Facts & Rumors # 349 September 9, 2019

Shale Directories Conferences

7^th Annual Utica Summit
October 10, 2019
Walsh University
North Canton, OH

www.uticasummit.com

Shale Insight Conference
October 22-24, 2019
David Lawrence Convention Center
Pittsburgh, PA

7^th Annual Midstream PA 2019
November 12, 2019
Penn Stater Conference Center
State College, PA

Latest facts and a rumor from the Marcellus, Utica, Permian, Eagle Ford, and Bakken Shale Plays

The Constitution Pipeline Is Still Very Much Alive! Williams’ 124-mile natural gas pipeline in Pennsylvania and New York has been stalled since April 2016, after New York regulators denied a needed water permit for the project, Kallanish Energy reports.

But that changed last week when the Federal Energy Regulatory Commission ruled New York’s Department of Environmental Conservation had, in effect, waived its water authority by not acting on the permit in a timely and appropriate fashion. The Ferc vote was 4-0.

Sponsors are ‘evaluating new steps’

In a statement, Oklahoma-based Williams said Constitution sponsors are “evaluating next steps for advancing the project.” The sponsors also said the pipeline represents much-needed energy infrastructure in a region where consumers have been forced to pay higher prices for natural gas because of pipeline constraints.

The project still needs a permit from the U.S. Army Corps of Engineers and several state permits. So, it appears construction is closer but not imminent, as further appeals by New York and environmental groups are also expected.

Ferc agreed to reconsider its January 2018 decision that New York’s permit would not be waived. “We reverse the declaration in the Declaratory Order issued on Jan. 11, 2018, and conclude that N.Y. Dec waived its authority,” Ferc said in its ruling.

Court of Appeals said Ferc could look again

The U.S. Court of Appeals for the District of Columbia had ruled Ferc could take another look at the pipeline that has been blocked by New York’s Dec and Gov. Andrew Cuomo.

Ferc had asked the appeals court to remand the Constitution case back to the federal agency for further proceedings.

The reconsideration comes after the appeals court last January ruled in the case of an Indian tribe and a hydroelectric relicensing in California and Oregon in a Ferc case.

Application resubmitted twice

The court struck down the practice of applicants withdrawing and then resubmitting applications with state endorsement to avoid the state being required to make a decision within a year.

Williams had withdrawn and then resubmitted its New York application twice at New York’s request.

New York’s refusal to issue the water certification blocked pipeline construction and was seen as part of campaign by Cuomo to block shale gas development in the state.

Supreme Court upheld lower court’s ruling

Williams and its partners lost one legal fight on the pipeline that went to the U.S. Supreme Court. It upheld a lower court’s decision backing the state of New York. A new appeal is pending in federal court.

The pipeline’s New York application was filed in April 2013. Ferc approved the project in December 2014, pending state approval.

In April 2016, New York rejected the application for the project, effectively blocking the pipeline from northeast Pennsylvania into New York to connect to pipelines to New York City and New England.

It would run from Dimock, Pennsylvania, to Schoharie County in New York. It would transport 650 million cubic feet per day (Mmcf/d) of Marcellus Shale natural gas. It’s being developed by subsidiaries of Williams, Cabot Oil & Gas, Duke Energy and AltaGas Ltd.

Late last year, Ferc had approved a two-year extension for the Constitution Pipeline. The extension to December 2020 will give the companies another two years to win needed approvals for the $1 billion project.

Permian Shake Up Coming. Maturing shale will soon shake up Permian energy industry. Energy producers and analysts alike have said the Permian Basin’s shale industry is in its early innings. But the industry is rapidly maturing, and a new study cautions that transition means an industry shakeup is looming for the Permian Basin. A paper commissioned by Hastings Equity Partners, in partnership with the University of Houston Energy Research, notes that in the early days of the shale revolution, independent producers were able to acquire leases, assets and mineral rights more nimbly than the majors, and were profitable.

TX Slowdown Looms. Texas energy sector grows, but slowdown looms. The Texas energy sector has managed to add jobs and increase oil and gas production in the past 12 months despite lower oil prices, but fears of a slowdown loom for the rest of this year and into 2020, according to a midyear “State of Energy” report. The new report from the Texas Independent Producers & Royalty Owners Association highlights the industry’s ability to advance technologically and gain efficiencies, but it also warns that slowing activity levels and economic headwinds could make for a challenging future – at least in the near term.

Drilling Down: Japanese Company Ready to Start Drilling. Japanese company prepares to drill its first Eagle Ford wells. Houston Chronicle. Japan’s biggest oil producer is rolling up its sleeves and getting to work in the Eagle Ford Shale of South Texas. Tokyo-based Inpex bought numerous oil leases and production sites from San Antonio exploration and production company GulfTex Energy in March. Nearly six months later, the company’s Houston subsidiary Inpex Eagle Ford LLC has filed for 11 drilling permits with the Railroad Commission of Texas.

PSU Finds Easier Way to Locate NatGas. A new method for exploring natural gas in the Marcellus Shale, developed by Penn State researchers, shows potential high yield areas can be found more easily and with lower costs. Traditionally, natural gas hot spots are determined using a combination of current well production data and various geological tests. The researchers, in work published in SPE Reservoir Evaluation & Engineering, detailed a method for approximating available gas in untapped areas using well production data taken from more than 5,600 existing wells.

OH Oil & NatGas Production for 2^nd Qtr. Oil production increases 9.5% in Ohio’s Utica Shale. Oil production in Ohio’s Utica Shale increased by 9.5% in the second quarter 2019, according to new data released on Tuesday by the Ohio Department of Natural Resources. Oil production jumped from 4,488,104 barrels in 2Q 2018 to 5,813,755 barrels in 2Q 2019, Kallanish Energy reports. Oil production in 1Q 2019 was 5,073,536 barrels. Ohio also reported that natural gas production increased by 0.8% from 2Q 2018 to 2Q 2019. NOTE: Natural Gas Intelligence also reports.

WV Horizontal Wells in Legacy Fields. More Horizontal Wells Planned in West Virginia Legacy Oilfields. Viper Capital Partners LLC, a Houston-based investment firm, has acquired rights across two conventional oilfields in western West Virginia, where an affiliate plans to develop Berea Sandstone wells with shallow horizontal drilling technology.

Exxon and Chevron Look for More Deals. Exxon, Chevron see consolidation in top U.S. shale field. The two largest U.S. oil and gas companies on Tuesday left the door open for more acquisitions in the country’s top shale field. Exxon Mobil Corp (XOM.N) expects to see industry consolidation to happen “over some period of time,” in the Permian Basin in west Texas and New Mexico, Chief Executive Darren Woods told investors at a Barclays energy conference in New York. If Exxon sees an opportunity it has the balance sheet to “be in a position to transact on that,” Woods said, but he added that “time’s on our side.” Chevron Corp (CVX.N) also will take an “opportunistic” approach in the basin, said Jeff Gustavson, vice president of Chevron’s Mid-Continent business, at the Barclays conference.

TX Crude Production Jumps in June. Texas reported initial crude oil production in June 2019 of 97,530,112 barrels and natural gas production of 696,927,530 thousand cubic feet, Kallanish Energy reports.

Those are preliminary totals and will grow as additional data is filed with the Railroad Commission of Texas that oversees oil and gas drilling.

In June 2018, the preliminary reported oil production was 88,859,650 barrels that grew to 113,941,174 barrels and the natural gas production grew from 615,213,185 mcf to 744,918,082 mcf.

The average daily production of oil jumped from 2,961,988 barrels in June 2018 to 3,251,004 barrels in June 2019. That is an increase of 9.8%.

Average daily production of natural gas increased from 20,507,106 mcf in June 2018 to 23,230,918 mcf in June 2019. That is a hike of 13.2%.

That production came from 177,420 oil wells and 89,539 gas wells.

The rail commission reports that total Texas production from July 2018 through June 2019 was 1.396 billion barrels of crude oil and 9.3 trillion cubic feet of natural gas.

The top 5 counties for oil production in June were Midland, Karnes, Reeves, Martin and Loving.

The top 5 counties for natural gas were Reeves, Webb, Tarrant, Midland and Karnes.

The top 5 counties for condensate were Reeves, Loving, Culberson, De Witt and Dimmit.

PA Permits August 29, to September 5, 2019

County Township E&P Companies