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Tuesday, April 24, 2018

Cabot Oil & Gas Will Drill First Utica Well in Green Township

From the Ashland Source:
Cabot Oil & Gas Corporation is proceeding with exploratory drilling plans to create wells for fracking in Ashland County.

"We are moving forward with our first well in Ohio," John Smelko, manager of environmental and regulatory compliance for Cabot's North Region told Ashland County Commissioners Thursday.

Smelko said the first well will be in Green Township, located about .8 miles from Ohio 511 on Township Road 2375. The company has already obtained permits from the Ohio Department of Natural Resources to construct a pad and a well in that location.

"Our goal is to begin construction of the pad on Tuesday," Smelko said. "We expect to take somewhere around three weeks or so to build that pad, and then we intend to start with the drilling portion of the project."

Smelko said the Texas-based oil and gas company will begin by drilling a vertical well to the depth of about 5,400 feet. From that vertical well, the company plans to begin horizontal drilling. The drilling process is expected to take about 30 days, he said.
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Gulfport Energy Provides 2018 1st Quarter Update

From a Gulfport Energy press release:
Gulfport Energy Corporation (NASDAQ:GPOR) (“Gulfport” or the “Company”) today provided an update for the quarter ended March 31, 2018. Key information for the first quarter of 2018 includes the following:
  • Net production averaged 1,288.6 MMcfe per day, a 2% increase over the fourth quarter of 2017 and 52% increase versus the first quarter of 2017.
  • Realized natural gas price, before the impact of derivatives and including transportation costs, averaged $2.44 per Mcf, a $0.54 per Mcf differential to the average trade month NYMEX settled price.
  • Realized oil price, before the impact of derivatives and including transportation costs, averaged $60.36 per barrel, a $2.54 per barrel differential to the average WTI oil price.
  • Realized natural gas liquids price, before the impact of derivatives and including transportation costs, averaged $0.71 per gallon, equivalent to $29.92 per barrel, or approximately 48% of the average WTI oil price.
  • Gulfport turned-to-sales 3 gross and net operated wells in the Utica Shale on March 31, 2018 and 7 gross (6.3 net) operated wells in the SCOOP throughout the first quarter of 2018.
Read the whole release by clicking here.

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Legal Battle Continues Over Proposed Second Power Plant in Lordstown

From Business Journal Daily:
Testimony concluded late Tuesday in a case that may determine whether a second $900 million electrical generation plant is built in Lordstown. 
Trumbull County Common Pleas Judge Peter Kontos said he would rule on the matter in about a week after attorneys for Clean Energy Future LLC and Clean Energy Future Lordstown submit their final briefs before the court. He instructed attorneys to file their final arguments by May 4. 
However, he urged both parties to find some middle ground and work toward a possible solution before he issues a ruling.

That appears unlikely at this time, noted Bill Siderewicz, president of Clean Energy Future, who indicated the legal sparring is far from over even after this part of the case is finished. 
Although the first three words of the company names are the same, they are different entities — one with their name ending in Lordstown, the other with the designation LLC. 
Clean Energy Future Lordstown, which owns the Lordstown Energy Center under construction in the village, argues that should a second plant be built at the site, it could cost its operation $6.7 million a year — a cost the company thinks should be absorbed by Clean Energy Future LLC. 
“They’re looking for an extortion payment,” Siderewicz said. “We’re not going to pay them a dime.”
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OPEC Strategy to Drive Up Oil Prices is Working

From Forbes:
In late 2016 OPEC engineered significant oil production cuts in order to address an oversupplied oil market. Global crude oil inventories had reached record highs, and the price of oil had crashed following a disastrous decision by the cartel in 2014 to defend market share. 
In contrast to the 2014 decision, this time OPEC’s strategy is having the desired effect. Over the past year, despite strong U.S. shale production growth, global inventories have steadily declined. According to the latest Oil Market Report from the International Energy Agency, supply is expected to lag demand for the rest of 2018, further depleting inventories: 
International Energy AgencyDemand/Supply balance through 2018. 
In response to declining inventories, global oil prices have steadily increased, breaking through three-year highs last week and again this week. West Texas Intermediate closed last week above $67/bbl, while Brent closed above $72/bbl. These prices are approximately 50% higher than they were last August. 
The latest bullish news for oil prices was a weekly report from the Energy Information Administration (EIA) showing another 1.1 million barrel drop in U.S. crude oil inventories. This now moves crude oil inventories down into the lower half of the range for this time of year.
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Report: Over 50,000 American Jobs to be Created by Natural Gas Exporters

by Jack Anderson, Energy in Depth
The United States will experience tremendous growth in job opportunities and economic productivity through 2050 thanks to the rise in natural gas exports, according to a new study commissioned by an energy industry trade group. As natural gas production in the United States keeps rising, there are more and more efforts underway to export the additional gas overseas as liquefied natural gas, or LNG, which will spur sustainable growth in the energy sector and related industries. This new study, Calculating the Economic Benefits of U.S. LNG Exports, quantifies how these developments will play out in the economy.
The report, prepared for LNG Allies by strategy consulting firm ICF, is the latest assessment to conclude that the shale boom is powering economic growth across the United States and throughout several economic sectors. Using baseline production and export forecasts from the US Energy Information Administration (EIA), the LNG Allies study finds that roughly 50,000 to 100,000 jobs will be supported by LNG exporters through 2050.
Source: LNG Allies, “Calculating the Economic Benefits of U.S. LNG Exports”
The LNG exporters will also spur enough upstream production to support a further 150,000 to 330,000 jobs across the natural gas industry. In total, LNG exports will add anywhere from $716 billion to $1.2 trillion of value to the US economy by mid-century, according to the report.
In conducting this assessment, ICF’s analysts reviewed possible natural gas production and export scenarios as described by the U.S. Energy Information Administration’s 2018 Annual Energy Outlook. Specifically, they reviewed the Reference case – which is the set of outcomes that the EIA believes to be the most likely path of development – along with a case in which future developments are heavily influenced by improved access to more oil and gas resources, and another that assumes much higher prices for oil and gas. The Reference case offers the most conservative – but still very impressive and beneficial – set of economic outcomes, while higher prices or improved productivity would spur even more growth.
At a rollout presentation held on Tuesday in Washington, D.C., LNG Allies Executive Director Fred Hutchisonexpressed optimism that more LNG production and export facilities would be commissioned in the near future. Each one of these projects are expected to directly support tens of thousands of construction jobs during the construction phase, and then drive upstream job creation once they are operational.
Currently, there are two LNG export terminals in the lower 48 states. Cheniere’s Sabine Pass terminal on the Gulf Coast of Louisiana opened for business in early 2016. More recently, Dominion’s Cove Point LNG terminal began operations on the Atlantic coast of Maryland, finally giving Marcellus shale gas producers access to overseas markets. Additionally, the United States has a longstanding LNG terminal in Alaska, which has historically brought Alaskan natural gas to Asian customers.
So how many more export terminals will rise? Presently, four more are in the works. Cheniere is building a second LNG terminal in Corpus Christi, Texas (and expanding its terminal at Sabine Pass). Sempra is building Cameron LNG in Louisiana, Freeport LNG is under construction in Freeport, Texas, and Elba Island LNG is nearing completion in Georgia. Three more terminals – Golden PassMagnolia and Lake Charles LNG – are fully permitted but have not yet begun construction. Another 18 terminals have been proposed and are seeking permits from regulatory agencies.
With American natural gas production showing no signs of slowing down, these LNG exporters seem to have a bright future ahead of them.
Source: U.S. Energy Information Administration

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$25 Million in Grants Made Available to Help Strengthen Energy Industry Against Cyberattacks

From Bloomberg:
The U.S. wants to fund research targeting better cybersecurity for the nation’s power grid and the oil and natural gas industry, less than a month after web attacks hobbled electronic communications for several pipeline operators.

The agency is making $25 million in grants available for projects that pursue new approaches to making the energy sector more resilient to cyberattacks. The deadline for applications is June 18, according to a statement Monday.

Earlier this month, at least seven U.S. pipeline companies said their electronic communications systems were shut down, with five confirming the disruptions were caused by a web attack. The threat followed a U.S. government warning in March that Russian hackers are conducting an assault on the electric grid and other targets.
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Blue Racer Carries on as the Quiet Giant of the Utica Shale

From Kallanish Energy:
Blue Racer Midstream is not often in the news. 
Its website features dusty old news releases that are several years old – with nothing since. 
Miles and miles of pipelines 
The privately held company quietly goes about its business in the Appalachian Basin. The company operates the largest network of gathering pipelines in the Utica Shale with more than 700 miles of pipelines, its so-called “super system,” said spokesman Cory Gerken, at a recent Utica Midstream conference in North Canton, Ohio. 
That includes 531 miles of rich gas lines, 39 miles of lean gas lines, 101 miles of liquids and 50 miles of condensate lines, he said. 
Serving Utica and Marcellus 
Its processing has grown from about 200 million cubic feet per day (MMcf/d) in March 2014, to 400 MMcf/d in March 2015, to 700 MMcf/d today, according to a Kallanish Energy review of company data.
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Rig Count in Utica Shale Declines Again


New permits issued last week: 6  (Previous week: 6+-0
Total horizontal permits issued: 2810  (Previous week: 2804+6
Total horizontal wells drilled: 2321 (Previous week: 2319+2
Total horizontal wells producing: 1888 (Previous week: 1883+5
Utica rig count: 22 (Previous week: 23)  -1


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