Facts & Rumors # 552
May 11, 2024
Latest facts and rumors from the Marcellus, Utica, and Permian, Eagle Ford Plays
Can the Utica Compete with the Permian? The Utica shale has for years been known as a gas-producing play. But this may be about to change as one company reports promising results from its oil well offensive in the area. EOG has been drilling in the Utica shale for months now, and it just reported that the play can “compete with the best plays in America.” The production figures EOG reported for its wells there support this: over the first 180 days since drilling, a three-well pad dubbed Xavier produced an average of 450,000 barrels of oil equivalent in total. Another pad in the area yielded 350,000 barrels of oil equivalent.
LNG Projects Coming to NE PA and NJ. Thank you, MDN. Last year in March and then again in May, New Fortress Energy (NFE) confirmed to the Securities and Exchange Commission (SEC) that it plans to apply for updated permits to build an LNG export plant in landlocked northeastern Pennsylvania (see New Fortress Confirms Intent to Build Wyalusing LNG Export Plant). In June of last year was the last time we wrote about the Wyalusing (Bradford County), PA, project. We have GREAT news. In a pair of filings last week with the Federal Energy Regulatory Commission (FERC), NFE and its subsidiaries confirmed it still plans to build both the Wyalusing LNG export plant AND the docking facility in New Jersey along the Delaware River to load ships with the PA-produced LNG. NFE plans to truck the LNG from Wyalusing, PA, to Gibbstown, NJ. And that has antis up in arms.
Biden Team Setting Price for SPR. Biden raises price US is willing to pay to refill oil reserves. Bloomberg. The Biden administration raised the price it’s willing to pay to refill the country’s emergency oil reserves, which have dwindled near the lowest in four decades. The Energy Department said in a filing that it will pay as much as $79.99 a barrel for oil, the first time the administration has set an explicit price ceiling. That’s higher than the previous informal cap of previous informal cap of $79 and close to market prices. DOE has also changed the pricing formula, allowing for potential bidders to better hedge positions.
OXY Getting Close to CrownRock Acquisition. Occidental Petroleum says CrownRock deal could close by August. Reuters. Occidental Petroleum, opens new tab hopes to close its acquisition of shale oil producer CrownRock before its second-quarter earnings call, CEO Vicki Hollub said on Wednesday. The event typically falls in early August. Occidental in December proposed to buy Permian producer CrownRock in a $12 billion cash-and-stock deal including debt. It wants to expand its presence in the largest U.S. oilfield as part of a wider consolidation wave among shale producers.
Court Favoring FERC Over Climate Reviews. DC Circuit leans toward FERC in fight over climate reviews. E&E News. A federal appeals court on Tuesday appeared reluctant to require additional review of the climate effects of a gas project in Indiana and Kentucky, in the latest case seeking to broaden how federal energy regulators consider planet-warming emissions. During oral arguments, three Trump-appointed judges of the U.S. Court of Appeals for the District of Columbia Circuit questioned the challenger of the Federal Energy Regulatory Commission’s certificate for the Henderson County gas expansion project. The project — which includes a new 24-mile pipeline — is designed to feed natural gas to a power plant serving as a backup source for renewable energy built near a retired coal plant in southern Indiana.
NatGas Production to Fall in 2nd Qtr. Thanks, MDN. Once a month, the U.S. Energy Information Administration (EIA) analysts issue the agency’s Short-Term Energy Outlook (STEO), their best guess about where energy prices and production will go in the next 12 months. We sometimes poke good-natured fun at the EIA because their predictions go up in one month, and in the next month, they go down, etc. What about the latest STEO dart board, published yesterday? EIA predicts the average spot price for natural gas will be $2.20/MMBtu in 2024, the same prediction as last month. However, the agency raised the average spot price prediction for gas in 2025. Last month, it was $2.90; this month, it’s $3.10. Hey, it’s moving in the right direction!
Williams Cancels NY Pipeline. Pipeline company cancels Northeast gas project. E&E News. An Oklahoma company has discarded plans to build a natural gas pipeline in a pocket of the northeastern U.S., allowing a certificate for the embattled project to expire last week. The Northeast Supply Enhancement project — approved by federal energy regulators in May 2019 — would have expanded Williams Cos.’ existing Transcontinental gas pipeline system in Pennsylvania, New Jersey and New York by about 37 miles.
Lithium in Appalachian Frack Water. Appalachian fracking water contains lots of lithium, report says. WV Public Broadcasting. A new report says the wastewater generated by hydraulic fracturing for oil and natural gas contains something valuable. Fracking in Appalachia produces a lot of polluted water. But also, as it turns out, lithium. That’s what a report from the National Energy Technology Laboratory found. “The drilling boom in Appalachia created large volumes of produced water that is considered a waste,” said Justin Mackey, the project’s lead investigator. “We found that this fluid is significantly enriched with lithium compared to produced water from other shale formations.”
Global Gas Glut Delayed. Global gas glut to be delayed by another year. Bloomberg. A wave of new liquefied natural gas projects that was supposed to flood the global market from next year now looks like it might not eventuate until at least 2026. The main reason is that the buildout of new export plants across the US Gulf Coast is at risk of taking longer than expected. That means the current supply tightness — a hallmark of the market since Russia’s invasion of Ukraine in 2022 — will be around for a bit longer.
Coterra Cuts Back in PA to Drill More Oil. Thanks, MDN. Coterra Energy, formed by the merger of Cabot Oil & Gas (drills for natural gas in the Marcellus) and Cimarex Energy (drills for oil in the Permian and Anadarko basins), issued its first quarter 2024 update on Friday. The company turned in respectable financial numbers, making a profit of $352 million in 1Q24, albeit down 48% from the $677 million it made in 1Q23. The company produced 2.31 Bcf/d (billion cubic feet per day) in the PA Marcellus during 1Q24, up 8% from 2.13 Bcf/d in 1Q23. However, the money it received for its NatGas production dropped like a rock. The average sale price for its gas in 1Q24 was $2.20/Mcf, down 41% from $3.71/Mcf in 1Q23. No wonder the company has pivoted to spend more time and money on oil drilling rather than gas drilling.
PA Permits April 28, to May 9, 2024
County Township E&P Companies
1. Butler Concord Lola Energy
2. Fayette Luzerne EQT
3. Greene Aleppo Rice
4. Greene Aleppo Rice
5. Greene Aleppo Rice
6. Greene Aleppo Rice
7. Sullivan Cherry Chesapeake
OH Permits April 28, to May 4, 2024
County Township E&P Companies
1. Guernsey Richland INR
2. Guernsey Richland INR
3. Harrison Stock EAP OHIO
4. Harrison Stock EAP OHIO
WV Permits April 29, to May 3, 2024
1. Ritchie Antero
2. Wetzel Antero
3. Wetzel Antero
4. Wetzel Antero
5. Wetzel Antero
6. Wetzel Antero
