Shale Directories Seminars
March 21, 2019
North Canton, OH
Upstream PA 2019
April 17, 2019
Penn Stater Conference Center
State College, PA
Appalachian Storage Hub Conference
June 6, 2019
Hilton Garden Inn
Southpointe, Canonsburg, PA
Latest facts and a rumor from the Marcellus, Utica, Permian, Eagle Ford, and Bakken Shale Plays
Pipeline Deals Coming. Energy pipeline companies could see a new wave of deal-making if the latest buyout is any indicator. Pipeline company Targa Resources Corp. (ticker: TRGP) announced on Tuesday that it is selling a 45% stake in its North Dakota assets to private equity firms Blackstone Group (BX) and GSO Capital Partners, for $1.6 billion in cash. The deal gives the firms stakes in 480 miles of oil-gathering pipelines, 125,000 barrels of storage, and 260 miles of natural gas-gathering pipelines in the Badlands of North Dakota. Targa stock reacted positively, gaining more than 6% in trading on Tuesday, while the S&P 500 was mostly flat. Targa stock has been a winner this year, returning 34%. It has outperformed both the S&P 500 and the broader energy pipeline sector, which has gained 16%, according to returns for the Alerian MLP Index, a basket of energy master limited partnerships, or MLPs. The Alerian index also reacted positively, rising 1.7% in trading on Tuesday. Vulnerabilities in PG&E’s infrastructure combined with the impact of climate change contributed to hundreds of wildfires in California, including the deadly Camp Fire in 2018. Here’s a look at upgrades to the utility giant’s power grid that might have prevented these blazes. These kinds of buyouts aren’t unusual for pipeline companies and MLPs. But the multiple suggests that their assets could fetch higher values in private transactions or mergers.
Court Supports FERC on Mountain Valley Pipeline. A trio of appellate court judges yesterday struck down a broad challenge to the federal government’s approval of the Mountain Valley natural gas pipeline. The U.S. Court of Appeals for the District of Columbia Circuit threw out a long list of arguments against the Federal Energy Regulatory Commission’s authorization of the 300-mile Appalachian natural gas transport project. The consolidated case featured many disputes from several environmental groups, including a critique of FERC’s analysis of climate impacts from the pipeline. “Petitioners raise sixteen different challenges to FERC’s environmental assessment of the Project and subsequent issuance of the certificate authorizing Mountain Valley to construct and operate the pipeline subject to several conditions described in the Certificate Order,” the judges wrote. “None of the challenges succeeds.” Legal experts were eager to parse the climate implications of the order, which comes as FERC is preparing to defend a controversial change to its handling of upstream and downstream greenhouse gas emission analysis.
NiCHe, Second LNG Plant in Bradford County, PA. Dominion Energy and Rev LNG announced last October a joint venture to create new smaller LNG plants, the first of which will be built in Wyalusing. The JV is called NiCHe, LLC and is meant to supply LNG to “commercial and industrial users to local gas utilities and power generation facilities.”
There are big differences between the new Dominion/REV LNG facility and the planned New Fortress facility. NiCHe will serve local and regional customers, while New Fortress is exporting their LNG to other countries (and to California).
NiCHe’s daily liquefaction capacity is approximately 50,000 gallons per day, while the New Fortress facility will liquefy up to 3.5 million gallons per day. And while New Fortress eventually wants to use railroad to ship its LNG, initially shipments go via LNG tanker trucks, some 10-15 of them *per hour* entering and leaving the facility. NiCHe will see between 1-6 truck trips *per day* at its facility, depending on demand. In other words, it is an entirely different scope of operation between the two facilities.
Scope of NiCHe operation is:
— NiCHe partnership will enable Dominion Energy to develop a full spectrum of LNG services to meet needs of customers with limited access or constrained natural gas infrastructure
— First project will leverage sustainable attributes, including access to biogas and sustainably produced gas
NiCHe will provide affordable supplies of LNG to a wide range of customers, from commercial and industrial users to local gas utilities and power generation facilities.
NiCHe’s first project, Towanda, will be a 50,000-gallons/day liquefaction and storage facility located in Wyalusing, Pa. Construction on Towanda is expected to begin in the Spring of 2019 with the project scheduled to be in-service for the 2019-2020 winter heating season.
Indian Oil Signs Its First U.S. Oil Deal. Indian Oil Corp, the country’s top refiner, has signed its first annual deal to buy U.S. oil, paying about $1.5 billion for 60,000 barrels a day in the year to March 2020 to diversify its crude sources, its chairman said on Monday. IOC is the first Indian state refiner to buy U.S. oil under an annual contract, in a deal that will also help boost trade between New Delhi and Washington. The company has previously purchased U.S. oil from spot markets and signed a mini-term deal in August to buy 6 million barrels of U.S. oil between November and January. IOC chairman Sanjiv Singh said the annual contract will begin from April. He declined to give the name of the seller or pricing details, citing confidentiality. A trade source, who is not authorized to speak to media, said IOC signed the deal with Norwegian oil company Equinor which will supply a variety of U.S. crude grades. Equinor, which has set up an office in New Delhi to support oil marketing and trading, declined to comment. Indian Oil buys about 75 percent of its oil needs through long-term deals, mostly with OPEC nations. The term deal will help cut IOC’s dependence on OPEC crude, said Sri Paravaikkarasu, head of east of Suez oil for consultants FGE in Singapore.
Bakken Sets Record in December. North Dakota set records in December for both crude oil and natural gas production, data from the state Department of Mineral Resources show.
Crude production in December topped 1.40 million barrels per day (Mmbpd), up from November’s 1.39 Mmbpd. Total production for December was 4.44 million barrels (Mmbbl), up from 41.30 Mmbbl in November.
December’s natural gas production was 2.65 billion cubic feet per day (Bcf/d), up from 2.52 Bcf/d in November, Kallanish Energy learns. Total gas production in December was 82.15 Bcf, up from 75.63 Bcf one month earlier.
Director of Mineral Resources Lynn Helms said the month-over-month increase in crude production was roughly 25,000 barrels per day higher, or a 2% increase. Natural gas production was up 5% month-over-month.
“We have returned to the days of more rapid gas production than oil,” Helms said, the Williston Herald newspaper reported. “That will be the challenge. Building infrastructure to keep up with that.”
Flaring decreased to 19%, giving the state an 81% capture rate. The capture goal, however, is 88%. The total amount of gas flared was 513 million cubic feet per day (Mmcf/d), a decrease of 15 Mmcf/d month-over-month.
Permitting jumped from 92 in December, to 219 in January. Rig counts have been steady, in the mid-60s, reaching 64 last Friday. Well completions were up for December, to 110 vs. 85 for November.
While production for December reached an all-time high, Helms said the trend will be relatively short-lived, mainly due to weather, the Herald reported.
“Short-term, January should be OK,” he said. “But February temperatures and snowfall have been really difficult for companies to work in.”
Oil Export Record This Week. The United States exported a record amount of crude oil last week, as output from the nation’s shale fields continues to surge. The nation shipped out just over 3.6 million barrels a day in the week through Feb. 15, according to the U.S. Energy Information Administration. That easily topped the previous all-time high of 3.2 million bpd set in November. Also last week, U.S. production hit a record 12 million bpd. The reading is subject to significant revision, but this is the first time EIA’s weekly report has shown American output hitting the threshold. The weekly reading has been hovering at 11.9 million bpd for the last five weeks. Much of that growing output is coming from U.S. shale fields, where drillers use advanced methods to squeeze crude oil and natural gas from rock formations. On Tuesday, EIA forecast output from seven major U.S. shale fields will rise by 84,000 bpd next month to 8.4 million bpd.
O&G Industry Repairs 639 Miles in Appalachian. The oil and gas industry is exclusively spending millions on public infrastructure projects. Data from eight county engineers in Appalachia shows that 639 road miles have been improved to the tune of $302 million. That contribution comes directly from industry dollars, not taxpayer dollars. This has all been done through road-use maintenance agreements that are directly connected to drilling permits, a process initiated by producers, pipeline companies and industry affiliates. It assesses the route that our traffic is going to take before the truck leaves its bay. More often than not, the road needs to be improved before we start hauling, which the industry will happily do. That could involve a full-depth reclamation, paving, guardrails or slip repairs. We cannot simply be the fixer for all issues, particularly on roads that we share with neighbors in the community, trash haulers, industrial trucks, school buses and anyone else. We are however, going to continue to do our part.
TX Permits Up in January. The Railroad Commission of Texas (Rct) in January 2019 issued 1,196 original drilling permits, up slightly from 1,166 permits issued in January 2018, Kallanish Energy reports.
The January 2019 total included 1,102 permits to drill new oil or gas wells, seven to re-enter plugged well bores and 87 for re-completions of existing well bores.
The breakdown of well types for those permits is 303 oil, 53 gas, 732 oil or gas, 88 injection, three service and 17 “other” permits.
In January 2019, the commission processed 742 oil, 245 gas, 29 injection and four other completions. That compares to 739 oil, 179 gas, 44 injection and one other completions in January 2018.
Total well completions processed for 2019 year-to-date are 1,020, up from 963 recorded in the same period in 2018.
The top three areas for permits to drill oil and gas wells were the Midland area, with 622 permits, followed by the San Antonio area, with 175, and the San Angelo area, with 110.
The top area for new oil completions were the Midland area (350), followed by the Refugio area (105) and the San Antonio area (102). For new gas completions, the top areas were Midland (93 permits), followed by San Antonio (42), and East Texas (31 permits).
Eclipse Beats 4th Qtr. Guidance. Pennsylvania-based Eclipse Resources reported fourth-quarter 2018 average net production of 404.5 million cubic feet-equivalent per day (Mmcfe/d), up 8.9%, and full-year production of 343.2 Mmcfe/d in the Appalachian Basin, Kallanish Energy reports
Both figures were above the high end of the company’s previously released guidance and analysis consensus estimates.
In Q4, the company’s production in the Marcellus and Utica Shale plays was 72% natural gas, 16% natural gas liquids and 12% oil. For full-year 2018, the mix was 72% gas, 17% NGLs and 11% oil.
The company also reported that, as of Dec. 31, 2018, its proved reserves were 1.86 trillion cubic feet-equivalent (Tcfe), a 28% increase from one year earlier.
The 2018 reserves were 82% natural gas, 11% NGLs and 7% oil, said the company, which is headquartered in State College, Pennsylvania.
Last August, Eclipse Resources announced it was acquiring Texas-based Blue Ridge Mountain Resources in an all-stock deal to create one of the largest players in the Utica Shale. The deal has been approved by stockholders of both companies.
John Reinhart. Blue Ridge president and CEO will become president and CEO of the combined company.
Northern Access Pipeline Update. With a recent federal court decision in the state of New York, the Northern Access pipeline project of National Fuel is moving forward, which would mean more jobs in McKean County. On Wednesday, Carly Manino, spokesperson for National Fuel, explained the utility company doesn’t expect smooth sailing, but is still committed to moving ahead. She spoke about the economic impact the project will have, both on New York and to a lesser degree, on Pennsylvania. “The Northern Access project will support new and growing employment at National Fuel, in addition to good-paying local jobs within the building trades during construction, and is estimated to increase annual property tax receipts by $11.8 million for four New York counties, with an additional one-time sales tax impact of $6.6 million for the same four New York counties,” Manino said. “Twelve school districts within those counties will benefit from the annual incremental increase in tax revenue.” Pennsylvania will see a benefit from the pipeline, too, as it is to begin in Sergeant Township. The 96.49 miles of 24-inch diameter pipeline would begin in Clermont and end at National Fuel’s Porterville compressor station in the town of Elma, N.Y.
DUC’s Keep Climbing. The number of drilled, but uncompleted wells, aka, Duc’s, jumped 2.4% from December to January, the latest Energy Information Administration Drilling Productivity Report (Dpr) reveals.
A total of 207 Ducs were added from December to January, with the total growing to 8,798, from 8,591, Kallanish Energy reports.
Five of the seven most prolific unconventional basins/plays added Ducs, while the other two saw their drilled, but uncompleted wells total fall.
The biggest increase by far was recorded in the Permian Basin, which added 205 Ducs from December to January, climbing to 4,170, from 3,965. The Eagle Ford Shale play added 29 Ducs from December to January, climbing to 1,597 from 1,568.
The Anadarko added four Ducs, increasing to 1,085, while the Haynesville and Niobrara each added three Ducs, to 205 and 519, respectively.
Appalachia (the Marcellus and Utica Shale plays combined) and the Bakken each saw their Duc total fall from December to January. Appalachia’s total falls by 22, to 507, while the Bakken’s Duc total drops by 15, to 715.
PA Permits February 14, to February 21, 2019
County Township E&P Companies
- No new permits last week.
OH Permits for week of February 16, 2019
County Township E&P Companies
- No new permits last week.