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Tuesday, August 15, 2017

Links of the Day: More 2nd Quarter Updates, Lordstown Plant Supported by Community, and More

Seeking Alpha:  Gulfport Energy's (GPOR) CEO Mike Moore on Q2 2017 Results - Earnings Call Transcript   -   "On the operations front, in the Utica the team delivered solid results experiencing significant efficiencies at the drill bit and exceeding numerous previous records set in the field. During the second quarter, we spud 28 gross wells utilizing six operated rigs. The well released during the second quarter had an average drilled lateral length of approximately 8,409 feet, up 3% over the first quarter and 12%..."

Seeking Alpha:  Rex Energy's (REXX) CEO Tom Stabley on Q2 2017 Results - Earnings Call Transcript   -   "Staying on the topic of liquidity, during the second quarter we closed on an agreement for the sale of our Salineville waterline in Warrior North Keystone Clearwater Services. The sale was for approximately $7 million in cash and an additional $1 million of water transfer work on upcoming pads in..."

Cleveland.com:  Legal Efforts to Stop Gas Pipeline Dealt Blow by Magistrate   -   "A federal magistrate in Akron has dealt a significant blow to efforts by some Ohio property owners to stop a high-pressure natural gas pipeline from being built. U.S. Magistrate Kathleen Burke in a written recommendation filed Monday said the U.S. District Court in northern Ohio lacks jurisdiction to consider..."

Youngstown Vindicator:  State Board Hears Support for 2nd Clean-Energy Plant in Lordstown   -   "Bill Siderewicz, president of Clean Energy Future, the company asking the Ohio Power Siting Board to approve construction of a second gas-fired power plant at the Lordstown Industrial Park, touted the project at a hearing Thursday in Columbus. Siderewicz said he and an electrician from Lordstown who works on the first Lordstown Energy Center plant both spoke in favor..."

Sentinel-Tribune:  BG Charter Amendment to Ban Fossil Fuel Infrastructure in Flux for November Ballot   -   "There are questions about whether a proposed charter amendment that seeks to ban certain new fossil fuel infrastructure from city of Bowling Green property will appear on the November ballot. Terry Burton, a director with the Ohio Board of Elections, said the issue will be..."

WKSU:  Canton Says Water is Safe, Despite Discoloration   -   "Canton water officials are assuring residents that water coming out of their tap is safe to drink, despite any discoloration. The city reduced the amount of water it was pumping from its Sugarcreek wellfield following a spill of drilling mud in April from nearby construction on the Rover..."

Reuters:  U.S. Shale Breakeven Price Revealed Around $50   -   "U.S. shale producers need a WTI oil price around $50 per barrel to break even, according to an analysis of financial statements for the second quarter. Fifteen of the largest shale oil and gas producers reported total net losses of $470 million for the three months between April and June when benchmark WTI prices averaged..."

The Times Leader:  Monroe Chamber Prepares for Economic Growth   -   "Monroe County business leaders and government officials are counting on an upswing in the local economy, mostly due to activity in the oil and natural gas industry. Barbara Carslund of the Monroe County Chamber of Commerce said she is optimistic that jobs and industry are on their way to the county, and her organization is helping to pave the way for..."


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Monday, August 14, 2017

Utica Shale Counties Show Highest Income Growth in Ohio

by Jackie Stewart, Energy in Depth

Columbus Business First just released tax data showing that Utica Shale producing counties have the highest income growth in Ohio. And guess which county in Ohio has the highest income growth? Monroe County, home of the best natural gas producing wells in the state. The new report highlights similar reports over the past few years showing a correlation between oil and natural gas drilling and production with and the personal income growth of residents who live and work in those counties.
The report found that from 2010 to 2015 tax filers in Monroe County reported more than $200,000 in adjusted gross income, representing a staggering 855 percent jump. In fact the top six high-income growth counties are all squarely located in the core of Utica Shale development.  Recall that it was only four years ago that the Akron Beacon Journal reported, “Shale has produced 630 new millionaires in two Ohio counties.”

Source: Columbus Business First

Source: Columbus Business First
The top six counties reporting the highest number of $200,000-plus tax filers were Monroe, Noble, Harrison, Carroll, Belmont and Guernsey. In terms of permits and overall statewide production of natural gas, Carroll County still leads the pack with the most 525 and highest overall statewide production of natural gas, and Belmont County has the second highest number of permits (488), with Harrison (391), Noble (213), Monroe (342), and Guernsey (203) rounding out the top six natural gas producing counties. So, there appears to be a direct connection between drilling and production and personal income for residents in those counties.
As Columbus Business First reported, “That’s not a typo.”
Another piece of evidence linking natural gas production to income growth is the reality that these same counties have realized tremendous tax revenues, thanks to property taxes paid by operators on production of oil and gas. As EID reported earlier this year, eastern Ohio has realized over $45 million, with Monroe County realizing a 340 percent increase in tax revenue.
Still not convinced? Also this week, WTOV 9 reported major upgrades to Switzerland Local Schools in Monroe County, stating,
“Each high school is participating in a campus improvement project thanks to the school board and oil and gas money.”
This is all very good news and it highlights how vital oil and natural gas development has been for Appalachia, which traditionally has included some of the poorest counties in the state.

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Youngstown Fracking Ban May Be Blocked From Seventh Time on Ballot

From the Youngstown Vindicator:
An anti-fracking charter amendment could be kept off the city’s Nov. 7 ballot by the Mahoning County Board of Elections because of a conflict with state law. 
Gov. John Kasich signed a bill in January – effective April 6 – that included an amendment giving more discretion to county boards of elections to invalidate local charter proposals that conflict with state law and/or the state constitution. 
The anti-fracking proposal, rejected six previous times by city voters, would require the city to ban hydraulic fracturing and any activity related to it including “the depositing, storage, treatment, injection, disposal, transport or processing of wastewater.” 
However, state law gives jurisdiction over fracking to the Ohio Department of Natural Resources. 
When the Ohio Senate approved the measure in December, state Sen. Kevin Bacon of Minerva Park, R-3rd, specifically mentioned the Youngstown anti-fracking proposal as a main reason to include the amendment in a bill that was designed to revise foreclosure laws, according to media reports. 
Mark Munroe, Mahoning elections chairman, said the board may be compelled to take action against the anti-fracking proposal.
Click here to read the rest of the article.

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ETP Earnings Call Provides Update on Rover Pipeline

From Seeking Alpha's transcript of Energy Transfer Partner's second quarter earnings call:
As to Rover, construction of Phase 1 is substantially complete with 100% cleared and graded and the pipes strong, welded and lowered in. We expect to be finished with the construction of Phase 1a from Cadiz to Defiance by next week and plan to immediately ask for permission to bring Phase 1a in service. On Phase 1b from Seneca to Cadiz, once we receive approval from FERC to drill under Captina Creek, we believe we will have it drilled and completed in approximately 40 days, at which point we will request FERC permission to bring this segment into service. When approved, all of Phase 1 will be in service. We are waiting on approval from FERC to resume drilling the HDDs. In the meantime, we continue construction on all phases of the pipeline except the HDDs. Assuming quick resolution by FERC regarding Phase 2, we expect to be in service by the end of November or early December with full commercial service in January. On our Revolution project, construction is scheduled to be completed in the fourth quarter of 2017.
View the entire transcript by clicking here.

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Thursday, August 10, 2017

OOGA Holds Annual Meeting in Zanesville

From WHIZ News:
The two-day meeting was a chance for more than 300 operators, suppliers, contractors and industry affiliates to get together for fun and professional development. 
Shawn Bennett, OOGA Executive Vice President, said the oil and gas industry is the third most important industry in the state of Ohio. 
“So not only do we bring energy, we provide well-paying jobs as well as royalties to land owners across the state,” said Bennett. “When you look at this industry in the state of Ohio, while it’s largely unnoticed from people outside of the oil and gas producing region it provides significant benefits for all Ohioans.” 
Bennett said the industry has seen a downturn in previous years, but that trend is expected to change.




View the original article by clicking here.

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Driller Turns Tables by Suing Landowners in Dimock, PA

From Natural Gas Now:
I have joyous news for all our readers. Cabot Oil & Gas has fired a shot against the seedy trial lawyers and even seedier hustlers trying to earn fame and money with jugs of brown water and filthy accusations surrounding Dimock. Cabot has filed a lawsuit against pig farm suer Charlie Speer, his Luzerne County trial lawyer associates and Ray Kemble, the Dimock junkyard plaintiff fractivists have descended to using as an example despite his complete lack of credibility on virtually anything. 
It’s a $5 million lawsuit enjoyable to read for entertainment but, more than that and the obvious quest for justice, this is a glorious opportunity to expose some of the special interests behind fractivism. Discovery is going to be a nightmare for Speer, Kemble and allies. 
The lawsuit may be found here and I’ve highlighted the important parts. Here are some of the basics (emphasis added): 
  • Prior to 2012, Defendant Speer, a pig farm nuisance lawyer from Missouri, routinely filed suits against those in the agricultural industry based on alleged damages from odors and other purported nuisances.
  • After Missouri enacted legislation at the end of 2011 that put an end to Speer’s pig farm lawsuits, Speer set his sights on Pennsylvania and switched his focus from pigs to rigs.
  • In the process, Speer and Speer Law teamed up Ciarimboli, Boylan, and F & C to commence nuisance claim lawsuits against natural gas operators in Pennsylvania.
  • One of their new Pennsylvania clients, Kemble, had sued Cabot and GDS in 2009 and settled his claims in 2012.
  • Following the 2012 settlement agreement, Kemble spent the next five years breaching its terms.
Click here to read the whole article. 

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What Does FERC Quorum Mean for Appalachian Basin?

From BTU Analytics:
While electricity rate cases will most likely be the bulk of the commission’s backlog, a few important Appalachian pipe projects are in there as well, notably Nexus and PennEast, both of which have missed their scheduled certificate approval dates (which were due in February and July, respectively) as a result of the lack of a FERC quorum. In February 2017 when there was a push by FERC to approve projects prior to losing its quorum, both Rover and Atlantic Sunrise received their approval, while NEXUS’ decision was left out. This was based on FERC’s methodology of addressing projects by their original application date. Now with FERC’s quorum restored, there is no reason to think it will be delayed much longer. 
Atlantic Coast Pipeline and Mountain Valley are both scheduled to receive their certificate approval at the end of September. FERC should be in full swing of things by then, however any ramifications due to the backlog of approvals would put this timing at risk. 
Nevertheless, even with an approval, the path forward for all the projects above will still be bumpy as they all face obstacles beyond a FERC approval. NEXUS is facing limited commercial support with only two-thirds of its capacity subscribed, leaving it the only major greenfield in the Northeast not fully subscribed. In addition, TransCanada Mainline’s recently discounted tariff rates will make the MichCon/Dawn market even more competitive, hurting shippers’ netbacks on NEXUS.
You can read the whole article by clicking here.

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Pipeline Problems Promulgated as Rover Rankles Roger

The laundry list of problems that have occurred in connection with construction of the Rover pipeline are hardly a secret.  Spills, destruction of a home that was under consideration for registry as a historic landmark, and upsetting farmers by pumping rainwater out of trenches into fields have been a few of the stories that have marked the months since Energy Transfer Partners began working in earnest on the pipeline.

Now an article from Oil & Gas is highlighting more of the reasons that local residents are upset with ETP, as even those that fought to carefully craft their agreements with the company are finding that they have a new fight on their hands as the company rushes to complete the project.  An excerpt:
After the Rover Pipeline was announced and Roger Meggyesy learned it would bisect farmland he owns, he expressed concerns about maintaining the quality of the topsoil and proper mitigation programs to restore productivity. 
That was in 2015. Fast-forward to 2017, and Meggyesy’s fears have not been allayed, which prompted him to request a roadside meeting with a pipeline monitor and environmental inspectors. 
“We worked to get good easements and good language (in the contract), but once construction started, everyone seemed to forget,” Meggyesy told Gary Anderson, a third-party pipeline inspector who submits his reports to the Federal Energy Regulatory Commission; Damon McCarthy, who deals with right-of-way issues on the project; and inspectors from Land Stewards, including Wendell Swartzentruber, who monitors the work to minimize environmental impacts. 
Joining the makeshift meeting on the side of the road at the intersection of Blachleyville and Firestone roads were Lindsay Shoup, organizational director for the Wayne County Farm Bureau; Roger Baker, a farmer and state trustee for the Ohio Farm Bureau; and Rod Scheibe, a dairy farmer who rents land from Meggyesy. 
Because Meggyesy uses a wheelchair to get around, he sat in his vehicle the whole time. However, he had a perfect vantage point from which he could point out compliance problems. He told the group to look at his property and notice how truck tracks were present at the corner.
Read the whole article by clicking here.

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Antero Resources Continuing Utica Shale Development

From Seeking Alpha's transcript of Antero Resources' second quarter earnings call:
Holly Stewart 
Okay and then maybe, final one for me. Since you hit on Rover, the delays. I know you guys have kind of shifted some activity back to the Utica in preparation for that project coming online has this delay impacted any thoughts on kind of the development schedule? 
Paul Rady 
Not really, those Utica wells and pads are being drilled down, so we're timing the completion to dovetail with Rover Phase 1 as it arrives at Seneca, our latest estimate and obviously we're in contact with both energy transfer on the Rover project as well as with regulatory people on the other side and do see that the project is moving forward. We expect Rover Phase 1 to get to Seneca in September, October and so we'll time the completion of our pads there in the Utica to that. And then we would expect Rover Phase 2, it's probably a month or two behind that. So we're thinking October, November for Phase 2 to come to sure would, that certainly will have plenty of production that will be moving through Phase 2 Rover, when it arrives in the third and fourth quarters.
Read the whole transcript by clicking here. 

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ETP Suggests Possibility That Diesel Fuel in Spilled Drilling Mud May Have Been Sabotage

From Reuters:
Energy Transfer Partners LP said on Friday sabotage or an accident might have caused diesel to get into drilling fluid that spilled into an Ohio wetland during construction of its Rover natural gas pipeline, but opponents of the project disagreed with the sabotage theory. 
U.S. energy regulators banned ETP from new horizontal directional drilling in May until the company explains how diesel, prohibited under its permit, got into 2 million gallons of drilling fluid that spilled into the Tuscarawas River wetland. 
Environmental agencies are probing whether ETP's contractor may have used diesel to lubricate the drill to make it easier to cut through rock when crossing large obstacles like highways and rivers. 
ETP said it did not believe the contractor used diesel. 
"Rover theorizes that these diesel concentrations could have been caused by an inadvertent and unreported spill or leak from equipment operating during the clean-up, or it could have been the deliberate or malicious act of individuals opposed to the project," the company told FERC in a filing Friday, noting the data was inconclusive.
Click right here to read more.

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Wednesday, August 9, 2017

ODNR Releases August 2017 Utica and Marcellus Shale Activity Maps




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Rig Count Drops in Utica; Number of Producing Wells Increases by 23


New permits issued last week: 6  (Previous week: 24-18
Total horizontal permits issued: 2572  (Previous week: 2566+6
Total horizontal wells drilled: 2076  (Previous week: 2063+13
Total horizontal wells producing: 1613  (Previous week: 1590+23
Utica rig count: 21  (Previous week: 27)  -6

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Chesapeake Energy to Cut Rig Count

From Reuters:
U.S. natural gas producer Chesapeake Energy Corp beat quarterly profit estimates, but said it planned to cut its rig count and bring fewer wells into production this year. 
The company, which operates in the Eagle Ford Shale in South Texas, the Utica Shale in Ohio and the Anadarko Basin in northwestern Oklahoma among others, said it would run 14 rigs by the end of 2017, down from 18 rigs now. 
"We suspect Chesapeake may cut back activity in the relatively gassy North Eastern Appalachia, Haynesville and (to a lesser extent) Midcontinent regions," Barclays analysts wrote in a note. 
Last month, oilfield services provider Halliburton Co warned growth in North American rig count was "showing signs of plateauing".
Click here to read the entire article.

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Pin Oak Energy Partners Announces Acquisition of Oil and Gas Assets in Ohio and Pennsylvania

AKRON, Ohio--()--Pin Oak Energy Partners LLC (Company or Pin Oak Energy) announces that it has closed on a transaction with an undisclosed seller to acquire oil and gas assets in Trumbull, Tuscarawas and Mahoning Counties in Ohio and Mercer, Crawford and Venango Counties in Pennsylvania.
“This acquisition adds to our base of producing unconventional assets in the Appalachian Basin and allows Pin Oak to capitalize on operational efficiencies when combined with our existing producing assets. In addition, this transaction provides a foundation for continued build-out of midstream assets across the northern portion of the Utica/Point Pleasant development,” says Christopher Halvorson, CEO of Pin Oak Energy.
The assets include 10 producing Utica/Point Pleasant wells with current daily production of 2.2 MMcfe/d (25% liquids); three drilled and completed wells waiting on pipeline (WOPLs); 22 miles of midstream gathering pipeline infrastructure (including pipeline rights-of-way awaiting pipeline installation) with eight interconnect locations; 5-acre field office with yard in Hermitage, PA; and 283 leases covering more than 7,700 acres.
Pin Oak Energy's Chief Operating Officer, John G. Corp, stated, “This acquisition fits with Pin Oak Energy’s expertise of operating unconventional assets with 3-phase production [oil, natural gas and natural gas liquids] and further solidifies an operating base in the northern portion of Ohio’s Utica play.”
About Pin Oak Energy
Pin Oak Energy Partners LLC is an Appalachian Basin energy company engaged in the exploration and production of conventional and unconventional oil and natural gas wells and the operation of associated assets. The Company currently operates 363 wells producing nearly 5.7 MMcfe/d (32% liquids) across more than 32,000 acres and is also involved in midstream, field services and operations through its affiliate companies. Visit Pin Oak Energy at www.pinoakep.com

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Eclipse Resources Continues to Move Forward in the Utica Shale

From Seeking Alpha's transcript of Eclipse Resources' second quarter earnings call:
Eclipse is constantly striving to become more efficient and innovative in order to improve our well results. We have demonstrated that we lead the play and arguably lead all plays in terms of lateral length, and have been consistently the lowest cost producer in the core of Utica in terms of D&C cost per foot of lateral. 
Over the course of this year, we are also focusing on ways to reduce our cycle times and have continued to improve our operating pace, drilling our fastest well to date in approximately 12 days from spud to TD. Amazingly, this well was also a super-lateral [indiscernible] 15,600 foot lateral and 24,600 foot total measured depth. 
We continue to move forward with our Stacked Pay Stalder pad in Monroe County where we have drilled two condensate-rich Marcellus wells with an average lateral length of approximately 9,200 feet and three dry gas Utica wells which include our longest dry gas well drilled to date with a lateral of 14,400 feet. We will begin completing this pad in the fourth quarter and if the Marcellus wells perform as anticipated, this Marcellus condensate area acreage could generate returns consistent with our best Utica acreage, and includes over 70 risked 10,000 foot lateral locations that we would then develop in conjunction with our Dry Gas Utica position in this area of Ohio.

With our Gen-3 completion technique, we believe we are continuing to observe higher fracture conductivity and stimulated reservoir volumes, which we believe have increased by approximately 44% as compared to our Gen-1 wells in the Utica Condensate area. In our Utica Dry Gas acreage, we believe our normalized fracture area, which measures the effectiveness of our completion design, has increased by approximately 78% as compared to our Gen-1 completions.
Click here to read the entire transcript.

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Rice Energy Positive on 2nd Quarter Earnings Call; Investor Sues to Block Merger with EQT

From Seeking Alpha's transcript of Rice Energy's second quarter earnings call:
To summarize the quarter, we turned all of our planned operated Marcellus and Utica wells to sales on or ahead of schedule and under budget. We reduced our operating costs and we've managed to lower our well costs in an inflationary service cost environment. 
Starting with our Ohio Utica position in Belmont, during the quarter, we turned to sales 11 gross operated Utica wells with an average lateral length of 10,500 feet and average development cost of $1,105 per foot, which is 11% better than budget. Our Utica team has proven they are not done driving down cost. 
Of note, in the first half of the year, we modified our drilling assembly, which resulted in a step-change improvement in cycle times. This new bottomhole assembly included a newly designed PDC bit and a larger, more powerful motor used in conjunction with the rotary steerable system. Using this new BHA, we established a new Rice Utica drilling record in the quarter by drilling a 13,700-foot lateral, our longest lateral to-date, which took only five days from kickoff point to total depth.
Click here to read the whole transcript.

In other Rice Energy news, there is this from the Delaware Business Court Insider:
An investor in Rice Energy Inc. on Wednesday sued in Delaware federal court to halt the oil and gas driller's planned $6.7 billion sale to EQT Corp., saying shareholders do not have enough information to vote on a deal that would create one of the top shale energy producers in Western Pennsylvania. 
In the proposed class action, Patrick Gordon accused Rice of misleading stockholders last month in a filing with the U.S. Securities and Exchange Commission related to the stock-and-cash merger. The filing, he said, lacked important details regarding the company’s financial projections and the valuation analyses its financial adviser, Barclays Capital Inc., used in crafting its fairness opinion. 
The deal, announced June 19, would expand EQT’s acreage in Pennsylvania’s Washington and Greene counties, where the companies have vied for drilling dominance. In exchange, Rice investors would receive $27.04 in cash and stock for each share they held in the Canonsburg, Pennsylvania-based producer.
Read more about that by clicking here. 

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Tuesday, August 8, 2017

Earthworks Parachutes Into Ohio from California, Local Elected Leaders Sound Off

by Jackie Stewart, Energy in Depth

In a classic case of irony, out-of-state group Earthworks sent a campaign organizer 2,569 miles (no doubt using oil and gas) to Marietta, Ohio, last week to rally a whopping 15 anti-fracking activist for the “huge” anti-fracking Ohio River Rising Rally & March. As EID has highlighted, out-of-state fringe environmental activist are desperately trying anything they can to rally Ohioans to oppose oil and gas development, yet each time they are failing miserably. Local elected leaders have had just about enough of out-of-state and out-of-touch activist coming to Ohio to tell them what to do, as Washington County Commissioner and Marietta resident Ron Feathers told EID,
“We don’t need these national groups coming in from out of state, traveling 2,500 miles to try to dictate how we manage our natural resources in Ohio. They have no vested interest here. They are not paying taxes, and they are not supporting our schools or local fire department. I don’t tell people in California how to eat and they shouldn’t be telling me how to use our minerals.”
Ethan Buckner, professional staff and energy campaigner for Earthworks, said to a crowd of 15 in Marietta on July 29: “I’m from Oakland, California and happy to be here.” To put into perspective just how far Buckner traveled (using fossil fuels, of course) take a look at this map:
Earthworks — one of the most aggressive “ban fracking” groups nationwide — posted this picture on social media without any mention to the fact that those holding signs and highlighted in the photo were the only attendees.
However, much to their dismay, the people who actually live and work in Ohio are wise to their shenanigans, as evidence by the fact that they could only muster 15 people attending their “huge” rally. Monroe County Commissioner Mick Schumacher echoed Commissioner Feather’s statement and told EID,
“We know that national groups have been behind these so-called action camps to ban fracking in the Wayne National Forest and the small percentage of people from Ohio who joined them have come into our county from Athens, which is ironic considering Athens County will receive money from leasing of minerals in our county.”
Commissioner Schumacher is referencing how Athens County receives a cut of the Wayne National Forest sale proceeds taking place in his county. Areas such as Monroe County have dealt with these funding shortfalls for a very long time, which is why there was broad bipartisan support for leasing of federal minerals throughout the extensive review to lease in the Wayne. Washington County also strongly supported leasing the Wayne as well — and it’s now obvious why, as counties in Appalachia have received hundreds of thousands from just one Wayne minerals auction.
Regardless of how much money and influence out-of-state and out-of-touch groups try to impose on Ohians, the people who actually live and work here have become wise to their antics, as this latest anti-fracking disappointment in Marietta clearly demonstrates.

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Monday, August 7, 2017

Next BLM Wayne National Forest Lease Sale Set for September

by Jackie Stewart, Energy in Depth

The Bureau of Land Management (BLM) has announced it plans to lease another 141 acres of the Wayne National Forest (WNF) in prolific natural gas producing Monroe County on Sept. 21. The scheduled sale comes five years after the Expression of Interest (EOI) to lease the minerals for development began in 2012, which was followed by years of environmental reviews prior to approval from the federal agency to move forward with leasing.
The Center for Biological Diversity (CBD), an extremist “multimillion dollar litigation factory,”  quickly protested the upcoming sale using the same debunked talking points that have been addressed again and again during the extensive environmental assessment that was conducted by the BLM. The most recent protest is certainly nothing new, as the out-of-touch extremist group has unsuccessfully protested every successful WNF lease sale to date. Previous sales have yielded nearly $7 million in federal mineral lease auction sales of acreage in the Wayne, of which the state of Ohio will receive 25 percent of the sales. Funding received from the first two sales have been a lifesaver to local schools in Appalachia, as their budgets would have realized extreme cuts in funding if not for this revenue generated by fracking.
Along with CBD, and a handful of other environmental groups — such as the Sierra Club, Athens County Fracking Action Network, Buckeye Environmental Network/Buckeye Forest Council and Heartwood — have recycled a litany of issues raised repeatedly over the past five years. The CBD’s most recent tired arguments are essentially carbon copies of the same issues raised in its recent lawsuit against the BLM and USFS in federal court, which was designed to impose a de facto moratorium on fracking in the Wayne National Forest from the bench.
Of course, in Ohio, developing shale while preserving and protecting our forests, state and federal lands is not new. Fracking has proven to be a win-win for the environment and the economy, with a prime example being the Muskingum Watershed Conservancy District (MWCD), where fracking has brought more than $200 million in mineral lease and royalty revenue to the district since 2011. A direct result of leases signed with Utica Shale developers in the eastern portion of the district, the revenue has been used to improve the watershed of this political subdivision of the State of Ohio, proving that conservation and shale development can work hand-in-hand. The WNF is certainly another example of this story, as the initial stages of shale development has come just in time to help offset significant federal funding cuts to schools and infrastructure throughout the Appalachian region of Ohio.

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Senate Confirmations Kick FERC Back Into Gear

From The Hill:
The Senate voted Thursday evening to confirm two of President Trump's nominees to the Federal Energy Regulatory Commission (FERC), paving the way for the commission to have its first quorum in six months. 
Neil Chatterjee and Robert Powelson were confirmed by unanimous consent and are slated to join the five-member board, which has seen its action paused since February following a pair of retirements. 
FERC is responsible for permitting decisions on energy projects like natural gas pipelines and export terminals. The lack of a quorum has left FERC unable to move such projects forward, inaction that has led to frustration in the energy, manufacturing and business communities. 
Neither Chatterjee nor Powelson was considered a controversial pick. Chatterjee is an energy aide to Senate Majority Leader Mitch McConnell (R-Ky.), and Powelson is a Pennsylvania utilities regulator. 
The Senate Energy and Natural Resources Committee advanced both nominations in June on 20-3 votes. Democrats, though, had been hesitant to bring their nominations to the floor for confirmation votes until they were assured a Democratic nominee would receive a vote as well.
Click here to read more.

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Thursday, August 3, 2017

08/03/17 Links of the Day: Rover Pipeline Problems, Cracker Plant Boosts Demand for Welders, and More

Marietta Times:  Oil, Gas Panel Full of Vacancies   -   "Residents living within or near the boundaries of property owned by the state of Ohio may not see any of their land or minerals being developed any time soon due to the Oil and Gas Leasing Commission having all..."

Seeking Alpha:  CONSOL Energy Q2 2017 Results - Earnings Call Transcript   -   "If you recall, last quarter we stated that we expected to turn in line three pads, one Marcellus and two Monroe County dry Utica pads. One of the delayed dry Utica pads was due to a fishing operation related to frac plug drill out which delayed the turn in line by..."

Ashland Times-Gazette:  Rover Pipeline Contractor Kept Incomplete Records   -   "The reason 2 million gallons of drilling slurry leaked during construction of the Rover Pipeline in April is hard to pinpoint because Rover and its drilling contractor kept incomplete records. J.D. Hair & Associates, an engineering firm brought in to study the leak, reached the conclusion in a report released Monday by the..."

Bloomberg:  Billionaire Behind the Dakota Access is "Baffled" by Complaints About His New Pipeline   -   "Billionaire pipeline magnate Kelcy Warren, who just months ago defeated environmentalists to finish his controversial Dakota Access oil pipeline, has stepped into the limelight once again -- this time, to defend a natural gas line..."

The Hill:  Court Tells EPA to Enforce Obama Methane Pollution Rule   -   "A federal court told the Environmental Protection Agency (EPA) Monday that it has to enforce an Obama administration methane pollution rule. The order from Court of Appeals for the District of Columbia Circuit came after the judges gave the agency a two-week reprieve from its ruling earlier in July that..."

Gas & Oil:  Ohio Supreme Court Rules in Oil & Gas Lease Interpretation Case   -   "In yet another case in a long series of rulings brought about by Ohio’s shale boom, the Supreme Court of Ohio has interpreted the terms of a certain oil and gas lease in favor of the producer and against the landowner. This case that should be a wake-up call to all landowners about the importance of having oil and gas leases carefully..."

WKSU:  Analysts, Investors and Local Landowners Look for Signs of a Revival of the Shale Boom   -   "Speculation is continuing among analysts and in trade publications that eastern Ohio’s Utica Shale play may be firing up again. July numbers for things like drilling rig count and infrastructure investment are expected to be up..."

Gas & Oil:  Ohio Court of Appeals Clarifies Production in Paying Quantities Rule   -   "On June 16, 2017, Ohio’s Seventh District Court of Appeals issued an important “paying quantities” decision against Beck Energy that will surely shape the future of many “lack of production” cases in Ohio. In Paulus v. Beck Energy Corp. 2017-Ohio-5716, the Court of Appeals, among other things, clarified..."

TribLIVE:  Beaver County's Shell Cracker Plant Project Boosts Demand for Local Welders   -   "An anticipated shortage of local welders to help build a multi-billion ethane cracker plant in Beaver County has led the Steamfitters Local 449 to step up recruitment efforts for apprentices. The union, which represents about 2,700 workers in 16 counties across..."

Reuters:  Scientists Turn to Big Data in Hunt for Minerals, Oil and Gas   -   "Scientists searching for everything from oil and gas to copper and gold are adopting techniques used by companies such as Netflix or Amazon to sift through vast amounts of data, a study showed on Tuesday. The method has already helped to discover 10 carbon-bearing minerals and could be widely applied to exploration, they wrote in the journal..."

Rigzone:  BP Sees Oil Prices Below $55 a Barrel in 2018   -   "BP expects global oil prices to hold within a range of $45-$55 a barrel next year as U.S. shale production grows, the British company's chief financial officer said on Tuesday. After a slow start to the year, global oil demand recovered in the second quarter of 2017 and was expected to grow by..."


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Marietta Professor: Pipeline Opponents Endanger American Energy Supply

From Cleveland.com, here is a portion of an op-ed by Marietta College professor Robert W. Chase:
Construction of natural gas pipelines in the eastern United States is running up against fierce local opposition. It's a helmet-to-helmet environmental dispute like no other and it could stall the shale revolution and pose a greater danger to America's energy supply than anything that could come from OPEC or Vladimir Putin. 
The reality is that almost nobody likes or appreciates natural gas pipelines. Let's simply note that everyday life wouldn't be the same without the gas that these pipelines carry for electricity generation, home heating and cooking, and industrial production. And there is little question that demand for natural gas is rising. Witness the retirement of aging coal and nuclear plants in favor of those that burn low-cost, clean natural gas. 
Without improvements in the natural gas infrastructure, experts say that half of the nation's economy from the Northeast to the Midwest will be under severe stress. Without adequate gas supplies, energy-intensive industries would be unable to remain open and the electrical-power-generating industry would suffer significantly. Thousands of working people could lose their jobs. Local economies, especially here in Appalachia, would suffer. 
These simple but glaringly obvious facts seem to be ignored by those who object to new pipelines that would carry gas from the Marcellus and Utica shales to New York state and New England or to markets in the South and Midwest. Impeding pipeline construction, no matter the consequences, just does not make sense.
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MPLX Sees Utica Decline, Marcellus on the Rise

From Seeking Alpha's transcript of MPLX's 2nd-quarter earnings call:
Great to hear. And thank you for that. And just as my follow-up, I want to pivot towards the processing volumes in the northeast. It seems like Marcellus came in pretty strong, but it looks like Utica declined a bit there. It's weaker than what we were expecting. Seneca kind of dipped down here. And I was just wondering if you could provide more color on some of the drivers there? 
Mike Hennigan 
Yes, first off on the Marcellus, you hit it on the head, very bullish. Our Sherwood Complex was full in the quarter as we expected. Sherwood VIII is ramping up pretty rapidly. We expect that to be coming on into a full mode pretty soon. So overall, very bullish about what's happening there. 
But you're right also, we had some declines in the Utica area. Overall, there's a couple of dynamics occurring there. One is some of the activity is related towards the dry gas area getting ready for Rover's start-up for when that comes online. But overall, there's also been some shifting from dry to wet. And you hit it on the head, Utica's down a little bit, Marcellus up a little bit. But we're pretty bullish about Marcellus going forward.
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Undermanned FERC Faces Backlog of Pipeline Projects Awaiting Approval

From Bloomberg:
The backlog of natural gas pipelines awaiting Federal Energy Regulatory Commission approval is piling up as the agency enters its sixth month without enough members to approve $14 billion worth of infrastructure projects, and gas suppliers and pipeline companies could face longer-term impacts. 
Those awaiting approval include the proposed $5.5 billion Atlantic Coast Pipeline, owned by Dominion Energy and other partners, and the $2.1 billion Nexus pipeline, a joint project from DTE Energy Co. and an Enbridge subsidiary. 
“The situation is manageable for the time being, but just barely, because we are a few months away from major delays, which would be disruptive to the construction of pipelines and gas producers,” James Lucier, managing director of Capital Alpha Partners LLC, a policy research firm that follows energy investments, told Bloomberg BNA. 
“If we don’t have a quorum by September, we definitely need to worry,” he said.
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EQT Turns a Profit After Suspending Utica Shale Drilling

From The State Journal:
EQT drilled 66 wells in the second quarter, with 43 of those in the Marcellus Shale and 43 in the Upper Devonian Shale. In anticipation of the merger with Rice Energy, EQT suspended its Utica Shale test program as improved returns on Marcellus wells resulting from longer laterals made possible by the Rice acquisition are higher than the return expected on the average Utica well. EQT’s 2017 sales volume guidance was reduced by 10 billion cubic feet equivalent to 15 Bcfe as a result of the suspension of the Utica test program. 
Utica wells are more expensive to drill than Marcellus wells, as the Utica Shale is deeper. EQT had been testing various technologies to bring down the cost of Utica wells to where they would be competitive with Marcellus wells. Rice has Utica wells in Ohio. 
EQT announced in June that it had reached an agreement to acquire Rice in a $6.7 billion deal that would make it the largest natural gas producer in the United States and triple EQT’s pipeline capacity to the Gulf. 
EQT would acquire 187,000 acres of Marcellus Shale from Rice in Pennsylvania. It would also acquire 64,000 acres of Upper Devonian Shale in Pennsylvania, 105,000 acres of Utica Shale in Pennsylvania and 65,000 Utica Shale acres in Ohio. Rice has no acreage under its control in West Virginia.
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How Will Recent Pipeline Issues Impact the Future for ETP?

From The Motley Fool:
Energy Transfer Partners(NYSE:ETP) has had its share of difficulties over the past year. The headliner was the problems it faced in building the Dakota Access Pipeline, which endured several months of setbacks due to protests that caused a delay in getting a key permit. While that project finally entered service last month, the issues with that pipeline haven't gone away. 
Unfortunately, those nagging issues aren't the only problems facing the company. Just this week, two more of its pipeline construction projects came to a halt. Not only could these new roadblocks delay the in-service date of these key projects, which would have an adverse impact on its cash flow as well as the operations of its customers, but it would further tarnish the company's already sullied reputation. That could haunt Energy Transfer in the future unless it cleans up its act. 
Rover's problems spread to West Virginia 
The largest project Energy Transfer currently has under construction is the $4.2 billion Rover Pipeline that would move natural gas from the Marcellus and Utica shale plays of West Virginia, Pennsylvania, and Ohio to market centers in the Michigan and Ontario. The company initially expected an in-service date of the first phase in July, with full service anticipated by November. 
That said, the company hit a roadblock this spring after 2 million gallons of drilling fluids used in horizontal drilling underneath roads and waterways spilled into wetlands in Ohio. Worse yet, regulators found that the fluids didn't just contain the clay and water mixture that Energy Transfer disclosed, but also had trace amounts of diesel. Because of that, the company hasn't been able to complete any new directional drilling on the project, which has delayed the in-service date of the first phase until late summer.
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Gulfport Energy Hits New Peak in Utica Shale Activity During 2nd Quarter 2017

From NGI:
Gulfport Energy Corp. said Monday the second quarter was its most active in the Utica Shale since entering the play in 2011, after the company turned to sales 26.7 net operated wells. 
Combined with the progress Gulfport made in the South Central Oklahoma Oil Province (SCOOP) during the period, the company again beat Wall Street consensus, reporting 1.038 Bcfe/d of production for the second quarter. The daily production mix consisted of 88% natural gas, 8% natural gas liquids (NGL) and 4% oil. Second quarter production was up 22% from 1Q2017, when the company beat guidance, and 56% from the year-ago period. 
Given its results through the first six months of the year, Gulfport slightly increased the low end of its 2017 production guidance, to 1.065 Bcfe/d from 1.045; the high end was unchanged at 1.1 Bcfe/d. That would imply up to 53% year/year production growth from the 719.8 MMcfe/d the company produced in 2016.
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Wednesday, August 2, 2017

Permitting Takes Big Jump and Rig Count Hits New 2017 High in Utica Shale


New permits issued last week: 24  (Previous week: 0+24
Total horizontal permits issued: 2566  (Previous week: 2552+14
Total horizontal wells drilled: 2063  (Previous week: 2057+6
Total horizontal wells producing: 1590  (Previous week: 1590+-0
Utica rig count: 27  (Previous week: 26)  +1


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