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Tuesday, June 27, 2017

DOE to Invest $20 Million in New Oil and Gas Research Projects

The U.S. Department of Energy (DOE) today announced the availability of $20 million for cost-shared oil and gas research projects to increase recovery efficiency from unconventional oil and gas wells and to prevent offshore spills and leaks. This new funding opportunity seeks projects that will advance DOE’s objective to support a more environmentally responsible, secure, and resilient U.S. energy infrastructure, while enhancing economic competitiveness and national security.

“This oil and gas research funding opportunity underscores the Department’s commitment to developing all of the nation’s energy resources,” said Acting Assistant Secretary for Fossil Energy Doug Hollett. “Increased efficiency and reliability of preventative and recovery measures promote our energy security, and contribute to making the United States energy dominant.”

Projects under this funding opportunity will support the Office of Fossil Energy’s efforts to ensure environmentally sustainable domestic and global supplies of oil and natural gas. Funded projects will cover three topic areas – two addressing unconventional oil and gas recovery and one focused on offshore oil and gas leak prevention.

Technology validation using field laboratories - $15 million

Advancement in subsurface diagnostics - $3 million

These two topic areas address critical gaps in the understanding of reservoir behavior and optimal completion, stimulation, and recovery strategies for unconventional oil and gas. The aim of these topic areas is to increase and enable more cost-efficient and environmentally sound recovery from shale gas, tight oil, and tight gas reservoirs.

Offshore spill and leak prevention - $2 million

This topic area focuses on offshore oil and gas spill and leak prevention. The aim of this topic is to develop innovative solutions that predict geologic hazards, and prepare for and prevent offshore incidents through risk reduction and mitigation technologies. Learn more about this funding opportunity HERE.

To learn more about the Department’s programs and research within the Office of Fossil Energy, visit their website HERE. Information on additional funding opportunities can be found HERE.

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Chemical Plants Helping to Revive Youngstown Manufacturing Industry

From ValueWalk:
Youngstown seems like the heart of the rust belt, a former steel town with a strong union presence that saw massive job losses after changing economic conditions forced the closure of manufacturing plants in the 1970s. Industry is returning to Youngstown, however–it just looks a little different. Instead of the steel pipes and raw materials the area produced before, manufacturers are instead looking at the area as a perfect location for chemical manufacturing. This, in turn, is boosting hiring in the area. 
Royal Dutch Shell is building a $6 billion cracker plant 40 miles south of Youngstown in Monaca, Pa. In addition, PTT Global, a Thai company, is considering a similar scale project in Belmont County. Plants of this scale will create thousands of construction jobs for a two to three year period, and hire a 600 person staff once completed. 
These figures don’t include the thousands of jobs necessary to bring the various new plants on line. The Shell cracker plant alone is predicted to provide temporary work for more than 6,000 tradesmen and take 18 months to construct. 
“This plant will have serious ramifications for our supply chain companies, especially in plastics and petrochemicals,” says Guy Coviello, vice president of governmental affairs at the Youngstown-Warren Regional Chamber of Commerce.
Click here to read this whole article.

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Permitting Slow in Utica Shale; Rig Count Holds Steady

New permits issued last week: 3  (Previous week: 6-3
Total horizontal permits issued: 2536  (Previous week: 2533+3
Total horizontal wells drilled: 2032  (Previous week: 2026+6
Total horizontal wells producing: 1584  (Previous week: 1574+10
Utica rig count: 24  (Previous week: 24)  +-0

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Friday, June 23, 2017

Shale Efficiency May Have Hit Its Peak For Now

Learning takes time and effort. But a good education pays off. 
North America’s oil industry has been in school for the past three years, studying how to become more productive in a fragile $50-a-barrel world. Many companies in the class of 2017 have graduated and are now competing hard for a greater share of global barrels.

Having said that, North America’s education on how to make oilfields more productive appears to be stalling. After a breathtaking uphill sprint, productivity data from the U.S. Energy Information Agency (EIA) shows that the last few thousand oil wells in top-class American plays may have hit a limit—at least for now.

Our Figure this week shows a classic S-curve learning pattern in the mother lode of all oil plays: the Permian Basin. Slow improvements to rig productivity (2012 to 2015) were followed by a steep period of rapid learning (2015 to 2017). Eventually limitations set in and advancement quickly stalled upon mastering new processes (2017 to the present).
Continue reading by clicking here.

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Thursday, June 22, 2017

Utica Rig Count Drops One on Latest ODNR Report

New permits issued last week: 6  (Previous week: 8-2
Total horizontal permits issued: 2533  (Previous week: 2526+7
Total horizontal wells drilled: 2026  (Previous week: 2018+8
Total horizontal wells producing: 1574  (Previous week: 1575-1
Utica rig count: 24  (Previous week: 25)  -1

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Wednesday, June 21, 2017

Eclipse Resources Goes Long Again with Third "Super-Lateral" Well

From an Eclipse Resources press release:
The Company has recently turned its seven well Moser pad to sales, located in the Company’s Utica Shale dry gas window acreage in eastern Monroe County, Ohio. The Moser pad wells are currently producing approximately 100 MMcf per day collectively as the Company continues to implement its “engineered” flowback procedure designed to bring the wells up to target production rates while preserving fracture conductivity and minimizing formation damage. These wells were completed using a number of new completions techniques, which may form the basis of future completion designs beyond the Company’s “Generation-3” design that resulted in the Company increasing all of its Utica Shale type well expectations over the course of the year. 
The Company also announced today that it has successfully drilled its third and newest “Super-Lateral” well, the Outlaw C 11H, with a total measured depth of approximately 27,750 feet and a lateral extension of approximately 19,500 feet in 17 days from spud to TD in the Company’s Utica Shale Condensate area, setting a new lateral length record for the Company. 
Commenting on the operational activity, Benjamin W. Hulburt, Eclipse Resources Chairman, President and CEO, said the following, “I remain extremely pleased with our team’s operational cadence, and look forward to assessing the results from the seven well Moser pad. This pad, which contains 7 gross (7.0 net) wells with an average lateral length of approximately 7,200 feet, has recently been turned to sales slightly ahead of schedule, with starting pressures ranging up to approximately 7,500 pounds (psi). Building upon our Gen-3 frack design, this pad includes wells which are designed to test higher proppant volumes, engineered stage lengths and the use of diversion chemicals. Although extremely early in the life of these new exciting wells, we are initially very intrigued with what we are seeing. Based on the results of these wells so far, the continued performance of our Gen-3 wells, and the team’s ability to shorten our cycle times, I expect our production in the third quarter 2017 to be at least 350 MMcfe per day. 
I am also pleased to announce that we have drilled our third “Super-Lateral” well, with a record setting lateral length of approximately 19,500 feet in 17 days. This well, located in the Utica Condensate area, along with the recently drilled 19,300 foot Great Scott 3H well are expected to begin completions in the third quarter of this year. Additionally, we have completed the drilling of our second Marcellus Condensate well and are excited to begin applying our innovative completion techniques to this portion of our acreage during the third quarter of 2017. These Marcellus wells should allow us to further prove-up this area of our acreage that includes over 70 risked 10,000 foot lateral locations that can be developed in conjunction with our Dry Gas Utica position in this area of southeastern Ohio.”
- See more at:
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EQT to Acquire Rice Energy, Become Largest Gas Producer in U.S.

From the Pittsburgh Post-Gazette:
The largest natural gas basin in the U.S. will be home to the largest natural gas producer when two of southwestern Pennsylvania’s biggest oil and gas drillers become one in a $6.7 billion acquisition. 
EQT Corp., a Downtown-based firm, is buying Canonsburg-based Rice Energy Inc. in a deal that will put EQT ahead of ExxonMobil in gas production. It will also draw EQT’s focus even more to Washington and Greene counties, where much of Rice’s acreage zigzags EQT’s. 
The deal includes all of Rice’s exploration and production assets, as well as its interest in midstream master limited partnerships, which operate natural gas gathering and compression assets and water pipelines. 
It’s not clear yet what will happen to Rice’s 500 full-time employees, although layoffs are expected.
Click here to read more.

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Tuesday, June 20, 2017

Ohio Laborers Report More Than 4 Million Work Hours Over 16 Months — Thanks to Shale

by Jackie Stewart, Energy in Depth

The Ohio Laborers District Council (OLDC) recently reported that it surpassed 2016 expectations by more than a million work hours and totaled 4.2 million work hours over a 16-month period from January 2016 to April 2017, thanks to the numerous shale-related pipeline and natural gas power plant projects taking place in the Buckeye state.
Today, there are 3,000 Ohio laborers working on various stages of oil and gas development. And not only has Ohio’s flurry of shale-related activity resulted in thousands of jobs for skilled laborers from the OLDC — which represents a large share of Laborers International Union of North America-member (LiUNA) workers — the laborers are anticipating work for years to come, as Ohio Laborers Training Center executive director Robert Chatterson recently stated,
“The distribution work in gas pipelines is a 25-year project. Conceivably a young person can go into distribution work and work their whole career and retire with a great pension.”
Laborers’ work craft covers four main areas of shale-related construction: processing facilities, pipelines, road work and well pad construction. The skills for these jobs are taught at the 56,000 square foot Drexel J. Thrash Training Centerlocated 12 miles east of Mt. Vernon in Howard, Ohio. LIUNA has been preparing for the shale renaissance for years by ramping up their apprenticeship programs and recruiting Ohio men and women to work on pipelines and natural gas power plants. Just a few months ago, members of the Ohio State Senate discussed the pipeline workforce development training going on and how there is broad support for training the “jobs of the future.”
The laborers have been working for almost all the major oil and gas companies operating in Ohio, debunking a common myth perpetrated by anti-fracking activists that jobs are not coming to local communities. Remember this recent Columbus Dispatch headline?
The Dispatch claimed in that January 2014 article that, “there has been little change in the underlying labor market… transient workers are among the most tangible signs of the shale ‘boom’.” If that’s actually true, then why are union halls currently being reported as at maximum capacity.
Rocky DiGennaro, president of the Western Reserve Construction and Building Trades Council recently said,
“Building work is really good and most of the crafts are at maximum capacity.”
Also, according to Ray Hipsher, Pipeline Specialist at the Ohio Laborers District Council, the laborers in Ohio have worked on projects for: American Energy Partners, Antero Resources, Chesapeake Energy, Columbia Gas, Dominion East Ohio, Duke Energy, East Ohio Gas, Eclipse Resources, Gulfport Energy, Kinder Morgan, MarkWest Energy Partners, Rice Energy, Williams, Clean Energy Future, Energy Transfer Partners, TransCanada and Advanced Power, just to name a few. LiUNA has 17,000 members statewide and they would like to continue this work and expand their operations into other projects as well. But don’t take our word for it, as Hipsher also recently said,
The shale industry is hiring local workforce. That’s going to keep the money in the community and the laborers doing the work are going to take pride and care of the quality of their work, because we are your neighbors. We care about doing this pipeline work right and environmentally sound.”
Anti-fracking groups also try to perpetuate the myth that all jobs created by shale are only temporary. In 2011, ThinkProgress put out a blog entitled “Oil Industry Report Outlines How to Create Temporary Jobs While Permanently Destroying the Climate” that said, “They are all temporary jobs, since they aren’t sustainable.”
Statements like these prove how incredibly out of touch groups like ThinkProgress are with what’s really happening in states like Ohio.
As Chatterson stated earlier, distribution work on pipelines requires long-term maintenance. The same is true for natural gas power plants, and Ohio happens to have $10 billion worth of natural gas power plant development in progress at the moment, activity that is slated to create over 6,700 jobs. Each one of these plants requires millions in maintenance and labor needs per year, and each plant is slated to be operation for 40 years.
Another curious example of misinformation campaign is the New Republic’s recent article entitled, “Fracking Isn’t the Job Creator You Think It Is.” The article posed these questions:
“Where do the workers extracting gas in Pennsylvania or Ohio live and spend their money? Where are the best jobs located? While the fracking industry may support the national economy as a whole, some places are winners and others are losers.”
Those are easy questions to answer: It’s clear that the workers there are 3,000 laborers working in Ohio and spending their money in Ohio. Where are the best jobs located? Ohio it appears, thanks to over $50.4 billion invested by the oil and gas industry. When it comes to creating millions of work hours and local jobs, it’s clear that Ohio is a “winner” — and it’s all thanks to fracking.

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