Shale Directories Conferences
November 10, 2022
Hilton Garden Inn, Southpointe
Canonsburg, PA (near Pittsburgh)
Latest facts and rumors from the Marcellus, Utica, and Permian, Eagle Ford Plays
Dems Promise Manchin MVP Will Be Approved. (NY Times) Senator Joe Manchin III of West Virginia has secured a promise from Democratic leaders and the White House to complete a highly contested 304-mile gas pipeline in his state, his office said, a major concession won as part of negotiations over a climate and tax bill.
Mr. Manchin, who clinched a surprise agreement last week among Democrats to pass landmark climate legislation, made easing permits for energy projects a requirement of the deal. On Monday, his office made public details of the side agreement he struck with Senator Chuck Schumer of New York, the Democratic majority leader, House Speaker Nancy Pelosi and President Biden.
It would ensure that federal agencies “take all necessary actions to permit the construction and operation” of the gas line, known as the Mountain Valley Pipeline. The project — which has been opposed for years by environmentalists, civil rights activists and many Democratic state lawmakers in Virginia — would carry natural gas from the Marcellus shale fields in West Virginia across nearly 1,000 streams and wetlands before ending in Virginia.
The pipeline was originally supposed to be completed by 2018 but environmental groups have successfully challenged a series of federal permits for the project in the United States Court of Appeals for the Fourth District in Richmond, Va.
The court has overturned permits issued by the Fish and Wildlife Service, the Bureau of Land Management and the Forest Service, saying that their analyses about adverse impacts on wildlife, sedimentation and erosion were flawed.
The delays have been so extensive that the project’s certification from the Federal Energy Regulatory Commission will expire in October. The developers are seeking an extension for a second time.
Jared Margolis, a senior attorney for the Center for Biological Diversity, one of the groups fighting the pipeline, acknowledged that Congress does have the ability to override the courts and move the project forward. But, he said, “That’s not going to prevent a challenge” from opponents.
The side deal cut by Mr. Manchin and Democratic leaders would give the United States Court of Appeals for the District of Columbia Circuit jurisdiction over all future legal challenges, taking the case away from the Fourth District, where environmentalists had found success.
Let’s hope Manchin gets this!
Will Manchin’s Climate Change Bill Pass? Let’s get real’: GOP doubts permitting deal will pass. E&E News. As Democrats gin up support for their big climate bill, Republicans are bracing for a fight, even if that means opposing policies the GOP has supported for years. Senate Energy and Natural Resources Chair Joe Manchin (D-W.Va.) revealed a list of permitting reforms under consideration, including limiting judicial review for certain projects and modifying Clean Water Act approvals. Manchin also said he extracted a promise from President Joe Biden and Democratic leaders to favor permitting of the contentious Mountain Valley natural gas pipeline. It’s something Republicans also want done. But GOP lawmakers are not committing to support the permitting package, which they see as too tied to the Democrats’ budget reconciliation climate, tax and health care bill. Capito yesterday called on Manchin to release legislative text for permitting reform. “Where is the trust factor here?” asked Capito. “Where is the commitment to the working men and women of this country who have great opportunities, great jobs?”
Methane Tax Could Be a Problem. Methane-tax compromise backed by democrats faces industry skepticism. Wall Street Journal. Plans by Senate Democrats to cushion the blow of a proposed methane-emissions tax with exemptions and subsidies are proving to be a hard sell to oil-and-gas producers. Under the bill, companies that produce, transport or store large quantities of oil and natural gas would be subject to a tax based on the volume of methane they release into the air above a set threshold, starting at $900 a ton in 2024. Plans by Senate Democrats to cushion the blow of a proposed methane-emissions tax with exemptions and subsidies are proving to be a hard sell to oil-and-gas producers. Under the bill, companies that produce, transport or store large quantities of oil and natural gas would be subject to a tax based on the volume of methane they release into the air above a set threshold, starting at $900 a ton in 2024.
Some ‘Net Positives” in Climate Change Bill. Oil companies see ‘net positive’ in climate bill. E&E News. Oil and gas executives are finding a lot to like in the Senate climate and energy bill, though they are still opposed to some provisions. The “Inflation Reduction Act,” negotiated by Democratic Sens. Chuck Schumer of New York and Joe Manchin of West Virginia, is aimed at cutting U.S. greenhouse gas emissions by promoting cleaner forms of energy. At Manchin’s urging, though, it would require the government to offer oil and gas leases on federal land and in the Gulf of Mexico, albeit at a higher royalty rate. It also provides tax incentives for projects that capture carbon dioxide and new forms of energy like hydrogen. The downside for the oil industry is a required minimum tax rate and a new fee on emissions of methane, a potent climate-warming gas that’s a major source of pollution in the oilfield.
Chesapeake’s Focus Will Strictly NatGas. Shale patch pioneer Chesapeake to ditch oil in favor of natural gas. Financial Times. The company most associated with the dramatic ups and downs of the US shale patch is taking another gamble, planning to offload prize oil assets and double down on American natural gas. Chesapeake Energy, a pioneer of the shale revolution that went bankrupt during the coronavirus pandemic crash, said on Tuesday it planned to exit oil altogether and return to its roots as a natural gas producer, instead pinning its future on a wave of demand for US exports of the commodity. The company — which grew from obscurity in the late 1980s to become the best-known player in the fracking revolution that made America the world’s biggest producer of oil and natural gas — said it would offload oil producing assets in south Texas’s Eagle Ford basin, allowing it to focus solely on gas production from Louisiana’s Haynesville basin and the Marcellus in Appalachia.
CAPEX Boosts from Devon and Diamondback. Devon, Diamondback raise Permian oil, gas production guidance, boost capex. S&P Global. US Permian Basin producers Devon Energy and Diamondback Energy both raised production guidance and capital budgets for 2022, owing to stellar well performance and inflationary pressures, their top executives said Aug. 2. Devon is raising its full-year 2022 production forecast by 3% to a range of 600,000-610,000 b/d of oil equivalent, owing to better-than-expected well results so far this year and impacts from a bolt-in purchase in North Dakota’s Williston Basin. Earlier in the year, its 2022 production forecast was targeted at 585,000 boe/d. The updated capital budget stems from $100 million related to both ongoing inflation and the company Williston acquisition of RimRock Oil and Gas assets for $865 million in cash, which closed in July, Devon CEO Rick Muncrief said in webcast remarks during his company’s second-quarter earnings conference call.
Shale Companies Prepare for Best Quarter Ever! U.S. shale producers keep eyes on returns, even as inflation bites. Reuters. Top U.S. shale oil producers say they remain laser focused on shareholder returns, limiting production expenditures largely to offset higher costs for equipment, supplies and services. The decision likely will hold down oil output increases while benefiting shareholders receiving higher payouts through dividends and share repurchases with U.S. crude prices above $95 per barrel. Devon Energy (DVN.N) this week raised its capital spending budget about 6% to between $2.2 billion to $2.24 billion, in part due to inflationary pressures. Midland, Texas-based Diamondback Energy reiterated its focus on returning free cash flow to shareholders, and said it had boosted its stock repurchase authorization to $4 billion, from $2 billion. The shale producer said well costs have climbed about 15% year-over-year, with hydraulic fracturing and drilling costs up about 10%.
Shale companies prepare for their best quarter ever. Oil Price. Combined free cash flow at the top 28 independent U.S. oil producers is set to exceed $25 billion for the second quarter, estimates compiled by Bloomberg showed at the start of the shale earnings season. Free cash flow is set to be over $100 billion for the full-year 2022, more than double the FCF the shale patch generated last year. This year’s projected FCF will also be nine times higher than the combined annual cash flows between 2018 and 2020, per Bloomberg Intelligence data. “Even if the cost structure is trending higher, the amount of free cash flow generated will be phenomenal,” Paul Cheng, a New York-based analyst at Scotiabank, told Bloomberg. Production in the U.S. shale patch is also growing, but at a slower pace than in the 2018-2019 run-up to the pandemic. That’s due not only to spending discipline where firms prefer to trim debt and repay shareholders instead of growing production at all costs, as they did for nearly a decade before COVID created a new crisis and a new reality.
MVP Completed in 2023. Equitrans to complete U.S. Mountain Valley pipeline in 2023, shares soar. Reuters. U.S. energy company Equitrans Midstream Corp (ETRN.N) still expects to complete the $6.6 billion Mountain Valley natural gas pipeline from West Virginia to Virginia in the second half of 2023, the company said on Tuesday. That follows news on Monday that Democratic U.S. Senator Joe Manchin secured a commitment from President Joe Biden, Senate Majority Leader Chuck Schumer and House of Representatives Speaker Nancy Pelosi to allow the long-delayed Mountain Valley to be completed. Manchin’s deal and the announcement boosted Equitrans shares over 10% to a three-month high of $8.72 on Tuesday. Mountain Valley – the only big gas pipe under construction in Appalachia – is one of several U.S. pipeline projects delayed by regulatory and legal fights with environmental and local groups.
EPA’s Pollution Helicopters Are in the Permian. EPA resumes pollution helicopter tracking in Permian Basin. E&E News. In a sign of intensified regulatory scrutiny of the United States’ largest oil-producing region, EPA has launched a new round of helicopter flyovers in the Permian Basin in search of big sources of methane and smog-forming compounds. The flyovers will continue until Aug. 15, the agency announced yesterday. Any violations uncovered will be met with “significant penalties,” along with steps to prevent future infractions and follow-up monitoring to make sure that any emission fixes are working, according to a news release. The basin, which spans some 75,000 square miles in West Texas and southeastern New Mexico “accounts for 40% of our nation’s oil supply and has produced large quantities of dangerous [volatile organic compounds] and methane over the years, contributing to climate change and poor air quality,” Earthea Nance, head of EPA’s Dallas-based regional office, said in the release.
ExxonMobil’s Deal Boosts Brownsville LNG Project. ExxonMobil deal boosts Brownsville liquified natural gas project. Texas Standard. NextDecade Corporation, a Houston-based energy company, is in the process of building a liquified natural gas facility in Brownsville called Rio Grande LNG. The plant would take in natural gas piped primarily from West Texas, then liquify it so the gas can be exported overseas. The project has been in the works for years, but uncertainty in the natural gas market has slowed its progress. There’s also a coalition of people from the area – including environmental groups, shrimpers and fishers, and human rights activists – who oppose the project. But late last week, the facility took a big step forward when ExxonMobil agreed to buy 1 million tons of liquified natural gas per year for the next 20 years. Sergio Chapa, a reporter for Bloomberg, spoke to Texas Standard about what the deal means for the project’s future.
Freeport LNG Facility Set to Restart. Natural gas surges with US LNG export terminal set for fast restart. Bloomberg. US natural gas prices surged after a key export terminal in Texas reached an agreement with regulators to restart as soon as October after an explosion. Freeport LNG, which was shut down in June after a blast, has entered into an agreement with the Pipeline and Hazardous Materials Safety Administration to resume operations in early October at almost full capacity, the operator said in an emailed statement Wednesday. That would boost demand for natural gas by nearly 2 billion cubic feet a day, equivalent to roughly 2% of domestic output.
PA LNG to Germany. Energy isn’t sexy until the lights go out, and it looks like Germany is in for a late-autumn un-robing. A bit nippy. Can Pennsylvania help keep at least a couple Germany’s lights on and plants running? Why does it matter?Yes, Pennsylvania can contribute to a country that imports about 95% of the nearly 100 billion cubic meters of natural gas it consumes annually? How? Liquified natural gas (LNG).When the gas is cooled to about -260 F, liquefying it. This decreases the volume by 600 times and allows for more to be transported. We are already extracting nearly 8 trillion cubic feet of natural gas from beneath our feet per year. Only Texas exceeds that total, with over 9 trillion cubic feet.
Even with our own consumption, we can make a noticeable in Germany’s gap caused by Russian oil and gas embargoes.
Aside from some logistical challenges, our primary competition in this market: United Arab Emirates. The challenge here is competing with Middle Eastern gas producers, because the gas produced at “virtually no cost as a byproduct of petroleum production.” Advantage: cultural ties dating back to the first Germans arriving at Jamestown in 1608. For Pennsylvania specifically, the ties began in 1683, when Franz Pastorius and others settled what is now known as Germantown near Philadelphia.
Why does culture and history matter here? As in most cases, people generally tend to trust and be more comfortable doing business with those with those with which we have some cultural connection. When that connection dates back hundreds of years, the bond is strong. A nation like UAE, which is 50 years old, will be hard-pressed to compete with that long an established relationship.
Here are some important numbers.
Europe was already expecting to import 86 million tons of LNG annually by 2050, that number will increase with the embargos against Russia.
Pennsylvania natural gas production stems from two sources: Utica and Marcellus Shale deposits. From 2026 and 2030, Marcellus and Utica Shale LNG production should reach about 1.2 million cubic meters daily. These rich reserves span across about two-thirds of our Commonwealth. Pennsylvania, a 2017 industry report maintains, has a “major competitive advantage is access to an expanding supply of low-cost natural gas.”
As with many western nations, Germany has been charging towards renewable energy sources for a few decades now, with Russian natural gas as a bridge fuel in the that transition. The country was also using nuclear fuel to meet need until biofuels, wind, and solar were more developed. However, the Merkel administration pushed through a nuclear plant ban in the wake of the March 2011 Fukushima nuclear disaster. The last German plant went offline this year. By July 2011, the Pennsylvania “Governors’ Marcellus Shale Advisory Commission” issued a report. The stars of transatlantic energy trade did not align here though. Instead, the PA report argued that conditions made it unlikely Pennsylvania would enter the global LNG market.
Concerns remain, however, not the least being why America should send its natural gas halfway around the world. Well, there is profit. But Germany has banned fracking not only because of watershed issues, but also “because of the high risk of earthquakes,” according to Norbert Brackmann, the German government’s coordinator for the maritime industry.
Can seeing things through green-tinted lenses not see natural gas a fuel bridging us towards biofuels and renewables? Or, are the graver concerns at play? Indeed, just this month there were additional reports out of New Mexico and West Texas claiming that earthquakes were caused by drillers, though the causes of these incidents are debated.
Then there is the argument that shipping LNG across the Atlantic dirties more air than it is worth. Recent data tells us that shipping is not as “dirty” as one might think, at least comparatively. According to 2018 data, shipping only contributes about 3% of CO2 emissions globally. Although shipping and its residual greenhouse gas emissions are growing faster than other modes of transportation, it appears to be far less damaging than others.
Though just a sliver of the global energy industry picture, this German-American relationship is one that we need to bear in mind.
Women Are Excelling in O&G. Women are continuing to change the shape of the petroleum and natural gas (PNG) workforce, and their interest in the industry has been embraced by companies like Coterra. Women make up 20 percent of the work force, a number that has grown steadily over the last decade.
The 2021-22 school year was the first during which the number of female students eclipsed males at the Lackawanna College School of Petroleum and Natural Gas in Tunkhannock, Pennsylvania. Program director Sue Gumble is a graduate of the school who has been an inspiration to the female students who have followed in her footsteps. Two women that we had the honor of interviewing agree that it has been a rewarding career for them so far, and they encourage other women to look into the opportunities PNG provides.
“I liked the idea of working hands-on, and I knew that I could make a stable income and work my way up through the ranks with more years of experience,” said Crystal Bingham, who graduated in 2020. She initially interned with Coterra (then Cabot) before accepting an entry-level position at Williams Companies as a compression technician.
“I love my job,” she stated. “Every day, I’m faced with problem solving, and I feel accomplished knowing that I have completed a task.” Julie Lewis entered the industry a few years earlier, graduating from the School in 2016 and working as a business analyst for Leatherstocking Gas Company, where she also did her internship.
“This job has also allowed me to use my past skills,” Julie related. When she finished raising her children, she wanted a full-time job and ruled out some other options before deciding that the PNG industry was the right place for her. “I enjoy the freedom and trust to work independently and being valued for my skills.”
Being a woman obviously did not prevent Julie or Crystal from entering a predominantly male workforce, but they have advice for other women looking to make advances in the industry.
“If you are a woman trying to get hired in an operations or field position, be prepared to answer questions like ‘Have you ever fixed something’” said Julie. “If you want to work in the field, dress for your interview in clean, field-like attire. It’ll be easier for the interviewer to picture you there.”
Crystal insists, if the interest and desire are sincere, there’s no need to hesitate. “Anyone can be a gas technician,” she said of her job. “If you put in the work, you will succeed and be rewarded.”
Fracking in NY. Republican lawmaker aims to force Dem states to allow fracking: ‘Threatening America’s energy independence’. Fox Business. Rep. Claudia Tenney, R-N.Y., unveiled a bill Wednesday seeking to force states to allow hydraulic fracturing by tying federal funds to the method of fossil fuel extraction. States with statewide bans on fracking would be barred from receiving any funds from the Energy Efficiency and Conservation Block Grant (EECBG) program under Tenney’s legislation which was first obtained by FOX Business. The bill, which is set to be formally introduced Friday, is intended to target Tenney’s home state of New York which first banned fracking in 2014 and codified the ban in 2020.
Tap the Oil Patch Get to Methane Emissions Reduction? Methane emissions reduction at the oil patch: how to get there. Forbes. Opinion. It would also completely eliminate venting of associated gas from oil wells, requiring the gas to instead be brought to market. While flaring would not be banned, there would be requirements for consistent monitoring and repairs. The new rules could reduce methane emissions from the hydrocarbon industry by as much as 75%, compared with 2005 emissions. In practical terms, it could mean a reduction of 41 million tons of methane emissions by 2035. “They will be very effective,” said Victor Flatt, a co-director of the Environment, Energy, and Natural Resources Center at the University of Houston Law Center, explaining that the approach is similar to that adopted to control hazardous air emissions and fugitive emissions. “This is all traditional regulation, using a state plan with some federal monitoring and oversight.”
APA Corp Buying in West TX. APA Corp buying West Texas oil producing land for $700 million -sources. AP News. U.S. oil producer APA Corp agreed to pay about $700 million for West Texas properties owned by closely held Titus Oil & Gas LLC, three people familiar with the matter told Reuters. The deal could be announced as soon as Wednesday, the people said, adding the purchase would mark a significant pivot to West Texas for the former Apache Corp after a failed bet on a remote corner of the top U.S. shale basin. Titus Oil & Gas, backed by private equity firm NGP Energy Capital Management, is among the private oil and gas companies investors have put on the market in recent months hoping higher energy prices would secure bumper valuations.
Energy Transfer 2nd Qtr. Results. Energy Transfer says transportation volumes up in Q2, capacity expanding. Reuters. Energy Transfer LP’s oil and gas liquids volumes increased in the three months ended on June 30 as the company ramps up processing and transportation system capacity, executives of the pipeline and terminal operator said on its second-quarter earnings call on Wednesday. Compared to the year-ago quarter, Energy Transfer’s volumes of transported crude oil grew to 4.3 million barrels per day from 4 million, while natural gas liquids volumes rose to 1.9 million barrels per day from 1.7 million, and refined products were up to 526,000 barrels per day from 510,000, the company said. Demand from Europe and Asia has helped fuel the growth, and demand should remain strong across its segments through the end of 2022, Energy Transfer Chief Executive Officer Thomas Long said.
PA Permit July 25, to August 4, 2022
County Township E&P Companies
1. Susquehanna Auburn Chesapeake
2. Westmoreland Penn Olympus
OH Permits July 18 to July 29, 2022
County Township E&P Companies
1. Belmont Richland Ascent
2. Belmont Wheeling Ascent
3. Belmont Wheeling Ascent
4. Belmont Wheeling Ascent
5. Belmont Wheeling Ascent
6. Carroll Orange EAP OHIO
7. Carroll Orange EAP OHIO
8. Carroll Orange EAP OHIO
9. Carroll Orange EAP OHIO
10. Carroll Orange EAP OHIO
11. Columbiana Elkrun Hilcorp
12. Guernsey Londonderry Ascent
13. Guernsey Londonderry Ascent
14. Guernsey Wills Utica Resources
15. Guernsey Wills Utica Resources
16. Guernsey Wills Utica Resources
17. Guernsey Wills Utica Resources
18. Jefferson Salem EAP OHIO
19. Jefferson Salem EAP OHIO
20. Jefferson Warren Gulfport
21. Jefferson Warren Gulfport
22. Jefferson Wells Ascent
23. Jefferson Wells Ascent
24. Monroe Adams SWN
25. Monroe Adams SWN
26. Noble Brookfield EOG Resources
WV Permits July 25, to July 29, 2022
1. Marshall Tug Hill
2. Marshall Tug Hill
3. Marshall Tug Hill
4. Monongalia Northeast Nat. Res.
5. Tyler Antero
6. Tyler Antero
7. Tyler Antero
8. Tyler Antero
9. Tyler Antero
10. Tyler Antero
11. Tyler Antero
12. Wetzel EQT
Joe Barone 610.764.1232