Shale Directories Conferences
8th Annual Utica Midstream
March 19, 2020
North Canton, OH
8th Annual Upstream PA 2020
April 16, 2020
State College, PA
4th Annual Appalachian Storage Hub Conference
June 4, 2020
Hilton Garden Inn
Southpointe, Canonsburg, PA
8th Annual Utica Downstream
October 15, 2020
North Canton, OH
8th Annual Midstream PA 2020
November 12, 2020
State College, PA
2nd Annual Appalachian Basin Real Estate Conference
December 10, 2020
Latest facts and a rumor from the Marcellus, Utica, and Permian, Eagle Ford Plays
NatGas to Produce 40% of U.S. Electricity in 2020. Since 2008, the shale revolution has boomed U.S. natural gas production 60 percent to 95 Bcf/d. Long high and volatile, gas prices have become low and stable in the “shale-era.” Further, gas emits some 50 percent less CO2 than coal and has very few local pollutants to clear hazy city skies. In fact, IEA credits shale gas for the U.S. cutting emissions faster than any other country. Thus, there has been a great rise in U.S. gas power capacity and generation. Gas is extending toward being 50 percent of capacity and will generate almost 40 percent of U.S. electricity in 2020, or double its share from a decade ago. Natural gas is also the favored backup source for intermittent renewables, for those frequent times when the “wind isn’t blowing” and the “sun isn’t shining.” The reality is that these sources have capacity factors in the 30 percent range even on good days, so turning to gas as a clean and reliable fill-in often becomes the norm.
DOE Grant to Power PSU Researches on NatGas Storage for Vehicles. The United States possesses large reserves of natural gas, like Pennsylvania’s Marcellus Shale, but the fuel powers few of the country’s vehicles, due partly to storage limitations. Penn State researchers seek to overcome that hurdle by creating a less expensive and more efficient natural gas storage system with funding from the U.S. Department of Energy. T.C. Mike Chung, professor of materials science and engineering in the College of Earth and Mineral Sciences, received a three-year, $1.12 million grant to develop super-absorbent materials designed to store natural gas under less extreme pressures and temperatures than those required today. The technology could lead to smaller and less-expensive onboard tanks for natural gas vehicles, and may make the fuel economical for tractor-trailers, and with further advances, cars and SUVs, Chung said.
Cabot 4th Qtr. Update. Cabot Oil & Gas Corp. said this morning it will deliver an average net production rate for 2020 of roughly 2.4 billion cubic feet (Bcf) per day for the year from a capital program of $575 million, Kallanish Energy reports.
Given the continued weakness in natural gas prices throughout the winter heating season and the corresponding degradation in the NYMEX futures curve for 2020, Cabot is sticking with its previously disclosed maintenance capital plan as the company’s official budget for 2020.
This plan assumes a moderate amount of curtailments throughout the year based on an expectation of normal pipeline maintenance, higher line pressures, and weaker spot market prices.
At a $2.25 average NYMEX price, this program is expected to deliver between $275 and $300 million of free cash flow and generate a return on capital employed between 11% and 12%, according to Cabot.
“Our decision to reduce capital spending by approximately 27% year-over-year highlights our continued commitment to disciplined capital allocation,” said Cabot chairman, president and CEO Dan O. Dinges.
“We believe that by substantially reducing our drilling and completion activity in 2020, we are taking the necessary steps to adapt to the current uncertainty in the natural gas markets and we are prepared to maintain these reduced activity levels as long as this lower price environment persists.”
“Overall, we view the update as positive, as there was a slight production beat on lower spending,” said Gabriele Sorbara, an energy analyst with Siebert Williams Shank, in a research note.
Despite rock bottom gas prices, Dinges said Cabot still expects to generate positive free cash flow, cover dividend commitments, deliver corporate returns that exceed cost of capital, and maintain a strong balance sheet.
Dinges said the company is “encouraged” by the reduction in horizontal rig counts across the Marcellus, Utica and Haynesville Shale plays — which are collectively down 39% since their recent peaks in the second quarter of 2019.
“(We) are hopeful that market forces will continue to move natural gas supply and demand toward a more sustainable balance,” Dinges said.
Cabot expects production for 2019’s fourth quarter to be roughly 2.46 billion cubic feet-equivalent per day (Bcfe/d), exceeding the high-end of the company’s guidance range for the quarter.
Fourth-quarter/full-year results will be released Feb. 21.
Montage Resources 4th Qtr. Update. Montage Resources is cutting its capital spending in the Appalachian Basin by 44% in 2020, Kallanish Energy reports.
The company said it expects to spend between $190 million and $210 million on capital spending, compared to $357.5 million in the midpoint of the company’s 2019 capital spending guidance.
The independent producer is projecting 2020 estimated average net daily production of 570 to 590 million cubic feet-equivalent per day (MMcfe/d), an increase of about 6% at the midpoint when compared to the midpoint of the company’s 2019 production guidance of 548.5 MMcfe/d.
The company will be drilling in the Marcellus and Utica shales in Ohio’s Monroe County. Montage intends to drill two thirds of its wells in the liquids-rich Marcellus Shale in eastern Ohio, and the remaining wells in the Utica Shale dry gas window in that region. About 80% of its production is natural gas.
It expects to drill 17 to 20 new wells in 2020, to complete 18 to 22 wells and to turn to sales 21 to 24 wells.
Montage Resources said roughly 56% of its 2020 natural gas production is hedged at a weighted average floor price of $2.64 per million British thermal units (MmBtu), and oil production is about 52% hedged at a weighted average floor price of $57.13 per barrel.
The company was renamed after the merger of Eclipse Resources and Blue Ridge Mountain Resources a year ago. It is involved in the Appalachian Basin in Pennsylvania. West Virginia and Ohio, in the Marcellus and Utica shales. The company has offices in State College, Pennsylvania, and Irving, Texas.
BJ Services, Evolution Hope to Replace Diesel-powered Fracking with NatGas. Two Houston-area companies are working to make an industry known to be notoriously unfriendly to the environment more responsible and profitable. In recent weeks, The Woodlands-based Evolution Well Services and Tomball’s BJ Services have taken steps to replace diesel-powered generators used by hydraulic fracturing fleets with those powered by natural gas. In late January, Evolution announced a two-year deal to provide natural-gas powered electric hydraulic fracturing services to a customer in the Marcellus Shale of Pennsylvania later this year. And last week, BJ Services said it’s testing a turbine that uses natural gas from a drilling site to provide power to hydraulic fracturing crews. Touted as replacements for noisy and polluting diesel-powered hydraulic fracturing pumps, the two company’s products have the same goal — lower greenhouse gas emissions, lower maintenance costs, lower fuel costs, fewer workers needed at a well site and less noise.
TX Railroad Commission Launches Interactive Maps. The Railroad Commission of Texas has launched two more interactive data maps showing oil and gas drilling permit approvals and the number of wells spudded, which is when operators begin drilling a well. Information is displayed by counts, operators, county locations and on a statewide level. The data is available 24-hours a day, seven days a week beginning with Calendar Year 2018. “With this latest interactive data on the Commission’s drilling permit approvals and wells spudded, our agency is providing more detailed insight into Texas’ energy industry,” said Wei Wang, RRC’s executive director. “This helps enhance our regulatory transparency and continues educating the public about one of the state’s top economic drivers.”
Rising Demand for U.S. Oilfield Chemicals. U.S. demand for oilfield chemicals will total $14.4 billion in 2023, driven by rising drilling activity and increased well lengths, consulting firm Freedonia Group forecasts.
These trends are leading to greater consumption of chemicals per well, causing the projected demand growth for oilfield chemicals to outpace drilling and production activity, Kallanish Energy reports.
According to Freedonia Group:
The prevalence of unconventional drilling will buoy chemical demand
Increasing environmental concern and pressure from regulators will shape the product mix in favor of higher-value, more environmentally-friendly alternatives.
The drilling of unconventional plays is expected to continue to dominate drilling activity through 2023, and the higher costs and greater level of complexity associated with unconventional oil and gas wells will require higher performance oilfield chemicals, further driving value demand growth.
“However, growth will not be as rapid as during the 2008-2018 period due in part to oil and gas prices remaining below peaks reached earlier in the decade,” Freedonia Group stated.
Uncertainty surrounding oil prices could also discourage the drilling of more complex wells, which typically utilize larger volumes of oilfield chemicals, according to Freedonia Group.
While recently proposed fracking bans by Democratic Presidential candidates are unlikely to affect near-term prospects, a number of regulations have been introduced that seek to limit the potentially harmful environmental impact of the oil and gas industry.
These regulations ranging from curbing the use of environmentally harmful chemicals, to guidelines regarding water management issues, and the appropriate disposal of hazardous wastes.
“These concerns will continue to drive development and use of higher value products as the industry attempts to forestall formal regulation by embracing more environmentally friendly alternatives, including biodegradable shale inhibitors and less toxic biocides,” Freedonia forecasts.
“This will in turn boost oilfield chemical demand due to the higher price of these chemicals compared to the products they are replacing.”
PA Lawmakers Approve Tax Credit Program to Entice Petrochemical Plants. Pennsylvania lawmakers have approved a multi-million-dollar tax credit designed to entice petrochemical plants to northeastern Pennsylvania, Kallanish Energy learns.
The legislation is expected to receive a Gov. Tom Wolf veto, and could potentially produce a legislative override, government watchers say.
The Republican-controlled state Senate voted 39-11 Tuesday on the measure, sponsored by Rep. Aaron Kaufer, Republican-Luzerne County, that offers millions of dollars in tax credits to businesses that use Pennsylvania natural gas to produce petrochemicals.
The Republican-controlled House passed it later Tuesday, 157-35, before sending it to Wolf, a Democrat. The measure received broad bipartisan support in both the House and the Senate, the Pennsylvania Capital-Star reported.
A spokesman for Wolf confirmed to the Capital-Star he would veto the bill, which faces strong opposition from environmentalists. But the General Assembly can override gubernatorial vetoes with two-thirds majority votes in the House and Senate.
The bill initially called for businesses to spend $1 billion and create 1,000 jobs to qualify for the tax credits. But an amendment the Senate approved Monday lowered the required capital investment to $450 million and the job creation requirement to 800.
The change also requires tax credit receivers to pay workers the prevailing wage and to make “a good faith effort” to hire local companies for project construction.
The Pennsylvania Department of Revenue reports the amended tax credit program will cost roughly $22 million per plant, per year. Its estimated cost for the original bill was $1 billion over 10 years.
The incentive mirrors a tax credit that helped Royal Dutch Shell to choose a site in Beaver County to build a world-scale ethane cracker plant, the first cracker built outside the Gulf Coast in the U.S. in decades.
One key difference is the Beaver County project has enjoyed vocal support from Wolf, even though Shell’s final investment decision on the project was made under Wolf’s Republican predecessor. Wolf has touted the roughly $6 billion project as an economic boon to southwest Pennsylvania.
BP Focuses on U.S. Shale Production. British oil supermajor BP more than doubled its U.S. shale oil output in 2019, with its Lower 48 U.S. states unit, BPX Energy, producing on average 124,000 barrels per day (Bpd), Kallanish Energy reports.
The figures compare to 55,000 Bpd production in 2018, and follows the $10.5 billion acquisition of BHP’s assets later that year. Natural gas production rose 27.56%, to 2.17 billion cubic feet (Bcf), from 1.70 Bcf a year earlier.
BPX’s results were disclosed Tuesday, along with BP’s fourth-quarter earnings.
According to BP’s chief financial officer, Brian Gilvary, the company has completed the sale of its gas assets – “apart from one small package” – to focus on the oil business. The executive noted a 40% drop in gas rig counts overall in the U.S., driven by declining gas prices.
Despite the growth in production, BPX faced a 47% drop in its natural gas prices during the fourth quarter, to average $1.64 per thousand cubic feet (Mcf) and a 20.57% year-on-year fall, to $1.93/Mcf in 2019.
Liquids prices averaged $35.52 a barrel last quarter, dropping 2.71% y-o-y. However, prices increased 2.5% to average $36.85/Bbl in 2019.
With a capex of $1.93 billion (69.1% more than in 2018) and production costs of $7.59/Bbl, BPX operated an average of 13 rigs last year vs 9 rigs in 2018.
Gilvary also said there is only one rig operating at its Haynesville asset “at the moment,” which will have a negative impact on BP’s overall production this year.
Big Oil Still Betting on the Permian. The Lower 48, and in particular the Permian Basin, will continue to draw growing investments from ExxonMobil Corp., Chevron Corp. and BP plc as they work to improve global natural gas and oil supply, the management teams said during fourth quarter conference calls. Earnings fell for the supermajors in the final quarter of the year, but output from the U.S. onshore continued to strengthen. The company has no control over the “short-term price environment,” but it does have control over the fundamentals, ExxonMobil CEO Darren Woods said during the quarterly conference call.
Braskem News Affecting Parkersburg, WV. Braskem announced the appointment of Roberto Simões, as the next CEO effective 1 January 2020. Usually this the point where the old dirty laundry is washed and new deals are quickly announced. I expect that with the Ascend WV property as one of the key hanging issues. It also addresses the Brazilian fines.
PTTGC Addressing Environmental Issues. The companies contemplating construction of an ethane cracker plant in Belmont County say they are committed to doing all they can to address the threats of climate change and the proliferation of single-use plastics.
Dan Williamson, Columbus-based spokesman for PTT Global Chemical and Daelim Industrial Co. LLC, said the companies fully understand these threats to the environment, and are committed to doing their part to help mitigate them. He added that the firms, based in Thailand and South Korea, respectively, are known for calling attention to, and addressing, these issues in their home countries.
“Should we reach a final investment decision on this project (at Dilles Bottom), we will be every bit as active and outspoken on these issues in the United States as in Asia,” Williamson said.
Williamson said the companies have remained rather quiet on environmental issues in the U.S. and the local region thus far, because they have not yet reached a decision on whether to proceed with the Belmont County project. As the discussion has intensified locally, however, with concerned residents staging protests against the project and meeting with state officials to voice their concerns, PTTDLM decided it was time to become more involved in the conversation.
To that end, Williamson outlined the ways that PTTDLM will demonstrate a commitment to protecting the environment if it moves forward with construction of the Belmont County cracker plant, taking steps beyond “what is legally required.” These include:
* Assessing all products under research and development with eco-design criteria, such as requiring less feedstock, contributing to greenhouse gas emission reduction, using renewable instead of fossil-based material, and being more easily degradable;
* Use of clean fuels to lower sulfur dioxide emissions, ignition of gas-turbine power generators to lower the emission of oxides of nitrogen, and installation of continuous emission monitoring systems;
* Refining production processes to minimize pollutant emissions and to optimize use of resources throughout the supply chain;
* Selling the byproduct of carbon dioxide to producers of sodium carbonate in order to reduce greenhouse gas emissions while also conforming to circular economy principles by using waste as feedstock;
* Collaborating with stakeholders to optimize the reuse of waste.
* Establishment of community enterprise waste banks, which also serve as a model for waste management for communities and schools, as well as teaching students about the basics of waste sorting.
* Reducing the proportion of nonrenewable resources and increasing the renewable or recycled resources, such as use of plastic fine (particles) from the air treatment system from the polymers plant as raw material in the production process; and
* Initiation of an upcycling plastic waste project to transform plastic waste into useful items, such as clothing and bags, and to train people in surrounding communities to produce materials from recycled plastics.
An ethane cracker plant uses heat and chemical processes to “crack” or break down ethane, one of the abundant “wet gas” components of the local natural gas stream drawn from the Utica and Marcellus shales. The resulting product is ethylene, a component of plastics and other products, such as textiles, paint, household cleaners and more. If the PTTDLM plant is constructed, it will use local natural gas to fuel its six furnaces.
“As time goes on, technology improves,” Williamson said, noting that he would expect PTTDLM to upgrade its facility to reduce emissions resulting from the burning of natural gas as the technology to do so becomes available. “Natural gas facilities, including ours, will seek and find new technology so that the emissions we do produce are even less than they are now.”
Williamson also addressed fears that area residents recently expressed about whether the PTTDLM plant would produce “forever chemicals.” According to the U.S. Environmental Protection Agency, per- and polyfluoroalkyl substances, or PFAS, are a group of man-made chemicals that have been manufactured and used in a variety of industries around the globe since the 1940s. Such chemicals are very persistent in the environment and in the human body – they don’t break down and can accumulate over time. The EPA says there is evidence that exposure to PFAS can lead to adverse human health effects.
“We are aware that PFAS are harmful, and the PTTDLM project will not manufacture or use PFAS in the construction or operation of the plant,” Williamson said. “We will work with our contractors and vendors to use PFAS-free products in its construction and operation.”
Williamson also addressed concerns local residents have expressed regarding potential pollution of the Ohio River.
“The Ohio River is a treasure to the Ohio Valley and to the state of Ohio, and this project will view it as a treasure,” he said, noting that if it is built, the plant will use technology and infrastructure designed to protect and restore the river, local streams and area wetlands. “I think the Ohio River was something that was looked at very closely during the environmental review process. … (Permits) were issued only once it was demonstrated that the water would be protected.”
Williamson commended local residents for their concerns about the environment and the impact that the PTTDLM project or any industrial development might have on it.
“The people who are speaking out are doing so because they care about their community,” he said. “They have lost faith in government and maybe in industry. They don’t know, and they have no reason to know, the character of these companies they are not familiar with.”
Williamson said in Thailand and South Korea, PTT and Daelim “don’t just answer questions when they are pressed,” but they also hold events to address such issues that are important to them.
“They lead the conversation,” he said.
One example of the environmental initiatives begun by GC, PTT’s Thailand-based parent company, is the “ThinkCycle Bank” project, designed to add economic value to wastes by fostering an awareness to sort and reuse waste. GC also has launched a project called “Upcycling the Oceans, Thailand.” It uses plastic waste found in the sea and on the coastlines of Rayong, Thailand, to produce T-shirts and backpacks. Those “Trashion” products feature slogans such as “Trash to Treasure” and “Wear Your Own Waste.” According to GC program information, each shirt or backpack is made by collecting and recycling 14 plastic beverage bottles.
And while Williamson said the companies are committed to such upcycling projects and to reducing production of single-use plastics such as beverage containers and grocery bags, he pointed out that there are still good uses for plastics. He cited the need for sterile medical equipment and supplies as well for automobile components that make vehicles more lightweight and efficient as two examples.
“PTTDLM shares this concern and embraces the responsibility to be part of the solution,” he said. “We are committed to raising awareness and supporting policies to reduce single-use plastics.”
PA Permits January 30, to February 6, 2020
County Township E&P Companies
- Washington Amwell EQT
OH Permits February 1, 2020
County Township E&P Companies
- Belmont Washington Gulfport
- Belmont Washington Gulfport
- Belmont Washington Gulfport
- Harrison Cadiz EAP Ohio
- Harrison Cadiz EAP Ohio
- Harrison Cadiz EAP Ohio