Expo/Industry events for the next few months:
Midstream PA 2018
September 25, 2018
Penn Stater Conference Center
State College, PA
WV Energy Expo 2018
October 3, 2018
Hazel and J.W. Ruby Community Center
Morgantown, West Virginia
October 10, 2018
North Canton, OH
October 23-25, 2018
David Lawrence Conference Center
For other events visit:
Latest facts and a rumor from the Marcellus, Utica, Permian, Eagle Ford, Bakken and Niobrara Shale Plays
Williams Seeks Final Approval for Atlantic Sunrise. Williams Companies, Inc. recently reported the completion of construction of its major Atlantic Sunrise project. The production and pipeline operator has requested for the final approval of the project by Federal Energy Regulatory Commission (FERC).
Importantly, the Atlantic Sunrise natural gas pipeline, worth $3 billion, is an expansion of the company’s Transco pipeline, which is the largest-volume natural gas transmission system in the United States. Atlantic Sunrise will have a transportation capacity of around 1.7 billion cubic feet of gas per day (Bcf/d). It will transport Marcellus shale gas from Pennsylvania to the rest of the country. The project design includes 200 miles of new greenfield pipe, two compressor facilities in Pennsylvania along with other compressor station modifications in five states.
Notably, Atlantic Sunrise had received a Certificate of Public Convenience and Necessity from the FERC in February 2017 amid opposition from green campaigners, as the opponents of the pipeline could not gather satisfactory facts. The court ruled that the implementation of the measures proposed by FERC and the company will reduce environmental hazards to significant levels and greenlighted it to proceed with the construction.
The company expects the pipeline to add value to its existing energy infrastructure, which will provide it with a steady flow of revenues in the future. This will also help citizens by providing them access to an affordable and clean energy source, as well as contribute to the economic growth of the country.
Nexus Seeks FERC Approval. The Nexus natural gas pipeline is seeking approval from the Federal Energy Regulatory Commission to begin service on Sept. 28, Kallanish Energy reports
It wants to begin moving 967 million cubic feet of natural gas per day and will eventually move 1.5 billion cubic feet per day across northern Ohio.
Nexus Gas Transmission made its request on Monday.
It wants FERC approval by Sept. 26 so that service could begin on Sept. 28.
The $2.6 billion natural gas pipeline will move Utica and Marcellus natural gas across northern Ohio to the Midwest, the Gulf Coast and Ontario.
The 256-mile pipeline across northern Ohio to Michigan and Ontario will transport natural gas from Ohio, West Virginia and western Pennsylvania.
It is being developed by Michigan-based DTE Energy and Enbridge.
The company had reported in late July that the project was 80% complete.
E&P Companies on Spending Spree. Oil and gas producers are nearing a worldwide spending spree not seen since 2013, pointing to a potential windfall for oilfield services (OFS) companies, Morgan Stanley forecasts.
The bank believes global growth in capital spending on new oil and gas production — that will last for several years — is just over the horizon, CNBC reported.
Morgan Stanley believes 2020 will be a year of synchronized growth in capital expenditures, and oilfield service firms will be one of the biggest beneficiaries.
This comes after oil giants and independent producers slashed spending in 2015 and 2016 during a historic downturn in crude prices, CNBC reported.
The recovery has been relatively isolated to U.S. shale plays and a few international markets, but Morgan Stanley sees the rebound extending to many more parts of the world, Kallanish Energy understands.
“Importantly, 2020 looks to be the first year the industry will experience material, synchronized capex growth since before the downturn,” Morgan Stanley analysts wrote, in a research note.
After rising just 5% from the trough in 2016, capital spending is poised to increase by roughly 15% through 2020, Morgan Stanley states.
In 2022, expenditures on finding and developing new oil and gas assets will raise by roughly 30% from this year, to roughly $583 billion, the bank forecasts.
Morgan Stanley analysts believe Wall Street is underestimating the growth potential in three key areas, CNBC reported.
The market currently sees European oil majors like Royal Dutch Shell and Total holding capital spending roughly flat at roughly $80 billion in 2021.
But Morgan Stanley believes these energy giants will actually increase spending to about $100 billion, or 25% above consensus.
The bank also thinks its peers underappreciate spending in the U.S. The independent producers in the country’s various shale plays have pledged to return more cash to shareholders.
However, Morgan Stanley thinks capital spending will still jump by more than 15% in 2020, once producers in Texas and New Mexico’s Permian Basin overcome bottlenecks currently constraining output.
“We do not think U.S.-focused service stocks are discounting the substantial activity increase and margin expansion this is likely to lead to,” the bank’s analysts said.
Morgan Stanley believes growing Chinese demand for liquefied natural gas will mean supply and demand will balance between 2020 and 2021. Currently, the broader market sees oversupply lasting through 2023-2024, according to the bank.
Permian Problems Good for the Eagle Ford. The Permian Basin, rich in oil, but plagued by labor, housing and pipeline shortages, may be losing some of its luster as energy companies look to other shale plays where costs are lower, markets are closer and hassles are fewer.
That description seems to fit the Eagle Ford shale in South Texas, where both investment and drilling activity is picking up. As the Permian has boomed over past years, the Eagle Ford has climbed slowly from the oil bust.
But signs point to the pace picking up as the Eagle Ford emerges as an alternative to oil and gas producers looking to get away from Permian crowds. Production from the oilfield has rebounded from a low of 1.1 million barrels of oil a day in August 2017 to a projected 1.5 million barrels a day in October — second only to the Permian, according to the Energy Department.
The number of operating drilling rigs in the Eagle Ford has more than doubled to 78 from the 2016 low of 33, according to the Houston oilfield services company Baker Hughes. The value of mergers and acquisitions in the Eagle Ford Eagle has already hit $15 billion this year, second to the Permian’s $45 billion, but well ahead of the $9 billion in SCOOP and STACK fields of Oklahoma and the $5 billion in the Bakken oil field of North Dakota, according to Canadian financial services company Scotiabank. .
Subash Chandra, a managing director at Guggenheim Partners, a New York investment firm, said the Eagle Ford’s key advantage is that it is far closer to Gulf Coast refiners and export hubs, particularly the Port of Corpus Christi, than the Permian in West Texas.
“The Eagle Ford is unique, with proximity to markets,” Chandra said presented at the DUG Eagle Ford conference in San Antonio Thursday. “The Permian is the surface of Mars.”
The Permian remains the hottest shale play in the world, producing some 3.5 million barrels of oil a day and accounting for nearly one-third of U.S. crude output. But that success has outstripped many of the resources in West Texas, particularly pipelines. While several companies are racing to complete pipeline projects, the capacity shortage is expected to last into next year.
As a result, producers are discounting their oil in Midland because they can’t easily ship it to Gulf Coast markets. In August and September, crude in Midland was selling for $20 a barrel less than along the Gulf Coast, according to the Energy Department.
Oil and gas companies, meanwhile, are beginning to redirect spending outside of the Permian, the Energy Department said in a report released Wednesday. So are services companies.
Paul Shearer, director of sales for Superior Silica Sand of Fort Worth, said the relative calm in the Eagle Ford was among the reasons the company developed a 4-million-ton-a-year frac sand mine south of San Antonio to focus on the Eagle Ford.
TX Shale Replacing Iranian Oil. Falling Iranian oil exports from U.S. sanctions open the door for U.S. oil and gas producers to fill a void in Asia for a niche oil market. Texas shale is beginning to produce more ultra-light condensate oil and there’s growing demand in Asia, said Sandy Fielden, director of oil and products research at Morningstar, in a new report this week. Iran has served as a major source for condensate in Asia. About half of all U.S. condensate production comes from Texas, especially South Texas’ Eagle Ford shale and West Texas’ booming Permian Basin. “Regardless of how much Iranian condensate remains available for export, the current tight conditions represent an opportunity for U.S. producers to gain valuable market share,” Fielden argued.
BP Betting on TX. Nearly a decade after Deepwater Horizon, BP is ready to grow again, betting much of its comeback on Texas after completing the biggest energy deal in the world this year. Its pending acquisition of the U.S. shale assets of the Australian mining company BHP Billiton for $10.5 billion puts BP in the Permian Basin in West Texas and the Eagle Ford shale in South Texas, and expands its presence in the Haynesville shale in East Texas, positioning itself to compete for the spot as the biggest producer in the United States. If the acquisition pays off, it would likely mean additional growth in Houston, where BP’s U.S. subsidiary is headquartered and the company employs about 4,500 people.
TX Shale Oil to Make Big Gains. A new report shows that West Texas’ Permian Basin will continue to post the biggest oil production gains of any U.S. shale field in October. The report by the Department of Energy predicts the Permian will add 31,000 barrels of production in October, bringing overall production close to 3.5 million barrels a day. The Eagle Ford Shale in South Texas is expected to add 16,000 barrels a day of oil production, bringing its production — the second highest in the country — closer to 1.5 million barrels a day. The production gains in the Permian come despite tightening pipeline capacity, which is said to have fallen below production.
Low E&P Debt. More Drilling? A new review by the Department of Energy shows that debt levels in the energy industry are at their lowest levels since the third quarter of 2014. The financial review of the global oil and gas industry for the second quarter of 2018 ending June 30 found that companies had reduced their debt for seven consecutive quarters, leading to the lowest long-term debt-to-equity ratio since the third quarter of 2014, which was right before oil prices began to plummet. Debt was reduced by more than $20 billion in the second quarter, while the long-term debt-to-equity ratio was 41 percent, according to data from the Energy Department. The Energy Department report reviewed 107 oil and gas companies of which 76 were U.S.-based, 13 in Canada, nine in Europe and another nine in other areas. More than half had production of less than 100,000 barrels of petroleum liquids a day. Among the companies included are Apache Corp., Devon Energy, ExxonMobil, and Royal Dutch Shell.
FERC Approves Atlantic Coast Pipeline Construction. The Federal Energy Regulatory Commission has lifted a stop work order on the Atlantic Coast natural gas pipeline, Kallanish Energy reports.
That action came Monday in a two-page letter to Atlantic Coast Pipeline LLC and Dominion Energy Transmission.
FERC said it had received updated filings from the U.S. Fish and Wildlife Service and from the National Park Service.
On Aug. 10, FERC had halted construction on the $6.5 billion pipeline after a federal appeals court had vacated two permits for the project.
Construction has started in West Virginia and North Carolina, but has not yet started in Virginia.
That action came from the Richmond, Virginia-based Fourth U.S. Circuit of Appeals.
The court ruled two permits for the Atlantic Coast Pipeline were invalid: a permit from the National Park Service to run the pipeline under the Blue Ridge Parkway in Virginia between Augusta and Nelson counties, and a second permit allowing the U.S. Fish and Wildlife Service to allow the “incidental taking” or killing of five endangered species when no other options exist along the pipeline route.
Construction was able to continue in areas not impacted by the permitting questions.
The 600-mile pipeline is designed to move natural gas from the Marcellus and Utica shales through West Virginia and Virginia to the Carolinas. It would move 1.5 billion cubic feet per day.
It is being developed by Dominion, Duke Energy, Piedmont Natural Gas and Southern Company Gas.
Work is under way in West Virginia and North Carolina, but an erosion permit is still needed in Virginia before construction can begin. The appeals court has scheduled a Sept. 28 hearing on the Virginia erosion issue.
The project is expected to be completed in late 2019.
New Senior Exec at Blue Mountain Resources. Blue Ridge Mountain Resources has a new high-ranking executive, Kallanish Energy reports.
Michael Hodges became senior vice president of finance, effective on Sept. 19.
He will become executive vice president and chief financial officer after the merger of Blue Ridge Mountain Resources and Eclipse Resources is completed.
That is expected to be in the fourth quarter 2018, subject to regulatory approvals.
Hodges will replace Matthew DeNezza, Eclipse’s executive vice president and chief financial officer.
DeNezza will remain with Eclipse and aid Hodges in the transition until the close of the merger.
Hodges previously worked at PayRock Energy II, an EnCap portfolio company. It was focused on the Eagle Ford Shale in South Texas.
He has also worked for Ward Energy Partners, Rex Energy, Chesapeake Energy and SandRidge Energy.
He earned a bachelor’s degree from the University of Oklahoma and a master’s degree from Oklahoma City University. He is a certified public accountant.
“Michael brings with him significant industry experience and an excellent track record of leading finance functions in the upstream energy sector while possessing executive-level experience at both public and private energy companies,” said John Reinhart, president and CEO of Blue Ridge, in a statement.
Reinhart will lead the merged companies.
Blue Ridge, with offices in Irving, Texas, is active in the Marcellus and Utica shales in the Appalachian Basin.
Eclipse Resources is based in State College, Pennsylvania, and is active in the Appalachian Basin.
Shale economy big plus for Ohio: Drew $64 billion in investment in seven years, led to 100,000 paychecks. Energy growth triggers company expansions, community improvements
“When it comes to energy, no region, not even the Gulf, can compete with Ohio,” said Dana Saucier Jr., senior managing director of energy and chemicals at JobsOhio.
PA Permits September 13 to September 20, 2018
County Township E&P Companies
- Greene Richhill CNX
- Tioga Covington Reposol
OH Permits for weeks ending September 15, 2018
County Township E&P Companies
- Guernsey Richland Utica Resource Op.
- Guernsey Richland Utica Resource Op.
- Jefferson Pleasant Ascent
- Jefferson Pleasant Ascent
- Jefferson Pleasant Ascent
- Jefferson Pleasant Ascent