas and New Mexico to the U.S. Gulf Coast.
Wink-to-Webster
That includes the Wink-to-Webster crude oil pipeline in which MPLX has an equity interest. It’s scheduled to be completed in the first half of 2021. It will run from the Permian to the Houston area.
The Whistler Pipeline is being designed to move 2 billion cubic feet per day of natural gas from Waha, Texas, to the Agua Dulce market in South Texas. That pipeline is expected to be placed into service in the second half of 2021.
Last month, the company placed into service the Sherwood 12 and Tornado natural gas processing plants, adding 400 million cubic feet per day of capacity.
More processing under construction
The Sherwood 13 plant in West Virginia is scheduled to be completed in late Q4 2019 with another 200 Mmcf/d of capacity. The company has two additional processing plants under construction in the Permian.
MPLX reported significant year-on-year growth in the Marcellus and Utica shales in the Appalachian Basin. Gathered volumes averaged 3.7 billion cubic feet per day for the quarter, a 16% increase over Q3 2018.
Processed volumes averaged 6.2 Bcf/d, a 13% increase from Q3 2018, driven by higher utilization in the Marcellus.
Higher volumes from Hopedale
Fractionated volumes averaged 482,000 barrels per day, a 6% increase from Q3 2018, The increase was primarily driven by higher volumes from the expanded Hopedale Complex in eastern Ohio.
Overall, MPLX said it handled 6.3 Bcf/d of gathered volumes in the quarter, in addition to 8.8 Bcf/d of processed volumes and 547,000 Bpd of fractionated volumes.
In the Permian Basin, gathered volumes averaged 1.7 bcf/d in the quarter, a 3% increase from a year earlier. Processed volumes averaged 1.7 bcf/d for the quarter, a 13% increase from one year ago.
Processed and gathered volumes
In the Bakken, gathered volumes averaged 149 Mmcf/d for the quarter, processed volumes averaged 149 Mmcf/d. In the Rockies, gathered volumes averaged 827 Mmcf/d for the quarter, and processed volumes averaged 568 Mmcf/d.
In Q3 2019, the company reported net income of $629 million, or 61 cents per share. That compares to $510 million, or 62 cents a share, in Q3 2018.
EBITDA in the quarter was $1.2 billion, compared with $937 million one year ago. Net cash provided by operating activities was $1 billion. Distributable cash flow was also $1 billion.
The company reported total pipeline throughput of 5.2 million barrels per day (Mmbpd) in Q3 2019. Terminal throughput was 3.3 Mmbpd for the quarter.
Last July, Marathon Petroleum closed its acquisition of Andeavor Logistics, and that had a big impact on financial and production totals.
‘Deep Electrification’ Means More NatGas. Forbes. Opinion. For environmental reasons, there’s an ongoing push to “electrify everything,” from cars to port operations to heating. The idea is that a “deep electrification” will help lower greenhouse gas emissions and combat climate change. The reality, however, is that more electrification will surge the need for electricity, an obvious fact that seems to be getting forgotten. Ultimately, much higher electricity demand favors all sources of electricity, a “rising tide lifts all boats” sort of thing. But in particular, it favors gas because gas supplies almost 40% of U.S. electricity generation, up from 20% a decade ago. Gas is cheap, reliable, flexible, and backups intermittent wind and solar.
Montage Sees Big Increase in Production. Texas-based Montage Resources reported third-quarter 2019 net earnings of $4.3 million, with major production increases in the quarter, Kallanish Energy reports.
It also said income from continuing operations before taxes was $5.5 million, adjusted net income was $19.3 million and adjusted EBITDAX was $83.6 million.
Revenue was $163.3 million for the quarter, a 25% increase from Q3 2018. Capital spending in Q3 2019 was $65.4 million.
Montage Resources said its average net daily production in Q3 2019 was 621.7 million cubic feet-equivalent per day (Mmcfe/d). That was above the high end of the company’s previously issued guidance. Total average daily production in 3Q 2018 was 346.4 Mmcfe/d, an increase of 79.4% year-on-year.
Natural gas production jumped from 22.98 Bcf in Q3 2018, to 43.29 Bcf in Q3 2019, an increase of 88.3%. Total Q3 2019 production grew by 79.4%, from 31.87 Bcfe to 57.19 Bcfe.
The company said its average natural gas equivalent price was $2.88 per thousand cubic feet-equivalent including cash settled derivatives and excluding transportation expenses.
“During the third quarter, we continued to demonstrate superior operational execution and prudent financial decision making as we exhibit a strong track record of what we believe are repeatable results that differentiate our performance from others in the Appalachian Basin and our small-cap upstream peers,” said president and CEO John Reinhart, in a statement.
The company reduced its capital spending driven by a reduction in cycle times of 34% from 2018 that boosted efficiencies, he said.
Montage Resources has said it intends to maintain one gross operated rig in the Appalachian Basin for the rest of 2019, and into 2020 due to low commodity prices.
Montage Resources was renamed after the merger of Eclipse Resources and Blue Ridge Mountain Resources. That deal closed last February.
It’s the SUVs. World thirst for oil keeps growing, with SUVs a key culprit. The world’s thirst for oil will continue to grow until the 2030s, with climate-damaging emissions climbing until at least 2040 — and consumers’ insatiable appetite for SUVs is a big reason why. Mounting demand for plastic is another factor. So is increasing plane travel. And the upcoming population boom in cities across Africa and Asia. All this is according to an important global industry forecast released Wednesday by the International Energy Agency that is used as guidance by oil companies and governments. This year, amid growing pressure from young activists like Greta Thunberg and others for tougher action on emissions, the IEA’s World Energy Outlook took a stronger-than-usual stand on climate change.
Hope for NatGas Vehicles. Rep. Lizzie Fletcher files bill to boost natural gas-power vehicles. U.S Rep. Lizzie Fletcher, D-Houston, on Thursday filed a bill that aims to the boost adoption of vehicles that run on natural gas at a time when supplies of natural gas are so cheap and plentiful that drillers burn it off rather than pay the costs of transporting. The bill, which Fletcher co-sponsored with Rep. Markwayne Mullin, R-Okla., would revive a lapsed federal tax credit for the purchase of alternative fuels such as compressed natural gas, liquefied natural gas and natural gas harvested from landfills and other sources.
FERC Plans Release for Atlantic Sunrise. The Federal Energy Regulatory Commission plans to release an environmental assessment in early February for two natural gas pipeline projects that combined would connect Marcellus and Utica shale gas with Transcontinental Gas Pipe Line’s customers in the Northeast and mid-Atlantic.
If FERC stays on track, the review schedule for National Fuel Gas Supply’s 330,000 Dt/d FM 100 project and Transco’s 582,400 Dt/d Leidy South project appears to fit within the developers’ requested time lines for beginning construction in order to meet December 2021 in-service targets.
The two projects will essentially extend and expand Transco’s earlier 1.7 Bcf/d Atlantic Sunrise project, which went into service in October 2018. Under that project, Transco built the greenfield Central Penn Line in eastern Pennsylvania, connecting Transco’s mainline near the border with Maryland to high-production areas in northeastern Pennsylvania.
PRODUCTION TAKEAWAY
Unlike Atlantic Sunrise, the Leidy South flow path does not extend into the Southeast region; instead, the volumes will be delivered into the Zone 6 area near the Station 210 pooling point, effectively making it a Northeast-to-Northeast production-takeaway project.
The project (CP19-494) is expected to support incremental production growth in northeastern Pennsylvania by providing additional takeaway capacity out of the area for shippers Cabot Oil & Gas and Seneca Resources, though it is not expected to boost outflows from the Northeast to the Southeast as the contract path is entirely within Transco’s Zone 6 tariff zone.
The related FM100 project (CP19-494), fully subscribed to Transco under a proposed capacity lease, would supply Marcellus and Utica shale gas to the Leidy South project. It entails 29.5 miles of 20-inch diameter pipeline, along with smaller segments and two new compressors. It also entails abandonment of about 50 miles of pipeline and a compressor station.
Leidy South, on the other hand, entails installation and replacement of several short pipeline segments, two new compressor stations and other facilities.
FERC, in a notice late last week, said it planned to issue an EA February 7.
Both projects had asked for FERC approval to meet Transco’s target of starting service in time for winter heating in December of 2021. Transco had asked the commission to issue a final order by July 2020, to meet the targets included in precedent agreements with shippers. National Fuel had asked for the issuance of FERC authorizations no later than August of 2020.
If FERC meets its schedule, it would leave room for at least a five-month interval between the EA and the companies’ requested certificate order dates.
According to Christi Tezak of ClearView Energy Partners, since 2010 the average time between FERC’s issuance of an environmental assessment and decisions on certificate authorization has been about 120 days, and the median has been 110 days.
The FERC review schedule, if it holds, would “fit in our window,” Tezak noted in an email.
AWAITING DECISIONS
Over the last year or so, FERC decisions on some gas pipeline projects have dragged out longer. There are a handful of pending pipeline projects that received environmental assessments between November 2018 and May 2019 but have not yet seen certificate orders five to 12 months later. Those include the 182 MMcf/d South Mainline Expansion (November 2018 EA), the 850 MMcf/d Adelphia Gateway (January 2019 EA), the 11.8 MMcf/d Del-Mar Energy Pathway (April 2019 EA); the 275 MMcf/d Buckeye Xpress (May 2019 EA); and the 150 MMcf/d West Loop Project (May 2019 EA). That has prompted multiple filings in the FERC dockets pressing for decisions.
The precise reason for long reviews is unclear and can vary by project. This comes, however, amid division among FERC commissioners over environmental reviews, particularly on how far FERC can or should go to consider greenhouse gas emissions and climate impacts potentially associated with projects.
PennEast Going to the Supreme Court. PennEast plans Supreme Court appeal over NJ natural gas pipeline. PennEast will ask the U.S. Supreme Court to review a lower federal court ruling that the company could not use eminent domain to acquire state-owned land for its proposed natural gas pipeline. Opponents of the 110-mile pipeline that would cross western Hunterdon County had hailed the September ruling by the U.S. Court of Appeals for the Third Circuit, that PennEast’s condemnation suits against the state in federal court are barred by the 11th Amendment which gives states sovereign immunity from suits by private parties in federal court.
Water Disposal Issues in the Permian. Drillers face growing issue of water disposal. For every barrel of oil produced from the average Permian Basin well, about three barrels of water get pumped out with it. The water-to-oil ratio is lowest in the established Midland Basin, but more exaggerated in the Delaware and other Texas basins. Most of the water gets injected back underground into disposal wells, although more and more are getting treated and moved to other drilling sites to frack new wells. Permian oil producers want to get a better handle on produced water before it becomes a crisis, said Karr Ingham, a petroleum economist and executive vice president of the Texas Alliance of Energy Producers. The group recently published a study with the Independent Petroleum Association of America containing a series of recommendations for improving the outlook for produced water management.
CNX Leaving Pittsburgh Organization. CNX Resources Corp. is leaving the Allegheny Conference for Community Development at the end of the year, citing “serious concerns about the trajectory and future of the organization.”
In a December 2018 letter to Allegheny Conference chair Bill Demchak, CNX leadership group had chosen a course that “marginalizes energy and manufacturing as foundational, necessary components of our future socio-economic success.” Mr. Deluliis also cited the “lack of transparency on key efforts within the conference agenda.”
“Being a member of the executive committee brings accountability as to what the conference says and does,” he wrote, “yet many on the executive committee are in the dark as to the organization’s strategy on some of the most significant issues.”
The letter underscores a tension in Western Pennsylvania, simmering for years, between economic development and protection of the environment in a region where heavy industry often prospered at the expense of the environment.
The Allegheny Conference was founded in 1944 to leverage government and private sector resources in improving the Pittsburgh region’s economy. CNX, a Canonsburg-based natural gas exploration and development outfit, and its predecessor companies were among early conference members.
Neither Mr. Demchak nor Mr. Deluliis were available for comment.
It’s not clear if CNX’s concerns are shared by other members of the oil and gas industry. The Marcellus Shale Coalition, a Robinson-based trade industry group that represents oil and gas companies in Appalachia and is itself a member of the Allegheny Conference, did not comment on CNX’s stance.
Other members of the coalition are also high-profile players in the Allegheny Conference. Officials from Chevron, Shell Chemical Appalachia, EQT Corp, the Marcellus Shale Coalition, and half a dozen other oil and gas players sit on the boards of directors of the conference and its subsidiaries.
Morgan O’Brien, CEO of Peoples Natural Gas, chairs one of those subsidiaries — the Greater Pittsburgh Chamber of Commerce.
EQT spokesman Mike Laffin said the Downtown-based company hasn’t yet renewed its membership in the Allegheny Conference for next year because it plans to “review all of our corporate memberships in the near future.”
EQT is fresh off a proxy battle that installed new leadership at the company, and CEO Toby Rice has signaled that the company would be spending less money inside Pittsburgh and more in the communities where it operates — many of them in Washington and Greene counties. It’s not yet known what that could mean for its role with the regional business group.
Seneca Resources Corp., another oil and gas player that’s part of the Greater Pittsburgh Chamber of Commerce, has already pledged its membership for next year, spokesman Rob Boulware said. He said he appreciates the quality of the events and access to political leaders and decision makers that the membership brings.
‘Old economy’
In his letter, Mr. Deluliis took aim at the conference’s priorities, saying the group “seems to place higher importance on getting along with certain interests or ideological factions than it does confronting and taking principled positions on the most pressing issues of the day,” he said. “That priority ranking is difficult to accept.”
“To view energy and manufacturing as ‘old economy’ or simply a necessary evil and short-term bridge to something better is not only wrong, but insulting to thousands in this region,” he wrote.
“CNX cannot justify being part of an organization that gently, yet consistently, promotes the marginalization of what we do on behalf of society.”
In recent weeks, Mr. Demchak — who is chairman, president and CEO of PNC Financial Services — and Allegheny Conference CEO Stefani Pashman have each issued spirited defenses of the conference’s priorities as Pittsburgh Mayor Bill Peduto stirred controversy with remarks about the petrochemical industry late last month.
The Allegheny Conference helped advance development of the $6 billion Shell Chemical Appalachia chemical plant, which is under construction in Potter, Beaver County.
At a climate forum at the David L. Lawrence Convention Center on Oct. 30, Mr. Peduto said he opposed construction of any additional petrochemical plants in the region because of their long-term effect on the environment and public health. The mayor also lamented that the Pittsburgh region’s business leaders haven’t acted with urgency to combat climate change and its causes.
Mr. Peduto’s comments drew quick criticism from Ms. Pashman, who called them “misguided” in a statement she issued the next day. And in a Nov. 8 op-ed piece published in the Pittsburgh Post-Gazette, Mr. Demchak said Mr. Peduto’s remarks were “tone deaf.”
Cheers greeted Mr. Peduto’s comments at the Climate Action Summit in Pittsburgh, but they were criticized by Allegheny County Executive Rich Fitzgerald. Economic development organizations from nine Western Pennsylvania counties issued a statement supporting petrochemical industries in the region.
In an email on Monday, Allegheny Conference spokesman Phil Cynar said the organization doesn’t discuss members joining or leaving the organization.
U.S. Top Crude Oil Producer. The U.S. further solidified its position as the world’s top producer of crude oil in October with domestic production reaching a new all-time high of 12.6 million barrels per day (mb/d), according to data released today from the American Petroleum Institute’s Monthly Statistical Report (MSR) covering October 2019. The record production was met with solid U.S petroleum demand and exports plus lower oil prices in October.
“Across the board, the October results were a great reflection of how market forces have benefitted consumers,” API Chief Economist Dean Foreman said. “Decreased oil prices in October – despite record demand for the month and solid exports – underscored the influence of U.S. oil production on global markets and helped insulate consumers from external shocks. This also demonstrates the tremendous value of infrastructure, as the breakout oil production was largely enabled by increased pipeline egress from the Permian Basin, improving deliverability to key Gulf Coast refining and export markets.”
A new record for U.S. crude oil production of 12.6 mb/d – No. 1 in the world;
Total U.S. petroleum demand of 21.2 mb/d was highest on record for the month of October;
U.S. petroleum exports remained steady above 8.0 mb/d despite global challenges; yet,
U.S. To Surpass Russia. U.S. shale will soon produce more oil than all of Russia. Oil Price. Crude oil and natural gas production from the U.S. shale patch will top Russia’s combined oil and gas output by 2025, the International Energy Agency said in the 2019 edition of its World Energy Outlook. Under its Stated Policy Scenario, the IEA said, the U.S. will account for the overwhelming bulk of global oil production growth, at 85 percent, by 2030. It will also account for 30 percent of the global natural gas production growth in that period. With all this happening, it’s no wonder the United States will undermine OPEC’s and Russia’s share of the global oil and gas market, according to the IEA. The agency said that it expected growing U.S. production to bring down OPEC’s and Russia’s combined share of the oil market to 47 percent in 2030 from 55 percent in 2005.
NatGas Rising in Utility-Scale Power Generation. The Energy Information Administration expects the share of U.S. total utility-scale power generation from natural gas-fired power plants will rise from 34% in 2018, to 37% in 2019, and to 38% in 2020, Kallanish Energy reports.
EIA, in the just-released Short-Term Energy Outlook (STEO) forecasts the share of U.S. electric generation from coal to average 25% in 2019, and 22% in 2020, down from 28% in 2018.
EIA’s forecast nuclear share of U.S. generation remains at roughly 20% in 2019 and in 2020. Hydropower averages a 7% share of total U.S. generation in the forecast for 2019 and 2020, down from almost 8% in 2018.
Wind, solar, and other non-hydropower renewables provided 9% of U.S. total utility-scale generation in 2018. EIA/STEO expects they will provide 10% in 2019, and 12% in 2020.
EIA expects total U.S. coal production in 2019 to total 698 million short tons (Mmst), an 8% decrease from the 2018 level of 756 Mmst.
The decline reflects lower demand for coal in the U.S. electric power sector and reduced competitiveness of U.S. exports in the global market.
EIA expects U.S. steam coal exports to face increasing competition from Eastern European sources, and that Russia will fill a growing share of steam coal trade, causing U.S. coal exports to fall in 2020.
STEO projects coal production in 2020 will total 607 Mmst. EIA expects U.S. electric power sector generation from renewables other than hydropower — principally wind and solar — to grow from 408 billion kilowatt-hours (kWh) in 2019, to 466 billion kWh in 2020.
In EIA’s forecast, Texas accounts for 19% of the U.S. non-hydropower renewables generation in 2019, and 22% in 2020. California’s forecast share of non-hydropower renewables generation falls from 15% in 2019, to 14% in 2020.
EIA expects the Midwest and Central power regions will see shares in the 16% to 18% range for 2019 and 2020.
Arsenal Declares Bankruptcy. A Pennsylvania-based natural gas producer has filed for Chapter 11 bankruptcy protection — its second such filing in 2019 — Kallanish Energy reports.
Arsenal Resources Development, with headquarters in Wexford, Pennsylvania, also announced a $90 million recapitalization as part of the pre-packaged filing.
The filing was made last Friday in U.S. Bankruptcy Court in Delaware and the $90 million was approved a few days later by Judge Brendan L. Shannon. The plan calls for $90 million in investment from two lenders: Chambers Energy Capital and Mercuria Energy Co.
The plan calls for Arsenal Resources to be owned by the two lenders and to have a $130 million reserve-based lending facility, with the funds secured by Arsenal’s natural gas reserves.
The company said its restructuring has the approval of all of Arsenal Resources’ lenders and what it called an “overwhelming majority” of equity holders. The plan converts $360 million of debt into equity.
Last February, Arsenal Energy Holdings LLC quickly emerged from Chapter 11 reorganization. The company had filed for Chapter 11 on Feb. 4, and emerged on Feb. 14. It had predicted a 10-day turnaround for its pre-packaged reorganization.
That plan included a debt-for-equity exchange pursuant to which $861 million of subordinated notes were converted into equity. All other creditors were unaffected.
Arsenal Energy Holdings is the parent company of Arsenal Resources, a Marcellus Shale, pure play natural gas driller.
In February 2017, Mountaineer Keystone changed its name to Arsenal Energy Holdings. Mountaineer had been formed in June 2011, and drilled its first Appalachian Basin wells in 2012. It has roughly 208,000 net acres in West Virginia and Pennsylvania.
PA Permits November 7, to November 14, 2019
County Township E&P Companies
- Armstrong East Franklin Snyder Bros.
- Armstrong East Franklin Snyder Bros.
- Armstrong East Franklin Snyder Bros.
- Armstrong East Franklin Snyder Bros.
- Lycoming Cummings ARD OPS
- Lycoming Cummings ARD OPS
- Lycoming Cummings ARD OPS
- Lycoming Cummings ARD OPS
- Lycoming Cummings ARD OPS
- Lycoming Penn Twp. Exco Resources
- Lycoming Penn Twp. Exco Resources
- Tioga Ward Repsol
OH Permits November 9, 2019
County Township E&P Companies
- Jefferson Knox EAP
- Jefferson Knox EAP
- Jefferson Knox EAP
- Jefferson Springfield EAP
- Jefferson Springfield EAP
