Save these 2019 for Shale Directories Seminars
Utica Midstream
March 21, 2019
Walsh University
North Canton, OH
Upstream PA 2019
April 17, 2019
Penn Stater Conference Center
State College, PA
Latest facts and a rumor from the Marcellus, Utica, Permian, Eagle Ford, and Bakken Shale Plays
Rice Brothers – EQT Update. Rice Energy Inc.’s co-founders told EQT Corp.’s board that they want to discuss replacing the natural gas producer’s chief executive officer, chairman and some of its directors.
Toby and Derek Rice, whose energy company was acquired last year by EQT, outlined their plans in a letter to EQT’s board and suggested they meet this week.
“We strongly prefer a negotiated resolution with the EQT board and believe these changes are required to deliver the results that EQT shareholders expect,” the Rice brothers said in the letter dated Monday, a copy of which was obtained by Bloomberg.
The brothers said they wanted to discuss replacing EQT CEO Robert McNally with Toby Rice and appointing a new mutually agreed upon chairman to replace James Rohr. They also wanted to discuss appointing three other directors, in addition to Toby Rice, to the board.
Daniel Rice, another brother, currently sits on the EQT board.
The letter, reported earlier by the Wall Street Journal, was in response to an invitation from EQT’s board to meet, the Rices said.
A representative for EQT wasn’t immediately available for comment.
The Rice brothers’ push for changes at the Pittsburgh-based company has garnered the support of activist investor D.E. Shaw & Co., which owns 3.6 percent of EQT according to data compiled by Bloomberg, and former EQT CEO Steven Schlotterbeck.
“These changes can be accomplished promptly, are in the best interest of all EQT shareholders, and are necessary to the success of the required turnaround plan,” the Rice brothers said.
The Rices hold more than 7 million EQT shares, equivalent to a stake of at least 2.8 percent, after agreeing to the company’s 2017 purchase of Rice Energy for $6 billion in cash and stock. D.E. Shaw supported the acquisition but had agitated for EQT to spin off its midstream assets, which it eventually did this year.
Mariner East 2 Pipeline Online. Finally!!! Energy Transfer Partners announced Saturday that it’s controversial Mariner East Pipeline, which has sparked vehement community opposition in Chester and Delaware Counties, is now online.
The Texas-based company, parent company of Sunoco Pipeline, issued a press release saying Mariner East 2 is in service, available for both interstate and intrastate service. The 350-mile NGL pipeline transports domestically produced ethane, propane and butane east from processing plants in Ohio across West Virginia and Pennsylvania to Energy Transfer’s Marcus Hook Industrial Complex in Delaware County, where the NGLs are stored for distribution to local, domestic and waterborne markets.
In order to do that, Sunoco had to fill in the gaps in the unfinished, original proposal for a 20-inch pipeline with a smaller, older, 12-inch pipeline. That move also has raised the consternation of critics of the project, who questioned the safety of the older pipe. Sunoco vowed that the old line had been tested and was safe to use. Despite the fact that the entire 20-inch line will likely not be operational until sometime in 2020, Sunoco is calling the new line, actually a hybrid of three different lines, Mariner East 2 and will start moving materials through it temporarily until the entire project is completed.
The multi-billion dollar project has been plagued by delays, work stoppages and protests from citizens opposed to the project, in particular the idea of moving highly volatile gases through densely populated neighborhoods, including in close proximity to several schools and senior centers.
OH EPA Approves PTT/Daelim Permits. The Ohio Environmental Protection Agency has completed its review of plans for a proposed $6 billion ethane cracker plant in Belmont County in eastern Ohio, Kallanish Energy reports.
The state agency has approved a modified wastewater discharge permit for the planned petrochemical complex in Shadyside on the Ohio River planned by PTT Global Chemical America.
The state approval came on Dec. 27. On Dec. 21, the Ohio EPA had approved a required air permit for the plant that allows construction to begin.
The developer-company, a subsidiary of PTT Global Chemical, Thailand’s largest integrated petrochemical company, has not yet made a final investment decision.
“With today’s issuance of this modified permit, Ohio EPA’s environmental review of PTTGC America’s prosed ethane cracker is complete,” said Ohio EPA director Craig Butler, in a statement.
“We have been careful to ensure this facility will not have an adverse impact on the air, water or health of the surrounding communities,” he said.
Changes made to the permit include cutting the levels of pollutants to be discharged into the Ohio River, changing the locations of locations where storm water will be discharged, and modifying the limits for an internal monitoring station that doesn’t directly discharge to surface water,
The plant, if built, will annually produce of 1.5 million tons ethylene and other materials from ethane produced by shale drilling.
The plant would use six ethane cracking furnaces and manufacture ethylene, high-quality polyethylene and linear low-density polyethylene.
Issuance of final permits can be appealed to the Ohio Environmental Review Appeals Commission.
Royal Dutch Shell is building a similar ethane cracker in Beaver County, Pennsylvania, northwest of Pittsburgh.
Forbes 2019 Energy Predictions. The first prediction is that we will see a gradual fall in the domestic U.S. rig count throughout the first half of 2019. My second prediction is that the price for WTI will rise again, but will not exceed $60 during the first half of 2019. Even with a gradual slowing of U.S. drilling and completion activity, overall domestic production will continue to rise rapidly as technology and efficiency gains enable upstream companies to wring higher and higher volumes out of each well over time. That all leads to my third prediction, which is that, the domestic oil and gas industry will continue to set new all-time production records in each of the first six months of 2019. Half of the drilling will continue take place in Texas and natural gas prices will fall back down below $3.00/mmBtu early in 2019 and stay there. My sixth prediction is that ongoing U.S. economic growth of between 2% and 3% will continue to support major investments in new capital spending by industries which use natural gas and its constituent liquids in their processes throughout 2019, and LNG exports will expand throughout the year as several additional export facilities come online. Lastly, U.S. exports of both LNG and crude oil will set new records during the first half of 2019.
Record NatGas Flaring in the Bakken. Regulators say the volume of natural gas flared this year in North Dakota reached an unprecedented level. Operators burned off the natural gas associated with oil production due to the lack of plant and pipeline capacity in the state. The volume flared was 527 million cubic feet per day. In October alone, that’s enough to heat 4 million average homes. The Bismarck Tribune says several gas processing plants and pipeline projects were announced or under construction in 2018, representing investments of more than $3 billion. Four major natural gas processing plants are expected to be complete next year, adding a total processing capacity of 690 million cubic feet per day.
2019 CAPEX Cuts. U.S. shale producers are slamming the brakes on next year’s drilling with crude prices off 40% and mounting fears of oversupply, paring budgets that in some cases were set only weeks earlier. The reversal is alarming because blistering growth in shale fields has propelled U.S. crude output 16% to about 10.9 million barrels per day (bbl/d) for 2018, above Saudi Arabia and Russia. Production has been expected to rise 11% more in 2019 as large oil firms and independents added wells this year. Shale producer Centennial Resource Development Inc. on Dec. 20 joined rivals Diamondback Energy Inc. and Parsley Energy Inc. in canceling drilling rig additions next year. Centennial, led by shale pioneer Mark Papa, withdrew its 2020 production target and canceled plans to add 2.5 drilling rigs, citing market weakness.
LNG to China. China last month imported two tankers of U.S. liquefied natural gas, nudging open a doorway that had been closed shut for a month at a time when America is rapidly expanding its ability to export the heating fuel. The three operating U.S. terminals soaked up more than 5.1 billion cubic feet of natural gas from American shale basins on Sunday, the most ever. With two more U.S. terminals slated to open in the first quarter of 2019, China’s re-emergence as a customer as wintry weather descends offers a much-needed outlet for exports.
PA DEP Approved Shell’s Falcon pipeline. The Pennsylvania Department of Environmental Protection last week approved Shell Pipeline Co.’s Falcon pipeline, designed to flow ethane to Shell’s cracker complex under construction in Beaver County.
The 97-mile line will bring ethane from three natural gas liquids processing centers, one near Houston, Pennsylvania, and the others near Cadiz, Ohio, to a station in Beaver County before moving the last several miles to the Potter Township plant.
Some 45.5 miles of the line will be located in the Pennsylvania counties of Washington, Beaver and Allegheny, Kallanish Energy reports.
The DEP said it had reviewed Shell’s application along with feedback from three county conservation districts, three public hearings and a comment period that included 1,500 comments.
“DEP’s due diligence included a robust review which facilitated the public’s participation by encouraging public feedback and access to important information throughout the process,” said DEP Secretary Patrick McDonnell, in a statement.
That included concerns over how close the pipeline would be to a drinking water reservoir and a water line.
“In its permit applications, Shell proposed to deepen the horizontal directional drill (HDD) below the raw water line, have a crew on standby in the event of a break in the raw water line, have additional pre-stressed concrete pipe repair joints at the job site, and use other construction techniques to minimize impacts to the raw water line during construction, Dep said, in a statement.
Construction and operation of the pipeline will fall under the jurisdiction of the federal Pipeline and Hazardous Materials Safety Administration (PHMSA).
OH Sees Big Jump in NatGas and Oil Production in 3rd Qtr. Natural gas and oil production both shot up in the third quarter 2018 in Ohio’s Utica Shale play, Kallanish Energy reports.
Ohio’s horizontal wells produced 605.7 billion cubic feet (Bcf) of natural gas in the quarter, a 31.44% increase over Q3 2017, the Ohio Department of Natural Resources said Wednesday, in releasing the latest information. One year ago, the natural gas produced from horizontal wells totaled 460.8 Bcf, the state agency said.
Ohio also produced 5.55 million barrels (Mmbbl) of oil in the quarter, a 31.79% increase from Q3 2017’s 4.21 Mmbbl.
The No. 1 gas well in Ohio during the quarter was an Eclipse Resources well in Monroe County’s Green Township, with production totaling 3.62 billion cubic feet (Bcf) of natural gas. Monroe, Belmont and Jefferson were among the top natural gas counties.
The top oil well in the quarter was an Eclipse Resources well in Guernsey County’s Millwood Township, flowing 128,163 barrels.
The results were from 2,242 horizontal wells, mostly in eastern and southeastern Ohio. Of that total, 2,198 wells reported production in the Q3.
The state agency said the average Ohio well in the quarter produced 2,523 barrels of oil and 275 million cubic feet (Mmcf) of natural gas.
Ohio law does not require the separate reporting of natural gas liquids (NGLs) or condensate. Oil and gas reporting totals on the report include NGLs and condensate.
The report is available at: http://oilandgas.ohiodnr.gov/production
Anti’s Harmful to the U.S. Economy. A new analysis by the U.S. Chamber of Commerce’s Global Energy Institute finds the anti-energy “Keep It in the Ground” movement has prevented at least $91.9 billion in domestic economic activity and eliminated nearly 730,000 job opportunities, Kallanish Energy reports.
In recent years, KIITG activists have attempted to derail energy projects with countless lawsuits, protests and even vandalizing property, with the goal of delaying or killing energy projects, the report says.
“The anti-energy movement’s opposition to vital energy infrastructure comes with a real cost: Lost job opportunities and billions in prevented domestic economic activity,” said Karen Harbert, president and Ceo of the Global Energy Institute, in a statement.
“Unfortunately, a small but vocal group of activists is waging fights against these projects around the nation. Our new report demonstrates just how damaging that is to families, consumers and American workers,” she said.
The report, released Tuesday, attempts to quantify the impacts of delayed and cancelled energy infrastructure projects. Taken together, the $91.9 billion in lost economic opportunity is larger than the economies of 12 states, the report says.
In addition, more than $20 billion in tax revenue has been lost, according to the report.
The economic modeling focused on 15 projects, including pipelines, power plants, transmission lines and export facilities, as well as New York’s statewide ban of hydraulic fracturing, or fracking.
The list of projects included the Constitution Pipeline from Pennsylvania to New York, the Jordan Cove LNG liquefaction/export facility and related pipelines in Oregon, the Keystone XL Pipeline from Montana to Nebraska, the Northern Access Pipeline from Pennsylvania to New York, the Valley Lateral Pipeline in New York and the Atlantic Coast Pipeline from West Virginia to North Carolina.
The report includes a discussion of needed reforms to the permitting process that would help with the expansion and modernization of energy infrastructure, including proposals from the Trump administration and legislation.
The report, “Infrastructure Lost: Why America Cannot Afford to Keep It in the Ground,” is available at: http://globalenergyinstitute.org/infrastructure-lost
DUCs Continue to Climb. The number of drilled, but uncompleted (DUC) wells in the Lower 48 U.S. states jumped 3.4% from October to November, with the Permian Basin dominating the list, the Energy Information Administration reports.
EIA’s monthly “Drilling Productivity Report” (“DPR”) found 287 DUCs were added to the portfolio of drilled, but uncompleted wells centered in the Anadarko, Appalachia (Marcellus and Utica Shale plays combined), Bakken, Eagle Ford, Haynesville, Niobrara and Permian basins/plays.
The total number of DUCs at Nov. 30, 2018 was 8,723, up from 8,436, Kallanish Energy reports.
Four of the seven drilling regions, as referred to by the DPR, added DUCs to their totals, led by the Permian, which added 248 DUCs last month.
The total number of DUCs in place last month was 4,039, up from 3,791 in October. The other regions that added DUCs from October to November included the Anadarko, up 45 to 1,135; the Eagle Ford, up 28 to 1,563; and the Haynesville, up nine DUCs to 210.
Three plays/basins saw their DUC wells total fall from October to November, including Appalachia, down 19 to 588; the Niobrara, down 16 to 421; and the Bakken, down eight DUCs to 767.
Columbia Seeks Approval for Service on Mountaineer Xpress. Columbia Gas Transmission is asking the Federal Energy Regulatory Commission to approve beginning service on a major section of the Mountaineer Xpress natural gas pipeline in West Virginia.
The company is seeking to begin service by Dec. 31 on 113 miles of the 36-inch line in nine West Virginia counties, including Doddridge, Ritchie, Calhoun, Wirt, Roane, Jackson, Mason, Putnam and Cabell counties.
The project is intended to flow 2.7 billion cubic feet per day (Bcf/d) of natural gas.
The request was filed Dec. 12 in a letter to Ferc, along with 177 pages of supporting documents, Kallanish Energy reports. The request also includes six miles of 24-inch pipeline in Doddridge County, a compressor station and related facilities.
That section could move an additional 700 million cubic feet per day (Mmbpd) of natural gas with independent producer Antero Resources taking the added capacity, the company said.
The request, if approved, would allow the company to move additional natural gas during the winter heating season, Columbia said. Ferc had approved beginning service last fall on the first section of Mountaineer.
The $2.1 billion project stretches 170 miles from Marshall County in northern West Virginia, to Cabell County in southern West Virginia en route to the Gulf Coast via other pipelines. There are connections to Ohio and southwest Pennsylvania.
Mountaineer Xpress is the second biggest completed natural gas pipeline for the Appalachian Basin, second only to Energy Transfer’s Rover Pipeline, which flows 3.25 Bcf/d.
Columbia Gas Transmission is now part of TransCanada.
Court Delays Atlantic Coast Pipeline Hearings. Despite Atlantic Coast Pipeline’s warnings that the current court schedule could delay the 600-mile, 1.5 Bcf/d natural gas project, a federal appeals court declined to speed the pace for briefing and oral argument for a challenge to federal endangered species permitting. ACP previously has said it paused work on nearly the entire project designed to move Appalachian shale gas to Mid-Atlantic market, after the 4th US Circuit Court of Appeals December 7 stayed the federal approvals in question while litigation proceeded. Seeking to ease the impact on the project schedule, ACP on December 14 asked the court to move up oral argument, tentatively set for March, to the end of January. It contended that time-of-year restrictions that prohibit tree felling after mid-March could mean a delay of up to a year under the current schedule for briefing and oral argument. It also told the court that the cost of stopping construction is about $20 million per week, and that significant delays could mean most of the 3,000 full-time workers in West Virginia and North Carolina would be released. But the 4th Circuit Court of Appeals December 28 denied ACP’s motion to expedite briefing and oral argument.
Capline Pipeline Plans a Binding Season. The owners of the Capline pipeline system intend to conduct a binding open season in January 2019 for a reversed Capline system, which would transport crude oil from origination points near Patoka, Illinois, and Collierville, Tennessee, to the U.S. Gulf Coast. The owners – including Plains Pipeline, L.P., BP Oil Pipeline Company, and Marathon Petroleum Corporation – previously conducted a non-binding open season for a reversed Capline system in the fourth quarter of 2017, which generated shipper interest.
Phase I reversal engineering studies have been completed. Subject to the results of the binding open season and regulatory approvals, crude oil service is expected to commence in the third quarter of 2020.
Antero Shipping More Gas over Rover. Energy Transfer’s Rover natural gas pipeline across northern Ohio is having a big impact on Antero Resources, one of the key players in the Appalachian Basin, Kallanish Energy reports.
The pipeline’s lateral to MarkWest Energy Partners’ Sherwood processing center near West Union in northern West Virginia went into service on Nov. 3, providing first-time access to higher-priced Midwest markets with no additional transport fees for the company, Antero reported Tuesday.
30% of gas
The Denver-based company said it expects to ship 30% of its natural gas from the Utica and Marcellus shales to the Midwest in the fourth quarter, an increase from the 16% of gas shipped prior to Nov. 3.
Antero also said it expects to produce 400 million cubic feet per day (MMcf/d) of unhedged natural gas volumes in Q4 2018. It said the “positive impacts from the increased exposure to rising natural gas prices and Midwest regional pricing during the quarter substantially offset the decline in oil and NGL prices.”
In other news, Antero reported it has repurchased 9.1 million shares of stock for $129 million in the quarter to-date. The average repurchase price was $14.10 per share. The stock repurchase was largely funded by free cash flow generated during the fourth quarter, Antero said. The repurchase represents 3% of shares. The company has earmarked $600 million for stock repurchases.
Monetizing hedge positions
Antero also monetized a portion of its natural gas hedge positions for $357 million. That includes $235 million in net proceeds via an early settlement of 68% of its April through December 2019 swaps, replacing the monetized volumes with collars.
The ceiling 1.575 Bcf/d of new collars for that period have a $2.50 per MMBtu floor and a ceiling ranging from $3.31 to $3.54 per MMBtu.
The company also reset 70% of its 2020 fixed-price swaps from $3.25/Mmbtu, to $3/Mmbtu, for proceeds of $122 million, used to pay corporate debt.
The company said the total volume hedged remains unchanged with about 70% of the company’s 2019 and 2020 natural gas production hedged.
Delevering
Said president and CEO Glen Warren in a statement: “The monetization and restructuring of a portion of our hedge portfolio allows Antero to further delever, while maintaining upside to the natural gas strip in 2019.”
He added, “Antero was able to capture a portion of the value in its 2019 fixed price swaps. We believe that futures prices do not accurately reflect current low storage levels and strong demand growth fundamentals. This monetization builds upon the delevering process that we started in 2017, with our initial hedge monetization. At that time, Antero had a stand-alone leverage ratio of 3.2x. The monetization will further strengthen our balance sheet as we target a stand-alone leverage profile below 2.2x by year-end 2018.”
Gulfport Names New President/CEO. Gulfport Energy has a new president/CEO, as the Oklahoma-based company announced David M. Wood, with 40 years’ experience in the oil and gas industry, will fill the posts, effective immediately, Kallanish Energy reports.
He will also join the company’s board of directors.
Donnie Moore, who has served as interim CEO, will continue to serve as the company’s chief operating officer and report to Wood.
Last October, Gulfport ousted president and Ceo Michael G. Moore, who stepped down from his position and resigned from the company’s board. That happened after a company review found he had made personal charges to company credit cards and used Gulfport’s chartered aircraft without permission.
The Moores are not related.
Wood joins Gulfport from Arsenal Resources LLC, a West Virginia-focused natural gas producer and a portfolio company of public equity firm First Reserve Corp. He most recently served as board chairman and previously held the position of CEO.
He called Gulfport “a very attractive and compelling” company.
From 2013 to 2016, Wood served as a senior advisor to First Reserve. Prior to that, he was with Murphy Oil Corp. for 17 years, including serving as CEO, president and director from 2009 to his retirement in 2012.
From 1980 to 1994, Wood held various senior positions with Ashland Exploration and Production. He began his career as a well-site geologist in Saudi Arabia.
Chesapeake Changing Its Tune to Oil. Chesapeake Energy best known for its trailblazing pursuit of natural gas from shale formations is making a big bet on the oil below the rolling grasslands of eastern Wyoming. Its timing doesn’t look great. U.S. oil prices have fallen more than 40% since early October to close at $45.41 a barrel on Monday, straining the finances of the debt-laden company co-founded by Aubrey McClendon, the late wildcatter. It is a rough time to be planning new shale wells anywhere, but especially in Wyoming’s Powder River Basin, an expensive and geologically complex place. “It seems like every time we make a big strategic step forward we get snake-bitten,” said Chesapeake board member Archie Dunham, previously chief executive of Conoco Inc. Mr. Dunham has purchased more than $9 million worth of Chesapeake stock in recent weeks. Chesapeake’s challenges exemplify how oil’s recent price drop is jeopardizing the recoveries of shale drillers still trying to regain their strength after the last crash in prices in 2014 and 2015. The company’s share price has fallen nearly 56% since early October, compared with a 40% drop in a broad index of U.S. producers.
PA E&P Companies to Pay Impact Fees. About 17 natural gas companies are expected to get invoices early this year for millions of dollars of impact fees they owe on low-producing shale wells after a state Supreme Court decision last week. The Pennsylvania Public Utility Commission is in the process of generating invoices for shale gas producers who disputed and did not pay impact fees on some wells in recent years based on a legal debate about what counts as a “stripper well” that is exempt from the annual fees. The state Supreme Court settled the debate Dec. 28, ruling that only wells that fall below the production threshold every month of the year can be considered stripper wells. Now the PUC is readying to collect fees that were left in limbo during the years-long case. “We estimate that the recent Pa. Supreme Court decision will involve hundreds of wells with outstanding impact fees totaling millions of dollars,” PUC spokesperson Nils Hagen-Frederiksen said. The agency does not yet have precise figures. Last June, Mr. Hagen-Frederiksen said 17 producers disputed that they owed fees on more than 300 wells due to the stripper well debate. That reduced the impact fee collection for 2017 by $6.1 million.
PA Permits December 13, 2018 to January 3, 2019
County Township E&P Companies
- Allegheny Forward EQT
- Allegheny Forward EQT
- Butler Jackson Penn Energy
- Butler Penn XTO
- Butler Penn XTO
- Fayette German Chevron
- Fayette German Chevron
- Fayette German Chevron
- Greene Center Rice
- Greene Center Rice
- Greene Center Rice
- Greene Center Rice
- Greene Franklin Rice
- Greene Gray Rice
- Greene Jackson Rice
- Greene Jackson Rice
- Greene Jackson Rice
- Greene Richhill CNX
- Lycoming McNett Chief
- Lycoming McNett Chief
- Lycoming McNett Chief
- Sullivan Elkland Chief
- Sullivan Elkland Chief
- Sullivan Elkland Chief
- Susquehanna Apolacon Repsol
- Susquehanna Apolacon Repsol
- Susquehanna Apolacon Repsol
- Susquehanna Apolacon Repsol
- Susquehanna Jackson SWN
- Susquehanna Jackson SWN
- Susquehanna Jackson SWN
- Susquehanna Jackson SWN
- Susquehanna Jackson SWN
- Tioga Delmar Seneca
- Washington Smith Range
- Washington Smith Range
- Washington Smith Range
- Washington Smith Range
- Washington Somerset Rice
- Washington Somerset Rice
- Washington Somerset Rice
- Washington Somerset Rice
- Washington Somerset Rice
- Westmoreland Salem Apex Energy
- Westmoreland Salem Apex Energy
- Wyoming Mehoopany Chesapeake
- Wyoming Mehoopany Chesapeake
- Wyoming Mehoopany Chesapeake
OH Permits for weeks of December 15, 2018, December 22, 2018 and
December 29, 2018
County Township E&P Companies
- Belmont Kirkwood Ascent
- Belmont Kirkwood Ascent
- Belmont Kirkwood Ascent
- Belmont Kirkwood Ascent
- Belmont Kirkwood Ascent
- Belmont Richland XTO
- Belmont Richland XTO
- Harrison Moorefield Gulfport
- Jefferson Wayne Ascent
- Jefferson Wayne Ascent
- Jefferson Smithfield Ascent
- Jefferson Smithfield Ascent
- Jefferson Smithfield Ascent
- Jefferson Smithfield Ascent