Shale Directories Conferences
6th Annual Midstream PA 2019
November 12, 2019
Penn Stater Conference Center
State College, PA
Marcellus Utica Midstream
December 3 – 5, 2019
David L. Lawrence Conference Center
Appalachian Basin Real Estate Conference
December 11 & 12, 2019
Latest facts and a rumor from the Marcellus, Utica, and Permian, Eagle Ford Plays
NatGas Exports Double. U.S. net natural gas exports averaged 4.1 billion cubic feet per day (Bcf/d) through the first half of 2019 — more than double the average net exports in 2018 (2.0 Bcf/d), the Energy Information Administration reports.
The U.S. became a net natural gas exporter on an annual basis in 2017 for the first time in almost six decades.
While the U.S. exports natural gas by pipeline to Canada and Mexico, liquefied natural gas exports is where much of the recent increase in total exports comes from, and is a result of more LNG facilities coming online.
LNG exports up 37%
Total U.S. exports of LNG through the first half of 2019 were 37% higher compared with the same period in 2018. Total U.S. LNG export capacity as of June 2019 was 5.4 Bcf/d across four facilities and nine liquefaction trains.
Two new liquefaction units, trains, came online in the first half of 2019: Cameron LNG Train 1 in Louisiana, and Corpus Christi LNG Train 2 in Texas.
Cameron LNG was the fourth U.S. LNG export facility placed into service since February 2016. Cameron LNG, which will have a capacity of 1.7 Bcf/d when its three liquefaction trains are completed, shipped its first cargo in May (as part of the initial commissioning process) and then another one in June before ramping up operations in July and August.
Corpus Christi LNG Train 2, with a capacity of 1.2 Bcf/d, shipped its first cargo in June and reached substantial completion in September.
Total US LNG export capacity to jump 81.6%
More LNG facilities have come online in the second half of 2019: Freeport LNG in Texas, with a capacity of 2.0 Bcf/d; and Elba Island in Georgia, with a capacity of 0.3 Bcf/d, both shipped their first commissioning cargos.
These two new LNG export facilities, along with the completion of Cameron LNG, will increase U.S. LNG export capacity 81.6%, to 8.9 Bcf/d by the end of 2019, from 4.9 Bcf/d at the end of 2018.
Although U.S. LNG exports have grown substantially, most U.S. natural gas trade is transported via pipeline across shared borders with Canada and Mexico.
Gas exports via pipeline exceed line imports
In the first half of 2019, net exports of natural gas by pipeline to Mexico grew 5%, and net exports of natural gas by pipeline to Canada remained relatively flat.
In every month from April through August, U.S. natural gas exports by pipeline have exceeded natural gas imports by pipeline — the longest consecutive stretch of exporting more natural gas by pipeline than importing by pipeline on record.
U.S. pipeline export capacity to Canada grew in the last few months of 2018 when the second phase of both the Rover Pipeline and the new Nexus pipeline entered service, transporting natural gas from the Marcellus and Utica Shale plays to the St. Clair point of exit northeast of Detroit, Michigan.
Total U.S. natural gas exports to Canada reached 3.3 Bcf/d in February 2019, the highest level this year as of August 2019.
U.S. pipeline net exports of natural gas to Mexico in the first half of 2019 averaged 4.9 Bcf/d, 0.4 Bcf/d higher than the average for the first half of 2018.
Pipeline deliveries to Mexico grew in 2019 as new projects such as the Texas-Tuxpan pipeline transported natural gas from the Permian Basin to demand centers in Mexico.
U.S. natural gas exports by pipeline to Mexico reached all-time highs of 5.2 Bcf/d in June 2019, and 5.3 Bcf/d in July 2019.
EIA sees net natural gas exports to continue rising through the end of 2019 as additional LNG export capacity comes online and pipeline infrastructure in Mexico is placed into service.
EIA expects the U.S. to continue to export more than it imports with net natural gas exports averaging 4.6 Bcf/d in 2019, and 7.2 Bcf/d in 2020.
EQT 3rd Qtr. Financial Update. EQT Corp. reported an increase in overall third-quarter 2019 sales, while revenue and profit fell from one year ago, Kallanish Energy reported Thursday.
For the three months ended Sept. 30, total sales rose to 380.82 billion cubic feet-equivalent, up 2% from 374.24 Bcfe one year ago. The average realized price fell to $2.47 per thousand cubic feet-equivalent, from $2.76/Mcfe.
“Following the annual meeting in July, we quickly added key leaders needed to complement the existing EQT team. These leaders have a proven track record of operating EQT’s assets to generate basin-leading operational performance and they’re off to a great start,” said president and CEO Toby Z. Rice.
“We expect to save approximately $65 million of gross general and administrative costs in 2020 consisting of $35 million reduction in SG&A expense and a $30 million reduction in capitalized overhead,” Rice added.
EQT has successfully laid the tracks for large-scale combo development by establishing a stable master operations schedule, according to Rice. Combo development consists of properly spaced large-scale projects to develop 10 to 25 wells for multiple pads simultaneously. This is key to delivering consistently low well costs while maximizing the potential of undeveloped acreage, Rice said.
Drilling efficiency in the third quarter saw Marcellus Shale play drilling speeds up 50% relative to the second quarter and Utica drilling speeds have increased 20%.
“To summarize the 100-Day Plan has been a massive success in kick-starting our evolution,” Rice said. “We are on track to deliver on the well cost savings we promised during the campaign and we are doing it faster than we thought which sets EQT up for success in 2020 and beyond. We plan to delever EQT to below 2x net debt to adjusted EBITDA. And in this gas price environment we plan to get there by reducing absolute debt through free cash flow generation and asset monetizations rather than outspending cash flow to grow EBITDA.”
Millions in free cash flow
Rice added EQT’s preliminary 2020 forecast will generate between $200 and $300 million of adjusted free cash flow, despite “cyclically low natural gas prices.” EQT intends to reduce absolute debt by at least $1.5 billion by mid-year 2020 to maintain investment-grade metrics.
In the third quarter of 2019, EQT reported a loss from continuing operations of $361 million, or $1.41 per diluted share, compared to a loss from continuing operations for the same period 2018 of $127 million, or a loss of $0.49 per diluted share.
The increase in the reported loss was attributable primarily to the unrealized loss (totaling $261.09 million) on the investment in Equitrans Midstream, lower operating revenues and higher proxy, transaction and reorganization and other selling, general and administrative (SG&A) costs, partly offset by lower impairment costs as a result of the company’s divestitures of its Permian and Huron assets in 2018.
Adjusted free cash flow jumps 41%
Net cash provided by operating activities decreased by 65% and adjusted free cash flow increased 41%. Adjusted free cash flow for the third quarter 2019 of $178 million includes the impact of an increase in the royalty and litigation reserve of $37 million and $77 million of proxy, transaction and reorganization costs.
During the quarter, EQT horizontally drilled 15 Marcellus wells in Pennsylvania with an average lateral length of 12,820 feet, four Marcellus wells in West Virginia with an average lateral length of 7,100 feet, and three Utica wells in Ohio with an average lateral length of 8,650 feet.
Drilling speeds improved by 50% in the Marcellus and 20% in the Utica, as compared to the prior quarter. EQT is currently running three horizontal rigs and plans to remain at that level through the end of the year.
Completed 31 wells
EQT also completed 27 Marcellus wells in Pennsylvania with an average lateral length of 11,300 feet, and four Utica wells in Ohio with an average lateral length of 11,340 feet. EQT is currently running three frac crews and plans to remain at that level through the end of the year.
The company is renegotiating key service contracts and anticipates executing new agreements in the current favorable service cost environment.
EQT’s third-quarter net loss was $361.03 million, or $1.41 per share, on revenue of $951.58 million, compared to year-ago net loss of $39.69 million, or $0.15/share, on revenue of $1.05 billion.
Cabot 3rd Qtr. Financial Update. Despite third-quarter production for Cabot Oil & Gas increasing 18% from Q3 2018, the company is studying two plans, including one that would scale back operations in late 2020 to maintenance levels, due to continued low commodity prices, Kallanish Energy reports.
The Texas-based company reported daily production of 2.4 billion cubic feet of natural gas-equivalent per day in the quarter, up from 2.03 Bcfe/d one year ago.
Natural gas production jumped from 186.5 Bcf in Q3 2018, to 220.7 Bcf in Q3 2019. It said its Appalachian Basin production in the quarter was 100% natural gas.
The company drilled 22 wells and completed 29 wells in the most recent quarter.
‘Strong Q3 19 results’
Cabot has “strong 3Q19 results” and its outlook for early 2020 has been maintained, said analyst Gabriele Sorbara of The Williams Capital Group in New York City. But that could change in late 2020, if natural gas prices remain low, he noted.
Cabot elaborated a bit on its two possible financial plans for 2020. One would produce full-year production growth of 5%, based on capital spending of $700 million to $725 million. That plan is predicated on a NYMEX price assumption of $2.50 per MmBtu.
With that program, the company would generate free cash flow of $360 to $385 million, it said.
Possible maintenance mode program
If prices remain low, Cabot will switch to a maintenance mode program in late 2020. That plan would hold fourth-quarter 2020 production levels flat to the midpoint of the Q4 2019 production guidance range (2% to 3% growth in full-year production per debt-adjusted share) based on a $575 million capital budget. That would position the company for 2021 growth, Cabot said.
The company will likely decide in February 2020 how it will proceed.
“We continue to maintain a cautiously optimistic outlook for natural gas markets in 2020, driven in large part by our expectation for a pronounced decrease in operating activity across North American natural gas basins due to continued price weakness,” said president, chairman and CEO Dan Dinges, in a statement.
Lower natural gas prices will determine the program
“However, we are prepared to modify our 2020 plan early next year in response to lower anticipated natural gas prices, if necessary, with a continued focus of delivering a combination of strong free cash flow generation, high return on capital employed, consistent return of capital to shareholders, including our recent dividend increase, low financial leverage and growth in production and reserves per share, all of which are provided by both of the 2020 scenarios we are currently evaluating,” he said.
The company reported Q3 2019 net income of $90.4 million, or 22 cents a share, compared to $122.3 million, or 28 cents a share, in Q3 2018.
Third-quarter 2019 adjusted net income was $119.7 million, or 29 cents per share, compared to $108.9 million, or 25 cents per share, a year ago.
It produced free cash flow in the quarter of $72.4 million.
Free cash flow up over 150%
“In the third quarter of 2019, Cabot increased free cash flow by over 150% compared to the prior-year period, driven by higher production volumes, lower per-unit operating expenses, improved basis differentials and reduced capital spending, despite a 23% reduction in NYMEX benchmark prices,” Dinges said.
The company returned $227.8 million to shareholders through dividends and share repurchases in the quarter. Cabot spent $197.5 million on capital spending in the third quarter.
The company’s Q3 2019 natural gas realized price was $2.11 per thousand cubic feet, a drop of 11% from Q3 2018.
SWN 3rd Qtr. Financial Upate. Southwestern Energy reported total third-quarter 2019 production jumped 8% from Q3 2018, Kallanish Energy reports.
Total production was 202 billion cubic feet-equivalent (Bcfe), including 158 Bcf of gas, 1.42 million barrels (MMBbl) of oil, and 5.9 MMBbl of natural gas liquids.
Gas production dipped from 215 Bcf and total production dropped from 252 Bcfe in Q3 2018. The company’s overall production was 22% liquids.
Beats cost reduction target
Oil production increased by 42% compared to Q3 2018, and NGLs increased by 14.1% in Q3 2019, the company said.
In the quarter, the company drilled 24 wells, completed 30 wells and placed 34 wells to sales. The average well cost for wells to sales in the quarter was $784 per lateral foot with an average lateral of 10,466 feet. That beat the company’s goal of a 25% cost reduction target.
In Southwest Appalachia, total production in the quarter averaged 913 million cubic feet-equivalent per day (Mmcfe/d), 27% growth over Q3 2018.
Natural gas production was 440 million cubic feet per day (MMcf/d), oil production was 15,400 Bpd and NGL production was 64,200 Bpd. The company said NGL volumes were reduced to capture greater value from ethane.
It drilled 14 wells, completed 16 wells and placed 21 wells to sales in the quarter in Southwest Appalachia. It brought to sales its fourth Upper Devonian well.
Production flat in northeast Appalachia
In Northeast Appalachia, total production was 1.3 Bcf/d, essentially flat from Q3 2018. In the quarter, the company drilled 10 wells, completed 14 wells and placed 13 wells to sales in that area.
The company said it has begun to see the benefit of a recently installed pad compression, resulting in an initial gross production uplift of 55 Mmcf/d. Those efforts are reducing the base decline and can be applied across a broader area, it said.
Southwestern Energy reported third quarter net income of $49 million, or 9 cents a share, which compares to a net loss of $29 million, or 5 cents a share, in Q3 2018.
Wells to sales at upper end of guidance
It said it expects to spend $1.15 billion on 2019 full-year capital spending and its wells to sales will be at the upper end of the company’s guidance.
In Q3 2019, its average realized prices were $1.87/Mcf for natural gas, $49.67 per barrel of oil, and $11.93/Bbl of NGLs. It noted year-over-year results are not comparable due to Fayetteville Shale assets that were sold in December 2018.
“In this volatile commodity environment, resiliency is key today and going forward. The intentional actions we have taken over time and continue to take to strengthen our balance sheet, coupled with operational execution, are all part of our deliberate transition back to free cash flow without compromising long-term value,” said president and CEO Bill Way, in a statement.
Williams 3rd Qtr. Financial Update. Oklahoma-based Williams reported third-quarter 2019 net income of $220 million, or 18 cents per share, Kallanish Energy reports, up from net income of $129 million, or 13 cents/share, in Q3 2018.
Cash flow from operations jumped from $746 million to $858 million. It reported adjusted income increasing from $243 million one year ago to $321 million in Q3 2019. Distributable cash flow jumped from $764 million in Q3 2018, to $822 million in the latest quarter.
It had quarterly revenue of $2.00 billion, down from the $2.30 billion in the year-ago quarter. “Our third-quarter 2019 results show why we’re so confident in the long-term sustainability of our business,” said president and CEO Alan Armstrong, in a statement.
“Even in the current challenging commodity environment, we once again delivered year-over-year growth in our key financial metrics and remain on track for our 2019 guidance,” according to Armstrong.
“Compared to third-quarter 2018, our net income increased by 7.1% and cash flow from operations rose 15% as our demand-driven natural gas strategy continues to drive earnings and steadily growing cash flows while maintaining strong dividend coverage,” he said.
Armstrong lauded the projects completed to expand the Transco pipeline system to be able to provide natural gas to the U.S. East Coast. He said he expects Transco shipments to increase from the current 17.2 million dekatherms per day, to more than 18 million dekatherms per day in time for the 2020-2021 heating season.
His company has also completed key pipeline projects in the DJ and Warnsutter basins in Colorado and Wyoming, respectively, Armstrong said.
Williams said net income benefitted from increased service revenue in the Atlantic-Gulf segment, primarily from the Transco expansion projects and, in the Northeast, gathering and processing segment driven by growth in gathering volumes, partially offset by a decline in West segment results due to lower commodity margins.
Those Transco projects include the Atlantic Sunrise and the Gulf Connector pipelines.
Antero 3rd Financial Update. Antero Resources reported third-quarter 2019 net daily natural gas-equivalent production averaged 3.37 billion cubic feet-equivalent per day, a 24% increase over Q3 2018, despite capital spending cutbacks, Kallanish Energy reports.
That production was 32% liquids, said the company, which has operations in the Appalachian Basin in Ohio and West Virginia.
The Colorado-based company said its drilling and completion capital spending in the quarter totaled $290 million, the lowest quarterly spending since its 2013 IPO.
Reducing full-year D&C spending
It also announced it’s reducing its full-year 2019 drilling and completion spending to a range of $1.28 billion to $1.3 billion, a 4% drop from its previously announced spending plan.
It also increased its full-year production guidance to the top end of the range, or about 3.25 billion cubic feet-equivalent per day (Bcfe/d), a 2% increase from the mid-point of the prior range of 3.15 to 3.25 Bcfe/d.
Antero reported a net loss of $879 million, or $2.86 per share in the third quarter 2019. That was largely due to a $1 billion non-cash impairment charge related to properties in the Utica Shale tied to lower future commodity prices, and an adjusted net loss of $150 million (non-GAAP), or 49 cents per share.
That Q3 2019 loss compares to a net loss of $154 million, or 49 cents per share in Q3 2018.
Progress in lowering cost structure
“Antero made substantial progress during the quarter toward lowering its overall cost structure,” said chairman and CEO Paul Rady, in a statement.
“Driven by our well cost reduction initiatives, we recorded our lowest drilling and completion capital in a given quarter since our IPO in 2013. Importantly, these savings led to a 4% reduction in our 2019 capital budget and a $100 million reduction since our initial 2019 budget announcement,” he said.
As a result of the company’s water-savings initiatives, especially blending its flowback and produced water, third-quarter lease operating expenses per Mcfe dropped 21% from the first half of 2019 and those costs are expected to drop an additional 15% in 2020, Rady said.
Sales on 33 Marcellus wells during quarter
In Q3 2019, Antero began sales on 33 Marcellus Shale wells with an average lateral length of 10,075 feet. For wells that had 60 days of data, the average rate per well was 21.4 million cubic feet-equivalent per day on choke and included 1,033 barrels per day of liquids.
It also drilled 23 wells in the quarter with an average lateral length of 11,500 feet in an average of 11 total days from spud to final rig release.
The company said it drilled an average of 6,000 lateral feet per day in the quarter, the highest quarterly rate in the company’s history. It also drilled a company record of 10,067 lateral feet at one well in 24 hours.
Antero said it expects to complete 110 to 120 wells in 2020, with an average lateral length of 12,100 feet. That would be a 14% increase in total lateral feet.
It’s expecting to begin sales from 115 to 125 wells in 2019, with an average lateral length of 10,200 feet. It will drill 120 to 130 wells in full-year 2019.
Montage Resources 3rd Financial Update. Montage Resources said it intends to maintain just one gross operated rig in the Appalachian Basin for the rest of 2019 and into 2020 due to low commodity prices, Kallanish Energy reports.
That will allow the company to balance free-cash flow and growth, while maintaining low financial leverage and a strong balance sheet with no near-term debt maturities, it said, in an operational update.
The company said it anticipates third-quarter 2019 production will be above the high end of the previously announced guidance of between 600-615 million cubic feet-equivalent per day (MMcfe/d).
It also said it’s used the recent commodity price volatility to opportunistically add to its hedge book, increasing 2020 natural gas hedges by approximately 30% and having an overall floor of roughly $2.65 on its 2020 natural gas hedged production.
President and CEO John Reinhart said, in a statement: “We continue to see the benefits from the execution of the integration strategy with the significant efficiency gains, cost reductions and shortened cycle times, coupled with the ongoing well outperformance contributing to the company’s ability to exceed the high end of the production guidance range.”
The company will release its Q3 2019 results on Nov. 7.
Montage Resources was renamed after the merger of Eclipse Resources and Blue Ridge Mountain Resources. That deal closed last February. It’s involved in the Marcellus and Utica Shale plays in Pennsylvania, West Virginia and Ohio.
The company has offices in State College, Pennsylvania, and Irving, Texas.
Natural-Gas Prices Jump as Producers Promise Restraint. WSJ Investors are rewarding energy companies who are promising to produce less energy. The producers that have glutted the market with cheap shale gas are finally relenting, dialing back drilling plans and pledging restraint after years of depressed prices battered their growth-centric business models.
CNX 3rd Qtr. Update. Independent producer CNX Tuesday reported a 7.8% in total third-quarter production over a year ago, while product sales prices dropped, and production costs inched up, Kallanish Energy reports.
For the three months ended Sept. 30, CNX recorded an average sales price for all products (natural gas, oil, condensate and natural gas liquids) of $2.51 per thousand cubic feet-equivalent (Mcfe), down sharply from $2.92/Mcfe one year ago.
Total production for the quarter increased by $0.02/Mcfe, to $1.99/Mcfe, from $1.97/Mcfe during the quarter ended Sept. 30, 2018.
Big jump in Marcellus sales
Marcellus Shale sales rose 27.9%, to 79.1 billion cubic feet, up from 61.9 Bcf one year ago. Utica Shale sales fell 16.0%, to 26.8 Bcf, from 31.9 Bcf, CNX reported.
Total sales rose 7.8%, to 128.3 billion cubic feet-equivalent, from 119.0 Bcfe. Average daily production jumped to 1.39 Bcfe, from 1.29 Bcfe one year ago.
“CNX accomplished a number of significant items in the third quarter: production costs and capital came in better than expected; we reconfigured our workflows and now expect $25 million in selling, general, and administrative (SG&A) cash cost savings in 2020 compared to the previous guidance; … and we turned-in-line 24 wells late in the quarter to set the company up for strong production in the fourth quarter,” said Nicholas J. DeIuliis, president and CEO.
Drilled 15 wells
During the quarter, CNX used up to three horizontal rigs and drilled 15 wells. The company currently has two rigs in operation, which it expects to run into 2020, along with one frac crew.
During the quarter, the company utilized three frac crews to complete 20 wells, which included 14 Marcellus Shale wells and six Utica Shale wells.
CNX has entered into a long-term contract with Evolution, an all-electric frac crew. The Evolution crew started operations in the second quarter of 2019 and is currently providing fuel savings of roughly $250,000 per well — a savings increase of approximately $70,000 per well over the prior expected savings.
10 Pennsylvania wells turned the Marcellus
CNX turned-in-line 24 wells in the third quarter, of which 10 were turned-in-line at the end of the third quarter. The 24 wells consisted of: 10 Marcellus Shale wells in Greene County, Pennsylvania; five Marcellus Shale wells in Tyler County, West Virginia; four Utica Shale wells in Marshall County, West Virginia; three Utica Shale wells in Greene County; and two Utica Shale wells in Monroe County, Ohio.
Third-quarter profit fell to $115.54 million, or $0.61 per diluted share, down from $125.03 million, or $0.59/share. Quarterly revenue jumped to $530 million, from $397.13 million one year ago.
Enterprise Products Partners Moves Forward with Expansion of Midland-to-ECHO pipeline. Houston pipeline operator Enterprise Products Partners is moving forward with plans for a multibillion-dollar expansion of its oil pipeline system that runs from West Texas to Houston. Enterprise already owns and operates a pair of pipelines that move a combined 1 million barrels of crude oil per day from a Permian Basin storage terminal in Midland County to the company’s ECHO Terminal off Beltway 8 and State Highway 3 in southeast Houston.
Permian Pipeline Launches Another Open Season. EPIC Crude Holdings, LP on Monday kicked off the third open season for the EPIC Crude Oil Pipeline, extending from the Permian Basin to the Texas Gulf Coast. According to a written statement Monday from EPIC, the current open season will last until 5 p.m. Central time on Dec. 17, 2019. The company added the two previous open seasons were successful and closed on July 26, 2018, and Sept. 28, 2018.
Mountain Valley Pipeline Updates. Work on the stalled Mountain Valley Pipeline (MVP) will be roughly 90% complete by year-end 2019, and the in-service date for the 303-mile natural gas pipeline has been revised to late 2020, Kallanish Energy reports.
That update was released last week by Mountain Valley Pipeline LLC.
The company also revised the price tag for the project to $5.3 billion to $5.5 billion. The old cost estimate was about $4.6 billion.
It said the three compressor stations and three interconnects are now 100% complete, about 80% of the pipeline work is complete and 50% of the right-of-way has been fully restored. The pipeline work includes 264 miles of pipe welded and in place, it said.
The delays will result in more mainline work in 2020 than had been planned, Mountain Valley said.
We are pleased with our progress during the past 10 months and, despite the few remaining permitting issues, we remain confident in the regulatory process and look forward to the successful in-service of this important infrastructure project,” said Diana Charletta, president and CEO, EQM Midstream Partners LP and operator of MVP, in a statement.
“We have encountered unforeseen development challenges; however, we continue to make progress towards ultimate completion.
She called the completion of the pipeline to be “critical to serving the growing demand for domestic natural gas in the mid-Atlantic and Southeast regions of the U.S.”
On Oct. 15, the Federal Energy Regulatory Commission halted construction in response to a ruling by the U.S. Fourth Circuit Court of Appeals over wildlife permits issued in November 2017. Stabilization work along the pipeline’s route is permitted.
The pipeline is designed to move Appalachian Basin natural gas to markets.
Construction has been halted at times by the FERC, the federal appeals court, state agencies and the U.S. Army Corps of Engineers.
The pipeline is owned by joint-venture partners EQT Midstream Partners, NextEra US Gas Assets, Con Edison Transmission, WGL Midstream and RGC Midstream.
MVP is a 42-inch natural gas pipeline system that will run from northwestern West Virginia to southern Virginia, flowing 2 billion cubic feet per day from the Marcellus and Utica shales. There are plans to extend the pipeline south from Virginia into North Carolina.
Drilling Ban Causes Problems Drilling ban proposals divide Democrats in U.S. oil states. Reuters. The top 10 Democratic contenders have called for ending new drilling leases on federal lands. Two front-runners, Senators Elizabeth Warren and Bernie Sanders, go much further with calls to ban hydraulic fracturing – the technology driving the Permian oil boom – on both federal and private land. Such policies face resistance in western states with vibrant drilling industries, including New Mexico and Colorado, where Democrats also control both the governor’s office and the legislature. That could open up a rift within the party and an inroad into such states for Republican President Donald Trump – the nation’s chief fossil-fuel booster – in 2020 election. “Without the energy effort in this state, no one gets to make education the top priority,” New Mexico Democratic Governor Michelle Lujan Grisham told the New Mexico Oil and Gas Association conference in Santa Fe on October 8.
The disastrous impact of a fracking ban on U.S. oil production. Forbes. The economic impact of a fracking ban on shale oil would be somewhat different from the impact on the U.S. gas market, given that lower oil production can be much more easily replaced by imports. At least in theory. As is the case with shale gas, shale oil wells tend to decline sharply, so that a fracking ban would quickly lead to much lower production. Applying decline rates to current production (and the EIA’s projected trend for 2020), total shale oil production would decline by 8 mb/d over the course of two years (January 2021 to December 2022). This is perhaps slightly overstated (see note at end), and would be potentially offset by in part increased conventional oil drilling, but there would easily be an increase of 4 mb/d in oil imports by the end of 2022. Even if oil prices did not rise, that translates to an additional $7.2 billion per month on the U.S. trade deficit.
Marathon Chairman and CEO to Retire. New President and CEO at MPLX GP LLC. Gary R. Heminger is retiring from Marathon Petroleum in 2020 after 45 years of service, Kallanish Energy reports.
The news of his retirement as chairman and CEO of the Ohio-based company was announced Thursday. He has served as president and CEO since the company’s spin-off from Marathon Oil in June 2011, and as chairman and CEO since 2016.
The ouster of Heminger was one goal of activist investor Elliott Management Corp., among others.
Heminger has also served as chairman and CEO of MPLX GP LLC, the general partner of midstreamer MPLX LP, since 2012. He will retire from MPLX concurrent with his Marathon Petroleum retirement.
Heminger will retire after the 2020 annual shareholders’ meeting. That fulfills his pledge to serve out an extended term after Marathon Petroleum and fellow refiner Andeavor announced merger plans two years ago.
The board of trustees has appointed a committee led by Edward G. Galante to consider internal and external candidates to succeed Heminger. A nationwide search is under way.
Heminger was hailed by lead independent director James E. Rohr for his “distinguished and successful leadership,” in a statement. He has earned the “unqualified and unanimous support of the board,” Rohr said.
Heminger said he was proud of his leadership team and thanked the team members for their “dedication, loyalty and diligence that has fueled the steady growth of the company.”
He joined Marathon in 1975 and served in a variety of roles over the years.
In other news, Michael J. Hennigan was named president and CEO of MPLX GP LLC, effective Nov. 1. He was president of the same organization. He succeeds Heminger as CEO of the general partner of MPLX. Heminger will remain chairman of the board of MPLX GP LLC.
SWN Returns Freshwater. Independent producer Southwestern Energy (SWN) said this week it’s returned more than 10 billion gallons of freshwater to the environment through its water usage approach and 10 company-sponsored water conservation projects nationwide.
This milestone reflects the company’s commitment to remaining “freshwater neutral” across its operations, meaning each gallon of freshwater used is replenished or offset. Southwestern has met this commitment for three consecutive years.
“Environmental stewardship is a SWN core value that guides our operational approach,” said Bill Way, president and CEO of Southwestern.
Southwestern’s commitment to remain freshwater neutral is achieved through conservation, reduction, protection and innovation, Kallanish Energy learns.
Since 2014, SWN has completed 10 water conservation projects across several states, including stream channel and habitat restoration; waterway and floodplain improvements; wetland creation; and aquatic habitat restoration.
The most recent project, completed earlier this year, is helping to restore the Cheat River’s Muddy Creek watershed in West Virginia, which had been severely impacted by third-party acid mine drainage unrelated to Southwestern’s operations.
Fracking Is the Bridge. A long, steady increase in U.S. gas production – much of it a byproduct of the shale oil boom – has prices for the fuel heading toward a 25-year low, with output outpacing U.S. consumption and expected to hit 91.6 billion cubic feet, up 10% over last year, according to government and industry estimates. Producers have sought to turn much of the U.S. surplus to liquefied natural gas (LNG) and export it. But even with rising sales in Asia and Europe, global LNG prices have tumbled this year as new export plants opened. This month, 16% of active U.S. drilling rigs were seeking natural gas, the lowest in more than 30 years, according to data from oilfield firm Baker Hughes Co.
Pittsburgh Mayor Trying to Kill Petrochemical Development in the Appalachian Basin. Bill Peduto says no additional petrochemical plants should come to Western Pa. Pittsburgh City Paper. Today at the Climate Action Summit, Mayor Bill Peduto announced his opposition to any additional petrochemical cracker plants that have been rumored for the Western Pennsylvania region. The region’s first cracker plant is currently being constructed in Beaver County by oil giant Shell. Cracker plants refine natural-gas into plastic pellets. The Shell cracker will likely be fueled by natural-gas fracked in the Southwestern Pennsylvania region. Since its construction, other oil and gas companies have been eyeing potential cracker plants in the Ohio River Valley, including ExxonMobil. Business interests have been hinting at the potential of four cracker plants in this region.
‘Pittsburgh isn’t in Beaver County:’ County officials disheartened by Pittsburgh mayor’s dismissal of petrochemical development. The petrochemical industry might not be welcome in Pittsburgh, but Beaver County is open for business. County officials were outraged after Pittsburgh Mayor Bill Peduto publicly opposed the expansion of western Pennsylvania’s petrochemical industry during the Climate Action Summit in downtown Pittsburgh. “Mayor Peduto may represent the city of Pittsburgh, but he does not represent the remainder of this region,” Commissioner Chairman Daniel Camp said in a statement, noting he was surprised and very disheartened by the comments. “Let me be clear when I say: Beaver County is open for business and will continue to encourage and welcome the responsible production of energy in our region, which is vital to our workforce. While the Mayor is fighting against the hardworking people in our union halls and in our building trades, I want them to know that they will always have a friend in Beaver County.”
Frac Sand Sales in Trouble. Shale slump: Lower hydraulic fracturing activity stings frac sand business. The ongoing shale slump is hitting sand miners and haulers that are facing lower demand, intense pricing pressures and competition from oil companies building their own mines to provide the crucial ingredient for hydraulic fracturing. The Katy frac sand company U.S. Silica said Tuesday that it lost $23 million in the third quarter compared to a $6.3 million profit during the same period a year early. Revenue fell 14 percent to $362 million from $423 million in third quarter of 2018. U.S. Silica is the latest company that supplies goods and services to oil and gas producers to report the ill effects of the shale slump, the result of lackluster prices, poor returns and increasing reluctance of lenders and investors to provide the capital that producers need to add new wells.
PA Permits October 24, to October 31, 2019
County Township E&P Companies
- Beaver New Sewickley PennEnergy
- Bradford Stevens SWN
- Bradford Wyalusing Chesapeake
- Bradford Wyalusing Chesapeake
- Bradford Wyalusing Chesapeake
- Bradford Wyalusing Chesapeake
- Bradford Wyalusing Chesapeake
- Lycoming Cascade ARD
- Lycoming McIntyre Rockdale
OH Permits October 26, 2019
County Township E&P Companies
- Belmont Colerain Ascent
- Belmont Colerain Ascent
- Monroe Adams Eclipse Resources
- Monroe Adams Eclipse Resources
- Monroe Adams Eclipse Resources