Friday, October 31, 2014

Mega Link Blowout for 10/31/14: Utica Shale Summit, Winter's Effect on Gas Prices in Ohio, Severance Tax Fight, and Much Much More

Gas & Oil:  Utica Summit II: Risks Must Be Managed   -   "Christopher Guith, who leads the development of the Energy Institute's policies related to oil and gas and nuclear energy for the U.S. Chamber of Commerce, said during a recent Utica Summit II event that while there is a lot of good news related to oil and gas development, there are also a few storm clouds forming..."

Pittsburgh Post-Gazette:  Bans on Fracking Up For Vote in Utica Shale   -   "In this fall’s midterm races, hydraulic fracturing enjoys political support from many conservatives and liberals. President Barack Obama often touts it as a reason for new found energy independence. Pennsylvania Gov. Tom Corbett, a Republican, and Tom Wolf, his Democratic challenger, have generally disagreed only on how to tax it. Yet pockets of resistance to the extraction technique commonly known as fracking, which has revolutionized the oil and gas industry, have appeared in..."

Columbus Business First:  Ohio Gov. John Kasich Says Proposed Severance Tax "a Complete and Total Ripoff"   -   "Ohio Gov. John Kasich had strong words for the oil and gas industry in a Tuesday candidate forum. The state legislature has feuded over how much the raise the state's oil and gas severance tax during..."

The Intelligencer/Wheeling News-Register:  Leak Roared Like Jet Engine   -   "“It sounded like a jet engine, or a real strong wind. We’re about 2.5 miles away, and it was still very loud,” Jefferson County Road 26 resident Joe Felix said. “My wife said she heard a bang, and then the jet engine sound began.” On Wednesday, American Energy officials joined regulators with the Ohio Department of Natural Resources and the Ohio Environmental Protection Agency at the well site near the Mingo Sportsmen’s Club, where specialists with Boots & Coots International Well Control Inc. successfully shut off the well that began leaking methane some time Tuesday..."

The Columbus Dispatch:  Eastern Ohio Pipeline Hauling Toxic Mix Catches Fire   -   "A pipeline carrying condensate, a toxic substance produced during natural gas and oil processing, caught fire in eastern Ohio early this morning. It burned several acres of Monroe County woodland before the pipeline pressure dropped low enough for the fire to burn itself out. No one was injured, and..."

Gas & Oil:  Higher Gas Prices Expected This Winter   -   "The U.S. Energy Information Administration (EIA) expects higher prices this winter for consumers using natural gas to heat their homes. But Ohioans could be paying less than consumers living in other parts of the country. Much of the country east of the Rocky Mountains experienced record low temperatures last winter, and those temperatures led to..."

Shale Play:  Oil, Rail Industries Want 7 Years to Fix Tank Cars   -   "The oil and railroad industries are urging federal regulators to allow them as long as seven years to upgrade existing tank cars that transport highly volatile crude oil, a top oil industry official said last month. The cars have ruptured and spilled oil during collisions, leading to intense fires. Jack Gerard, president of the American Petroleum Institute, told reporters..."

Natural Gas Now:  The Freaky CELDF and Its Radical Designs   -   "There are few fractivist groups more radical or freaky than the Community Environmental Legal Defense Fund (CELDF). We’ve written about them several times, including here, here and here, all of which are important to read to get a full understanding of just how freaky the organization is. They’re the folks who propose to overrule the Patriot Act, abolish corporations and grant plants and trees the right to sue, all by..."

Coshocton Tribune:  Man Injured in Oil Fracking Explosion   -   "One man was injured in an explosion last night at an oil fracking site near Quaker City. The man, whose name has not yet been released, was transported via medical helicopter to..."

Akron Beacon Journal:  Company plans to ship Ohio natural gas to Louisiana by adding capacity to pipelines   -   "Natural gas pulled from Ohio’s Utica shale could be moved to the Gulf Coast with the expansion of an existing pipeline. Kentucky-based Texas Gas Transmission LLC has proposed adding north-to-south capacity to its existing 690-mile pipeline system. It would retain..."

Press release:  Noble Energy Announces Third Quarter 2014 Results   -   "Noble Energy, Inc. (NYSE:NBL) announced today third quarter 2014 net income of $419 million, or $1.12 per diluted share. Excluding the impact of certain items, which would typically not be considered by analysts in published earnings estimates, third quarter 2014 adjusted income(1)was $110 million, or $0.28 per diluted share. Discretionary cash flow(1) was $811 million..."

Press release:  CONSOL Energy Reports Third Quarter Results   -   "CONSOL Energy Inc. (NYSE: CNX) had adjusted net income1 in the 2014 third quarter of $20 million, or $0.09 per share, after adjusting for unusual items, which are listed in the EBITDA reconciliation table on page 11. Adjusted EBITDA1 was $236 million for the 2014 third quarter, compared to $178 millionin the year-earlier quarter. Cash flow from operations..."

Times Reporter:  Projects in Tuscarawas, Harrison, Coshocton counties to move ahead if ODNR OKs grant fund requests   -   "The Ohio Department of Natural Resources is seeking more than $7.7 million in federal Abandoned Mine Land Grant funds for cleanup projects in 2015 in 16 counties, including Tuscarawas, Harrison and Coshocton counties. The projects will move ahead if the money is appropriated by Congress, said Jim Bishop,..."

Houston Chronicle:  Weinstein: Ban on oil exports has outlived its usefulness   -   "Partly because of President Barack Obama's indecision on approving the Keystone XL pipeline, Canada is now looking at Europe as a major potential market for its growing output of crude oil. To that end, a pipeline is under construction that will bring oil from Alberta and Saskatchewan to export terminals in Canada's Atlantic Provinces. Because of a recent ruling by the European Union that oil from the Alberta oil sands would be treated..."

Reuters:  Breakeven oil prices for U.S. shale: analyst estimates   -   "A sharp decline in oil prices over thepast four months has called into question the sustainability of North American shale production. Global benchmark Brent crude has fallen about 25 percent since June due to oversupply, weakening demand and indications that..."

Press release:  MarkWest Energy Partners Increases Quarterly Cash Distribution and 2014 Distributable Cash Flow Forecast   -   "MarkWest Energy Partners, L.P. (NYSE: MWE) (“MarkWest” or “the Partnership”) today announced that the Board of Directors of the General Partner of MarkWest Energy Partners, L.P., declared a cash distribution of $0.89 per common unit for the third quarter of 2014, for an implied annual rate of $3.56 per..."

WSIL TV:  Landowner Speaks Out About Fracking Lawsuit   -   "A group from Wayne County says they're fed up with state leaders, so they'll take them to court to get fracking. Illinois approved hydraulic fracturing more than a year ago. Lawmakers have spent months..."

Press release:  Hess Reports Estimated Results for the Third Quarter of 2014   -   "Hess Corporation (NYSE:HES) today reported net income of $1,008 million for the quarter ended September 30, 2014. Adjusted net income, which excludes items affecting comparability, was $377 million or $1.24 per common share, compared with $405 million or $1.18 per share in the year-ago..."

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Carroll County Weighing Future With Discussions About Development

From the Canton Repository:
Carroll County’s economic future was up for debate Thursday night, as residents and public officials, past and present, questioned the county’s development strategy. 
Since Utica Shale drilling started in the county, leaders have looked for ways to turn cash from the boom into long-term, sustainable development. 
Central to the discussion at Carrollton High School was the Northern Corridor project, which would extend water and sewer lines 11 miles from Malvern to Carrollton at a cost of $15 million, and upgrade parts of state Routes 43, 171 and 9 for another $6.92 million. 
Without improving its infrastructure and quality of life, the county won’t be able to attract new businesses, said Aaron Dodds, the county’s economic development director. 
The Northern Corridor improvements would be paid for by a private developer working in a partnership with the county, he said. In return, the county would give up sole decision-making authority on the project.
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New Natural Gas Processing Complex Opening Soon in Monroe County

From Columbus Business First:
The Berne processing complex in Monroe County, which has the capacity to hold three plants each processing 200 million cubic feet per day of natural gas, is almost ready to open. 
The first 200 million-capacity plant will open in November, said Casey Nikoloric, spokeswoman for Blue Racer Midstream LLC, the company that runs the Monroe County project. Construction of the second unit has started and should be in-service in April. 
Berne should be a boon to the chronically underdeveloped infrastructure in the Utica shale region. A new transmission line for the project was completed this week, according to a filing the company made to state regulators. Dallas-based Blue Racer had asked regulators for an expedited review of its plan to build the 138-kilovolt electrical transmission line in May and regulators approved the 2,000-foot line a month later.
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Marietta Continues to Take Its Time Considering Lease of City Property

From Shale Play:
The single bid received by the city to lease mineral rights on two pieces of Marietta property was reviewed by members of council late last month during a meeting of council's lands, buildings and parks and finance committees. 
The bid, submitted by MNW Energy LLC, would give the city the option to earn more than $183,000 - $4,750 an acre - by leasing rights at Goose Run and at Gunlock Park between Lowe's and Wal-Mart. The city would also earn a 17.5 percent royalty on any earnings made over the five-year lease term, said city safety-service director Jonathan Hupp. 
City Councilman Steve Thomas, D-3rd ward, said he is supportive of leasing the rights. 
"I'm good with it. We need the money. And it's not going to be disturbing the ground," said Thomas. 
Read the rest of the article by clicking here.

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Study Finds Economic Benefits From Energy Industry Are Increasing

From RigZone:
The economic benefits to the United States from the energy industry have more than doubled in just the past ten years, even after accounting for inflation, according to a new study by The Perryman Group. The growth in the industry is worth about $1.2 trillion in gross product each year, the study noted, adding that the growth in the oil and gas industry since the economic recession has been “dramatic.” In fact, since the start of the economic recovery, the energy industry has contributed about 30 percent of the total job growth for the nation, Dr. Ray Perryman, president and CEO of The Perryman Group, said. 
While it is generally recognized that a thriving oil and gas sector helps to create new jobs within and outside of the energy sector, it is less well-recognized just how important the industry is to overall employment. However, the study shows just how large a role the energy industry plays in the number of new jobs in the country. 
When the multiplier effect was added to the number of jobs directly generated by upstream activity in the industry, there were 9.3 million jobs – or 7 percent of the overall economy – generated in the United States, according to The Perryman Group study. That is about 7 percent of the overall economy. 
Crude oil production levels are as high as they were in the late 1980s, and they are still climbing. U.S. production was nearly 2.4 billion barrels in 2012, and climbed to 2.7 billion in 2013. By the end of 2014, the United States is likely to be the world’s largest crude oil producer, Perryman said. 
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New Study: Ethane Production Could Support 3 Large Cracker Plants in Appalachian Region

From Gas & Oil:
A new study conducted by Cleveland State University indicates enough ethane is estimated to be produced to support three large cracker plants in the Appalachian Region — and, just as importantly, current plans for plant construction specifically target Ohio, Pennsylvania and West Virginia. The information was brought forward during a Utica Summit II, held in mid-October at Stark State College, in Canton. 
Ethane cracker plants would be a tremendous boon to the area in terms of further manufacturing development. An ethane cracker facility creates ethylene, a compound used in the manufacture of plastic. Some estimates predict between 400 to 600 jobs in each cracker plant, with another 2,000 plus in indirect jobs and more than 8,000 additional jobs in the ripple effect that would follow with downstream manufacturers who rely on ethane and other products that will be created at the plants. 
Huge economic benefits to the Appalachian Basin region were projected when the plans for a cracker plant to be built by Odenbrecht/Brazkem across the River in Parkersburg, West Virginia, were released. So, one can only imagine the impact the smaller cracker plant now planned for possible construction by Appalachian Resins Inc. in Salem Township, located in Monroe County, Ohio, will have on the state and the region. There is another large facility slated to be built in Pittsburgh, Pa., by Shell Oil Company, which would round things out by placing a large cracker plant in each of the three states that are part of Marcellus and Utica natural gas production, Ohio, Pennsylvania and West Virginia.
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Why Did Chesapeake Agree to Sell Off a Huge Chunk of Marcellus and Utica Shale Assets?

From Market Realist:
Chesapeake Energy (CHK) is on track with its “asset-divestment agenda.” On October 16, Chesapeake announced the sale of a large portion of its oil and gas assets in the Marcellus and Utica shales to Southwestern Energy (SWN).
CHK key operating areasEnlarge GraphThe image above shows Chesapeake’s operational footprint in the Marcellus and Utica regions. Read more about Chesapeake’s operations and recent quarterly performance at “A key overview of Chesapeake and its second quarter 2014 earnings.” 
The price tag 
SWN will buy the Marcellus and Utica assets for ~$5.38. The transaction is believed to be Southwestern’s largest deal. Later in this series, we’ll discuss what the deal means for SWN. 
Chesapeake wanted to achieve $4 billion in spending cash by the end of the year. It planned to get the money through asset divestments. 
We’ll discuss why Chesapeake wants to achieve this goal later in this series.
Read more of this series by clicking here.
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Wednesday, October 29, 2014

Slow Week Moves Utica Shale to 1,567 Total Permits Issued in Ohio

The Ohio Department of Natural Resources has made the latest weekly permitting update available.  It wasn't a very busy week.

Only 7 new permits were issued last week.  Jefferson County was the focal point, with 3 new permits.  That brings the total number issued there to 46.  2 permits were issued for drilling in Carroll County, and 1 permit each for Belmont and Tuscarawas counties.

With these 7 new permits, there are now 1,567 total permits that have been issued in Ohio for Utica shale drilling.  1,141 wells have been drilled and 607 are producing.  The Utica rig count is 44.

View the whole report by clicking here.

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Monday, October 27, 2014

Rex Energy Provides Third Quarter Production Results, Increases Full Year 2014 Production Guidance, Updates 2015 Hedge Position and Announces Date of Third Quarter Earnings Release

  • Third quarter production of 169.7 MMcfe/d exceeds high end of company guidance by 3%; represents a 32% sequential increase in average daily production over the second quarter of 2014 and 72% over the second quarter of 2013
  • Average daily production from oil, condensate and NGLs (including ethane) reached a record level of 10.4 MBoe/d, a 61% increase over the second quarter of 2014
  • Record oil and condensate production of 3.3 Mboe/d, a 20% increase over the second quarter of 2014
  • Full year 2014 production guidance increased by 2% at the midpoint of the guidance range 
STATE COLLEGE, Pa., Oct. 20, 2014 (GLOBE NEWSWIRE) -- Rex Energy Corporation (Nasdaq:REXX) today provided its preliminary third quarter 2014 production results, increased its full year 2014 production guidance and announced the date of its third quarter 2014 earnings release and conference call.

Production Update

Third quarter 2014 production volumes were 169.7 MMcfe/d, an increase of 72% over the third quarter of 2013 and 32% over the second quarter of 2014, consisting of 107.0 MMcf/d of natural gas and 10.4 Mboe/d of oil, condensate and NGLs (including 2.6 Mboe/d of ethane). Oil, condensate and NGLs (including ethane) accounted for 37% of net production during the third quarter and increased 61% sequentially over the second quarter of 2014. Production from oil and condensate reached a record level of 3.3 Mboe/d, an increase of 20% over the second quarter to 2014. Third quarter 2014 production of 169.7 MMcfe/d exceeded the high end of the company's production guidance range of 159.0 - 165.0 MMcfe/d by 3%.

"We are extremely pleased with our production results for the third quarter," said Tom Stabley, Chief Executive Officer of Rex Energy. "In just 18 months, we have more than doubled the company's average daily production while nearly tripling the company's liquids production. We believe our rapid growth in production over the last year and a half further demonstrates the quality of both our asset base and our technical team."

Fourth Quarter 2014 and Full Year 2014 Production Guidance

Rex Energy is providing its initial production guidance for the fourth quarter of 2014 and increasing its previously issued production guidance for the full year 2014. The company expects fourth quarter production volumes to range from 179.0 MMcfe/d - 185.0 MMcfe/d, representing a sequential increase of 7% at the midpoint of guidance over the third quarter and a 65% year-over-year increase at the midpoint of guidance. In addition, the company is increasing its full year 2014 production guidance by 3.0 MMcfe/d at the midpoint to 150.0 MMcfe/d - 152.0 MMcfe/d from its previously announced guidance of 146.0 MMcfe/d - 150.0 MMcfe/d. The increase in full year production guidance is due to strong production results from the company's existing producing properties.

In addition, the company continues to expect its full year 2014 average realized natural gas price, including the effects of basis hedges, to be approximately $0.60 - $0.80 below the Henry Hub natural gas index price.

2015 Hedging Update

Consistent with its historical practice, the company continues to add to its hedging position at prices that generate strong rates of return in order provide additional certainty regarding its expected cash flows. For 2015, the company now has approximately 49% of its current natural gas production hedged at a weighted average floor price of $4.15. The company has also hedged approximately 43% of its current oil production for the first half of 2015 at a weighted average floor price of $90.88. Finally, the company has recently entered into agreements to lock in approximately 60% of its expected natural gas production previously sold under Dominion South Point pricing for 2015 at a weighted average price of $0.82 below the Henry Hub natural gas index price.

Third Quarter Earnings Release

The company plans to release third quarter 2014 financial and operational results on Tuesday, November 4, 2014 after market close. Management will host a live conference call and webcast on Wednesday, November 5, 2014 at 10 a.m. ET to review third quarter financial results and operational highlights. Reference material for the conference call and webcast will be posted to the company's website prior to the call.

All financial results included in the earnings release or discussed on the conference call and webcast will remain subject to our independent auditor's review. The telephone number to access the conference call is (866) 437-1772. The conference call will also be available for replay through the company's website at under the Investor Relations tab. The replay of the event and reference materials will be available on the company's website through December 4, 2014.

About Rex Energy Corporation

University of Cincinnati Research Takes Unique Approach to Look at Fracking's Effect on Groundwater

From WaterWorld:
A new research project at the University of Cincinnati (UC) is taking a groundbreaking approach to monitoring groundwater resources near hydraulic fracturing (fracking) sites in the state of Ohio. Conducted by Claire Botner, a UC graduate student in geology, the research is part of UC Groundwater Research of Ohio (GRO), a collaborative research project based out of the university to examine the effects of fracking on groundwater in the Utica Shale region of the eastern part of the state.

First launched in Carroll County in 2012, the GRO team of researchers is examining methane levels and origins of methane in private wells and springs before, during and after the onset of fracking. The team travels to the region to take water samples four times a year. Amy Townsend-Small, the lead researcher for GRO and a UC assistant professor of geology, said the UC study is unique in comparison with studies on water wells in other shale-rich areas of the U.S. where fracking is taking place -- such as the Marcellus Shale region of Pennsylvania. 
Townsend-Small explained that water samples finding natural gas-derived methane in wells near Pennsylvania fracking sites were taken only after fracking had occurred, so methane levels in those wells were not documented prior to or during fracking in Pennsylvania. The Ohio samples are being analyzed by UC researchers for concentrations of methane as well as other hydrocarbons and salt, which are pulled up in the fracking water mixture from the shales. The shales are ancient ocean sediments.
To read more, including the results of testing to this point, click here.

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Report Claims That Methane Leaks Negate Positive Climate Effects of Natural Gas

From ThinkProgress:
Satellite observations of huge oil and gas basins in East Texas and North Dakota confirm staggering 9 and 10 percent leakage rates of heat-trapping methane. “In conclusion,” researchers write, “at the current methane loss rates, a net climate benefit on all time frames owing to tapping unconventional resources in the analyzed tight formations is unlikely.”

In short, fracking speeds up human-caused climate change, thanks to methane leaks alone. Remember, natural gas is mostly methane, (CH4), a super-potent greenhouse gas, which traps 86 times as much heat as CO2 over a 20-year period. So even small leaks in the natural gas production and delivery system can have a large climate impact — enough to gut the entire benefit of switching from coal-fired power to gas. 
Back in February, we reported that the climate will likely be ruined already well past most of our lifespans by the time natural gas has a net climate benefit. That was based on a study in Science called “Methane Leaks from North American Natural Gas Systems” reviewing more than 200 earlier studies. It concluded that natural gas leakage rates were about 5.4 percent.

The new study used satellites to look at actual “methane emissions for two of the fastest growing production regions in the United States, the Bakken and Eagle Ford formations,” between the periods 2006–2008 and 2009–2011. They found leakages rates of 10.1 percent and 9.1 percent respectively!
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New Report: Fracking Companies Are Exploiting the Halliburton Loophole to Inject Toxic Chemicals

An Environmental Integrity Project Investigation finds at least 6 fracking fluids on the market with higher concentrations of benzene (a carcinogen) than diesel fuel, and at least 153 wells fracked with liquids containing ethylbenzene (a probable carcinogen) in 11 states (OK, ND, TX, WY, CO, CA, OH, LA, NM, MT, and MI).


WASHINGTON, D.C. – Despite a federal ban on the use of diesel fuel in hydraulic fracturing without a permit, several oil and gas companies are exploiting a Safe Drinking Water Act loophole pushed through by Halliburton to frack with petroleum-based products containing even more dangerous toxic chemicals than diesel.

For example, a drilling company in West Texas injected up to 48,000 gallons of benzene (a carcinogen) into the ground just last month.

The report by the Environmental Integrity Project, “Fracking’s Toxic Loophole,” describes how a gap in the Safe Drinking Water Act – nicknamed the “Halliburton Loophole” – requires permits for fracking with diesel fuel, but allows companies to inject other petroleum products even more toxic than diesel without any permitting requirements or safeguards for underground water supplies.

“This double standard illustrates what happens when Congress manipulates environmental statutes for the benefit of polluters, instead of allowing EPA to make public health decisions based on the best available science,” said Eric Schaeffer Executive Director of the Environmental Integrity Project and former Director of Civil Enforcement at EPA.

Fracking with fluids containing benzene (a carcinogen), ethylbenzene (a probable carcinogen), and other highly toxic chemicals is a potential threat to drinking water supplies and public health, but it appears to be common, according to the Environmental Integrity Project’s review of product descriptions available online and company disclosures to an industry-sponsored database of chemicals used in hydraulic fracturing, called “FracFocus.”

At least six fracking fluid additives on the market today contain more benzene (a carcinogen) than diesel fuel. And at least 21 fluids sold by Halliburton and other companies contain much higher concentrations of ethylbenzene (a probable carcinogen) than benzene, according to industry product descriptions available online. These fracking fluid additives also contained very high levels of xylene and toluene, which can cause neurological problems and other health effects.

“To protect public health, Congress should repeal the Halliburton Loophole and EPA should broaden the categories of fracking fluids that require Safe Drinking Water Act permits,” said Schaeffer. “Without these reforms, we are perpetuating a loophole that allows the unregulated injection of unlimited quantities of highly toxic pollutants into the ground.”

Exactly how often oil and gas companies use these toxic petroleum products is not clear, in part because not all firms disclose to FracFocus. But even the limited data available on FracFocus shows at least 153 wells in 11 states were fracked with fluids containing ethylbenzene between January 2011 and September 2014, with the largest numbers of wells in Oklahoma (77 wells), North Dakota (23), Texas (20), Wyoming (11), Colorado (9), California (5), Ohio (3), Louisiana (2), New Mexico (1), Montana (1), and Michigan (1).

In some cases, the amount of toxic fracking fluids injected into the ground is large. For example, in September, a Texas-based oil and gas company called BlackBrush O&G, LLC, reported injecting a mix of crude oil, butane, and other fluids containing up to 48,000 gallons of benzene into a well in Dimmit County, Texas. Between May 2013 and February 2014, another firm, Discovery Operating Services, reported injecting solvents containing nearly 1,000 gallons of benzene into eleven wells in Midland and Upland Counties in Texas.

Sharon Wilson, Texas organizer for Earthworks’ Oil & Gas Accountability Project, said: “Texas is in a record-breaking drought where private water wells and even wells for entire towns are going dry. Every drop is precious so we cannot risk polluting any water with toxic fracking chemicals.”

On August 13, EIP released a report, “Fracking Beyond the Law,” that documented the problem of illegal fracking with diesel fuel. The report identified 351 wells fracked with diesel without required Safe Drinking Water Act Permits between 2010 and July 2014. In a letter sent to EPA on October 6, EIP identified an additional 243 wells fracked with diesel. The problem of fracking with diesel was also highlighted in reports by Congressional Democrats in 2011 and the United States Government Accountability Office in June 2014.

The Environmental Integrity Project is a 12-year-old nonprofit organization that works to protect public health by advocating for the enforcement of environmental laws.

To read a copy of the report, click here.

To listen to an audio recording of Eric Schaeffer and Sharon Wilson speaking during the telephone press conference to release the report, click here. They answer questions from reporters during the call.
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Carroll Concerned Citizens Screens Video on Shale Gas & Oil Radioactive Wastes

CARROLLTON, OHIO: Carroll Concerned Citizens will show a video by Dr. Julie Weatherington-Rice at its Thursday November 6 meeting that provides insight into the links between shale gas and oil wastes and surface radioactivity.

Filmed in September as part of an Ohio State University Extension educational outreach program, Dr. Weatherington-Rice shares somewhat technical information about radioactive wastes from Marcellus and Utica shales. The Ohio Fracture Flow Working Group’s research seeks to answer questions such as: What radioactive wastes are, How they are managed, and Should we be concerned.

The meeting will begin at 7:00pm at the Church of Christ, 353 Moody Ave. Carrollton. It is free and open to the public.
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Oil and Gas Officials From Multiple States Compare Notes in Columbus

From Columbus Business First:
Ohio oil and gas officials often say that the state's Utica shale play still is in its infancy. It's a common refrain made to temper any outsized ambitions about the current state of hydraulic fracturing and horizontal drilling in the eastern part of the state. 
But rarely are oil and gas officials in the same room to compare and contrast. That's not the case this week – government officials involved in regulating the burgeoning U.S. shale boom gathered at the Hyatt Regency as part of the Interstate Oil and Gas Compact Commission, a multi-state group that shares concerns and stories that emanate from the industry. 
Oklahoma, North Dakota and Colorado all are ahead of Ohio in shale production, where there are 1,548 permits to drill in the Utica shale play compared with just three only four years ago.
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Thursday, October 23, 2014

Ohio Courts Busy Ruling on Oil and Gas-Related Matters

From BakerHostetler's North America Shale Blog:
Due to increased drilling activity in the Utica shale formation, state and federal courts in Ohio and the 6th Circuit have recently issued decisions related to local drilling regulations, drilling permits, leasing, indemnity provisions, and whether a landowner can state a strict liability claim against a drilling company that survives a motion to dismiss. While separate, future blog entries will discuss in more detail Ohio’s Dormant Mineral Rights Act and strict liability claims against fracking operations, the following post summarizes some recent developments in Ohio law that are relevant to the oil and gas industry.
The post goes on to examine several decisions, categorized under the headings: Obstacles to Drilling, Lease Terms, and Potential Liability.  Click here to read the whole article.

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Magnum Hunter Resources Completes Production Test Results on Stewart Winland Pad in Tyler County, West Virginia

Combined Flow Tests of 97.4 MMCFE per Day

HOUSTON, TX--(Marketwired - Oct 22, 2014) - Magnum Hunter Resources Corporation (NYSE: MHR) (NYSE MKT: MHR.PRC) (NYSE MKT: MHR.PRD) (NYSE MKT: MHR.PRE) (the "Company" or "Magnum Hunter") announced today that the Company has completed test results on its 100% owned Stewart Winland Pad located in Tyler County, West Virginia. The Stewart Winland Pad has four 100% owned recently completed wells (3 Marcellus and 1 Utica).

The Stewart Winland 1301M was drilled and cased to a true vertical depth of 6,155 feet with a 5,762 foot horizontal lateral, and successfully fraced with 27 stages. The well tested at a peak rate of 17.0 MMCFE of natural gas per day (~23% Condensate and ~25% NGL) on an adjustable choke.

The Stewart Winland 1302M was drilled and cased to a true vertical depth of 6,147 feet with a 5,676 foot horizontal lateral, and successfully fraced with 29 stages. The well tested at a peak rate of 17.1 MMCFE of natural gas per day (~19% Condensate and ~26% NGL) on an adjustable choke.

The Stewart Winland 1303M was drilled and cased to a true vertical depth of 6,149 feet with a 5,762 foot horizontal lateral, and successfully fraced with 29 stages. The well tested at a peak rate of 16.8 MMCFE of natural gas per day (~20% Condensate and ~26% NGL) on an adjustable choke.

As previously reported on September 24, 2014, the Company's 100% owned Stewart Winland 1300U (Utica well) tested at a peak rate of 46.5 MMCF of natural gas per day (~7,750 BOE per day) on an adjustable rate choke with 7,810 psi FCP. The Stewart Winland 1300U well was drilled and cased to a true vertical depth of 10,825 feet with a 5,289 foot horizontal lateral, and successfully fraced with 22 stages.

Management Comments

Mr. Gary C. Evans, Chairman of the Board and Chief Executive Officer of Magnum Hunter, commented, "We are pleased to report our company's highest production test rates to-date on three recently completed Marcellus wells located in Tyler, County West Virginia. To have successfully completed four very high production rate wells (three Marcellus and one Utica) that have tested on a combined basis at 97.4 MMCFE per day on one single pad, is a testimony to both the quality of the rock underlying our Company's lease acreage as well as the knowledge and experience of our management team and field personnel and what they have learned over the past three years in drilling and completing over fifty wells in the region. Additionally, this type of production obviously has significant implications for our midstream subsidiary, Eureka Hunter Pipeline, LLC, where all of this new natural gas and liquids production is currently tied in."

About Magnum Hunter Resources Corporation

Wednesday, October 22, 2014

Editorial: Anti-Fracking Activists Are Arrogant and Community Bill of Rights is Ridiculous

From the Youngstown Vindicator:
To understand the mentality of the individuals who refuse to take “no” for an answer in their campaign to ban fracking and other related gas and oil activities in the city of Youngstown, consider this comment: 
“There’s no one protecting our air and property rights, so the community members have to do it.” 
Thus said Susie Beiersdorfer, one of the mainstays of the committee that has again placed the anti-fracking Community Bill of Rights charter amendment on the Nov. 4 general election ballot in Youngstown. 
On three previous occasions, city residents rejected the anti-fracking charter amendment and the arguments put forth by Beiersdorfer, and her husband, Ray, a public employee. 
But they and other self-styled protectors of the people of Youngstown who are thought of as environmental bumpkins refuse to give the voters the respect they deserve. 
Let Susie Beiersdorfer’s opinion of city residents be your guide as you attempt to understand what’s driving the anti-fracking proponents.
Read the whole editorial by clicking here.

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New Study Zeroes In On Major Pollution Sources from Oil and Gas Operations

From the University of Colorado Boulder:
Oil and natural gas production fields can emit large amounts of air pollutants that affect climate and air quality—but tackling the issue has been difficult because little is known about what aspects of complex production operations leak what kinds of pollutants, and how much. 
Now a study led by the Cooperative Institute for Research in Environmental Sciences (CIRES) the journal Atmospheric Chemistry and Physics sheds light on just that, pinpointing sources of airborne pollutants. 
CIRES is a joint institute of the University of Colorado Boulder and the National Oceanic and Atmospheric Administration.

The results have important implications for mitigation strategies in the nation’s oil and natural gas production. 
“Before you can stop a leak, you have to know where it is,” said lead author Carsten Warneke, an atmospheric chemist with NOAA’s Cooperative Institute for Research in Environmental Sciences (CIRES) at the University of Colorado Boulder. “This study tells us where the largest emissions are coming from, and that, in turn, helps industry identify what they can do to reduce emissions as cheaply and effectively as possible.”
Find out much more about this study by clicking here. 

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Company Behind Keystone XL Pipeline Receives Climate Leadership Award

From the Huffington Post:
The company that wants to build the Keystone XL pipeline was recognized this week for leadership on climate change -– to the shock of environmental activists. 
Alberta-based TransCanada, which has been seeking permission to build the 1,660-mile pipeline from Canada's oil sands to refineries in Texas, was included as a corporate climate leader on the Carbon Disclosure Project's Climate Performance Leadership Index 2014. The Carbon Disclosure Project, or CDP, is a United Kingdom-based nonprofit that works with companies to tally and report their greenhouse gas emissions. TransCanada was one of five energy sector companies included on the "A List" in this year's report. 
The report notes that the company has set targets for emission reductions, and includes a quote from TransCanada: "Our business strategy is informed by the risks and opportunities from climate change regulations, physical climate parameters and other climate-related developments such as uncertainty in social drivers ... we anticipate that most of our facilities will be subject to future regulations to manage industrial [greenhouse gas] emissions."
Read the whole article by clicking here.

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Tuesday, October 21, 2014

Links for 10/21/14: Kent State Shale Training, Chesapeake/Southwestern Deal Called Win-Win, and More

Gas & Oil:  Kent State University Offers Job Training in Gas, Oil Industry   -   "Kent State University at Tuscarawas, in partnership with Stark State College, ShaleNET and Ohio Means Jobs (The Employment Source), is offering a floor hand course beginning Nov. 3. This three-week class will run Monday through Friday from 8 a.m. to 4:30 p.m. at the..."

National Science Foundation:  New Tracers Can Identify Frack Fluids in the Environment   -   "Scientists have developed new geochemical tracers that can identify hydraulic fracturing flowback fluids that have been spilled or released into the environment. The tracers have been field-tested at a spill site in West Virginia and downstream from an..."

Columbus Business First:  Bank Deposits Booming in Utica Shale Counties   -   "Just five years ago, in the midst of the Great Recession, it probably would have been unthinkable to see some of Ohio’s fastest-growing banks located in small rural areas east of..."

Bloomberg:  Oil Drop Makes Drillers Own Worst Enemy; Gas Offers Haven   -   "U.S. oil producers that saw profits soar on the North American shale boom are feeling the downside of success: falling prices and shrinking cash are threatening to slow development. At the same time, as crude prices approach four-year lows, natural gas companies are experiencing..."

Energy in Depth:  New Report Says Natural Gas Bad for Climate – Because It’s Good for the Economy   -   "This week, a group of researchers published a report in the journal Nature that hazards yet another attempt at organizing a semi-coherent case against natural gas qua an effective means of addressing climate change. Of course, we’ve seen papers like this in the past, and we’ve addressed at length each of their respective bad-inputs, faulty assumptions and architectural inadequacies in..."

Business Wire:  Fitch: Chesapeake/Southwestern Deal a Strategic Win-Win   -   "The $5.4 billion southern Marcellus and Utica shale asset sale announced yesterday is considered to be a strategic win-win for both Chesapeake Energy Corp. (Chesapeake [BB/Positive]) and Southwestern Energy Company (Southwestern [BBB-/Stable]), according to Fitch Ratings. Chesapeake stands to monetize a non-core asset that will provide considerable proceeds to continue paying down debt and simplifying its capital structure as well as pursue other strategic initiatives. Southwestern will gain..."

Press release:  Antero Resources Third Quarter 2014 Operations Update   -   "Antero’s net daily production for the third quarter of 2014 averaged 1,080 MMcfe/d, including 25,000 Bbl/d of liquids (14% liquids). Third quarter 2014 production represents an organic production growth rate of 91% and 21% from the third quarter of 2013 and second quarter of 2014, respectively. Liquids production for the third quarter of 2014 represents an..."

Norwood News:  Opinion: Rebutting the Climate Change Argument   -   "A recent letter to the editor by Diana Pedi titled, Climate Change Happens in The Bronx Too took aim at fracking even though it’s thanks to fracking and the increased use of natural gas that the U.S. has significantly lowered greenhouse gas emissions. According to Pedi, fracking is to blame for climate change because, “fracking releases methane.” That claim has been directly contradicted by..."

Gas & Oil:  American Energy Partners Regional Headquarters to Be Built in Cambridge   -   "Aubrey McClendon, CEO of American Energy Partners, is locating his regional headquarters in Cambridge. The facility will be constructed at the D.O. Hall Business Center and will create 125 jobs. The Oklahoma City-based American Energy Partners LP has raised billions to..."

The Motley Fool:  Former Chesapeake Energy CEO Sets Sights on California   -   "Bloomberg recently reported that former Chesapeake Energy (NYSE: CHK ) CEO Aubrey McClendon is considering a bid for Freeport-McMoRan's (NYSE: FCX ) California oil assets. The assets, which are worth about $5 billion, would seem like a real departure from the shale-focused growth strategy that McLendon pursued at both..."

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Utica Shale Now Up to 1,560 Permits on Latest Report

The latest weekly permitting update from the Ohio Department of Natural Resources is now posted.  It was a busy week for Harrison County as the Utica shale numbers continue to rise.

12 new permits were issued last week.  6 of those permits were issued to American Energy Utica for Harrison County wells.  5 went to Antero Resources for Monroe County sites, and the remaining 1 permit is for a Belmont County well to be drilled by Rice Drilling.

These 12 new permits now move the Utica shale up to 1,560 total permits issued.  1,122 wells have been drilled, 607 are producing, and the Utica rig count is 46.

View the report by clicking here.

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Chesapeake Sells Off Almost 25% of Utica/Marcellus Operation

Southwestern Energy has acquired 413,000 acres of Marcellus and Utica shale assets from Chesapeake Energy in a $5.375 billion transaction.  Here are the announcements from the two companies.

First, Southwestern Energy:
Southwestern Energy Co., Houston, has agreed to acquire assets in the southern Marcellus shale and a portion of the eastern Utica shale in West Virginia from Chesapeake Energy Corp., Oklahoma City, for $5.375 billion.
The deal, expected to close in the fourth quarter, encompasses 413,000 net acres and 1,500 wells in northern West Virginia and southern Pennsylvania along with related property, plant, and equipment. Average working interest in the properties is 67.5%.
Of a total of 435 horizontal wells, 256 are operated and producing in the Marcellus and Utica and an additional 179 are nonoperated or nonproducing in the Marcellus and Utica.
Net production in September totaled 336 MMcfd of gas equivalent, of which 55% is gas, 36% are NGLs, and 9% is oil. As of Dec. 31, 2013, net proved reserves associated with these properties totaled 221 million boe.
Southwestern Energy will assume a portion of Chesapeake’s firm transportation and processing capacity commitments. Based on capacity and expected future commitments, the company’s preliminary plans are to begin with 4-6 rigs next year and increase to 11 rigs by 2017.
Southwestern Energy estimates that it can drill for a minimum of 20 years maintaining that 11-rig pace. By yearend 2017, the reserve mix for the company is estimated to be one-third each for the Fayetteville, northeast Marcellus, and the newly acquired West Virginia and Pennsylvania properties, compared with two-thirds for the Fayetteville and one-third northeast Marcellus as of the day the deal took place.
Southwestern previously purchased 162,000 net acres in the Marcellus from Chesapeake for $93 million, giving Southwestern Energy 337,000 net acres in the play upon closing of the deal (OGJ Online, Apr. 30, 2013). Earlier this year, Southwestern Energy agreed to purchase 312,000 net acres in the Niobrara shale from Quicksilver Resources Inc. and Swepi LP, a unit of Royal Dutch Shell PLC, for $180 million (OGJ Online, Mar. 7, 2014).
Doug Lawler, Chesapeake’s chief executive officer, commented on the sale from his company’s perspective, “It’s important to note that this transaction has no impact on our expected growth profile or on our views around maintaining a disciplined capital program. We expect our full-year production guidance for 2015 to remain in the range of 7-10% growth from 2014 levels adjusted for asset sales.”
As of May, the total value of sales and divestitures for the year made by Chesapeake totaled more than $4 billion (OGJ Online, May 16, 2014).
Next, from Chesapeake Energy:

Chesapeake Energy Corporation (NYSE:CHK) announced that it has executed a Purchase and Sale Agreement to sell assets in the Southern Marcellus Shale and a portion of the Eastern Utica Shale in West Virginia to Southwestern Energy Company (NYSE:SWN) (“Southwestern”) for aggregate proceeds of $5.375 billion. The transaction, which is subject to certain customary closing conditions, including the receipt of third-party consents, is expected to close in the fourth quarter of 2014.
Chesapeake has agreed to sell approximately 413,000 net acres and approximately 1,500 wells in Northern West Virginia and Southern Pennsylvania, of which 435 are in the Marcellus and Utica formations, along with related property, plant and equipment. Average net daily production from these properties was approximately 56,000 barrels of oil equivalent (boe) during the month of September, consisting of 184,000 Mcf of gas, 20,000 barrels of natural gas liquids and 5,000 barrels of condensate. As of December 31, 2013, net proved reserves associated with these properties were approximately 221 million barrels of oil equivalent (mmboe).
Doug Lawler, Chesapeake’s Chief Executive Officer, commented, “Today’s announcement marks a major step in Chesapeake’s transformation and a dramatic improvement in our financial strength as we seek to maximize value for our shareholders. Earlier this year, we committed to unlocking the significant value inherent in this asset, recognizing the disconnect of its perceived value within our portfolio. It’s important to note that this transaction has no impact on our expected growth profile or on our views around maintaining a disciplined capital program. We expect our full-year production guidance for 2015 to remain in the range of 7-10% growth from 2014 levels adjusted for asset sales. I am very proud of the efforts that our Southern Marcellus team and all of our employees have put into building and developing our assets and creating value for our company. We look forward to deploying the proceeds from this significant transaction in ways that will continue to drive even greater shareholder value.”

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Report Examines Complications of Natural Gas as a Bridge Fuel

Natural gas may not be of much use as a “bridge” fuel en route to achieving significant cuts in greenhouse-gas emissions unless its use is accompanied by rigorous policies aimed at curbing emissions – policies that some analysts say should be designed to harness gas as an ally of renewable-energy sources, rather that as a competitor. 
That is the implication of a new study analyzing the effect of globally abundant natural gas on competing energy sources and on greenhouse-gas emissions. The global abundance would result from the use of techniques such as hydraulic fracturing to tap so-called “unconventional” sources of natural gas worldwide. 
Assuming that no new climate policies are adopted beyond those that are in place today and that market forces continue to determine the price of gas, an international team of researchers found that gas would replace coal – a help in curbing the emission of greenhouse gases, since natural gas releases about half the carbon dioxide coal does per unit of energy produced.
You can read more of that article by clicking here.

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Anti-Drilling Activist Evasive When Questioned by FrackNation Producer, Then Attacks Him in Blog Post

Phelim McAleer, who directed and produced FrackNation, recently attempted to question former mayor of Dish, Texas Calvin Tillman, who is a prominent anti-drilling activist, about a study that he had commissioned a few years ago.  It's all explained in this video.

Although Tillman chose not to engage the discussion further with McAleer in the video above, he did choose to issue an angry response via his blog.
It finally happened on July 25, 2014 - I was doing a presentation in Santa Maria, CA, when the creepiest side of the oil and gas industry showed up at a presentation I was giving at the local library. This was of course the ethically challenged documentary film makerPhelim McAleer. Mr. McAleer did the false and misleading propaganda documentary Fracknation which was funded by the oil and gas industry. This film was funded to counter the award winning Gasland documentary, which showed the downside of oil and gas operations.

He has been harassing other people who have people who have been critical and outspoken of the practices of the oil and gas industry. However, Mr. McAleer represents a sick and distorted section of the population. This is the section of the population that is willing to lie and mislead and insights violence against those who disagree with his feeble thoughts. Although, it is clear that he has only a very limited number of supporters, those who do follow him are either unable or unwilling to have an independent thought on their own, which makes them particularly dangerous because they blindly follow his lies, and attack those he attacks.

For years now, I have questioned Mr. McAleer's true motivations, and if you watch how he does his "interviews", you will see that he is not a legitimate journalist, but rather a drive by journalist who attempts to put words in your mouth and have you agree with them. He continues to ask the same question over and over hoping that you will say something that he can take out of context and use against you. If that does not work, he will just make up something and start saying that you said it. When you politely move away from him, he gets very pushy to the point of bordering on physically touching his foes. In this particular instance Mr. McAleer was pushing elderly women out of his way to get to me. Rather than attempt to perform a legitimate interview, he pushes it to the point that it becomes an attack. He then chases you down until it borders stalking and becomes creepy. He acts as though it is your fault that he makes industry funded movies that nobody wants to watch.

I knew this, but to this point it appeared to me that McAleer had went out of his way to avoid me, and I still believe his is afraid to have an honest debate with me. Therefore, I did not back away from him when he approached me and legitimately attempted to have an honest discussion with him. However, it quickly became clear that Mr. McAleer was not there to have an honest discussion, but rather more baseless attacks and shouting lies that are meant to spread more of his vile and misleading misinformation.

Since first daring to speak out about the business practices, I have been attacked by the oil and gas industry hacks. However, one particular sick and twisted thing Mr. McAleer does is try to get a reaction by attacking my children. He appears to have no moral compass that guides him through his interviews. It is no secret that my family moved from DISH out of concerns for our children's health. Mr. McAleer uses this point to attack my children and will go as far as accusing me of telling people that my children have leukemia, which is a complete and fabricated lie, not to mention a very sickening thing for someone to say. Unfortunately, I simply do not have patience for those who attack my family. Mr. McAleer does not have children, which is likely his greatest gift to society, and therefore can not understand the emotions of having a child and wanting to protect them from harm.
Just another day in the fight over fracking.

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