Monday, May 28, 2018

You’re Hired! Ohio Campaigns to Raise Awareness of Shale ‘In Demand’ Jobs

by Jackie Stewart, Energy in Depth
It’s all hands on deck to spread the word that when it comes to jobs, Ohio is hiring — and it’s largely due to the fact that the gross state product is approaching $100 billion thanks largely to shale investments, according to JobsOhio.
The upward trajectory of shale-related employment comes as no surprise, considering the latest federal government data show oil and gas activities led to the strongest statewide economic gains in 2017. This reality has led to headlines in Ohio reporting that hundreds of jobs are currently available in the Appalachian region. In response and in preparation for the surge in available jobs, the Ohio Oil and Gas Energy Education Program (OOGEEP) recently unveiled a series of 28 modern career videos highlighting more than 75 in-demand jobs associated with shale development. The goal? To address the supply and demand issues created by the surge of “in-demand” jobs which require well trained and qualified candidates. Here’s a look at some of the jobs currently available in Ohio.
EID recently spoke with Rhonda Reda, Executive Director with OOGEEP about their video series and her take on ways her organization, and others, are collaborating to address workforce development.
EID: Can you give us a general overview of the Ohio Oil and Gas Energy Education Program?
Reda: OOGEEP was created 20 years ago to provide a variety of public outreach, educational and safety programs on behalf of the Ohio natural gas and crude oil industry. Our programs include teacher workshops, career events, science fairs, scholarships, industry safety trainings, scouting programs, firefighter trainings, economic impact studies, community events and speaking presentations just to name a few.
EID: Congratulations on 20 years, by the way. Can you tell us more about the “Oil and Gas Careers in Ohio Video Series” and what OOGEEP is working on now?
Reda: About six years ago, the industry charged OOGEEP with creating and developing a variety of workforce development initiatives. To start, OOGEEP created a unique Oil and Gas Career Guide that featured more than 75 different in-demand jobs, descriptions and educational requirements. From there, OOGEEP began working with educational and training institutions throughout Ohio to evaluate, update and promote their respective qualified programs specific to these industry careers. Today, OOGEEP is now working with more than 90 different colleges, universities, technical and apprenticeship programs that offer certificate, one-year, two-year and four-year degree opportunities.   OOGEEP also created a Scholarship Foundation to help support students pursuing career and training opportunities in our industry. In 2007, OOGEEP awarded seven scholarships, and just a little over 10 years later, that scholarship program is now awarding in excess of 50 new scholarships a year. Over the last three years, OOGEEP, in partnership with API, supplemented our other career and scholarship programs and began filming a series of career video clusters that represent all 75 plus careers. We shot footage at more than 50 locations. This has been an enormous project, and we are so excited that these videos are now ready to be shared. In the fall, we will be hosting a large statewide event that will include students, teachers and guidance counselors, so that they can start utilizing all these industry funded career and workforce development tools. In the near future, we will also be adding school career kits, and personalized job assessments.
EID: Does OOGEEP collaborate with Ohio schools and other groups who try to help address unemployment in the state?
Reda: In addition to the 90 different colleges, universities and technical schools already mentioned, OOGEEP also has a positive relationship with the Ohio Department of Education, Board of Regents, Governor’s Office on Workforce Transformation, Jobs Ohio and the Ohio Department of Jobs and Family Services just to name a few. It is all about collaboration and teamwork! Everyone has the same goal . . . long term job security with excellent salaries and benefits. Throughout the year, OOGEEP also hosts a number of STEM Teacher Workshops which include a career component. To date, we have had teachers from all 88 counties in Ohio participate.
EID: Recently, an OhioMeansJobs Guernsey County Employment Specialist said, “We get calls each day from employers desperately needing their job orders filled, from truck drivers to machine operators. There are simply not enough well trained and qualified candidates to meet their demand.” Her sentiment seems to be consistent with the fact that unemployment figures are staying the same even though there are hundreds of jobs available, particularly along the Ohio River Valley. What is your take on this?
Reda: I agree. We hear the exact same concern expressed by our industry partners. We are hoping that through these workforce initiatives, we can help promote and secure more of these in demand jobs needed by everyone. However, too often there are also misperceptions made about the jobs in our industry, and many do not realize the wide variety of different career paths available. I think we also need to do a better job promoting those careers involving trades. Recently, we learned at a guidance counselor conference, that only 21 percent of high school seniors that start out seeking a four-year degree actually finish school and get their diploma. That leaves 79% of students wondering what is next! We have to help provide them with other options that can lead to amazing careers! Finally, we must also continue to address the drug problem —- this is a local, statewide and nationwide issue. The reality is that there are too many candidates that are simply unemployable. We all need to work on this issue.
EID: What tools have you found, in your experience over the past 20 years, which have made the most impact with students?
Reda: I think providing incentives (science fair and scholarship awards) has certainly helped engage many students. OOGEEP also does a lot of classroom presentations, and we provide a lot of job information, so it is very exciting to see a student suddenly intrigued about becoming a welder or a machinist too. College is not for everyone, so it is really nice to be able to showcase so many careers, and this is very unique to have an industry, like ours, that can provide such a variety.
In addition to the video series, there’s an incredible amount of ways that the public is able to learn more about “in demand” jobs — but a good place to start is OOGEEP. The fact of the matter is that shale development has both directly and indirectly led to the addition of over 100,000 jobs in Ohio. Perhaps it time to fire back up the job fairs, because it’s obvious that Ohio is open for business and hiring — thanks to the oil and gas industry!

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Tuesday, May 22, 2018

Hess Corp. Representative Talks About Company's Ohio Fracking Activity

From the Weirton Daily Times:
James W. Wilson, Utica operations area lead for Hess Corp., with a Steubenville presence at 4525 Sunset Blvd., was the May 8 guest speaker at the Steubenville Kiwanis Club’s noon luncheon meeting held at the YWCA of Steubenville.

Wilson, who was introduced by Kiwanian George Pugh, May program chair, is a native of North Dakota who has spent most of his career with a small independent oil company engaged in the drilling of small exploration projects and the acquisition of existing producing properties mostly in North Dakota, Montana, Wyoming and Utah. He has been with Hess Corp. since 2010 and recently transferred to Ohio to manage Ohio operations. 
Hess is a Fortune 500 company, Wilson explained, with safety as its No. 1 priority; the environment as No. 2; and production as No. 3. 
“In production we make about in the mid 300,000 barrels of oil equivalent a day throughout the world,” Williams said. “We are an international company. We’ve got significant operations in Ohio, North Dakota’s Bakkem, the Gulf of Mexico and Malaysia and more recently Guyana in South America, which represents a major world class discovery.” 
Worldwide, Hess has about 2,075 employees and “lots of contractors.” In Ohio, there are 15 employees, two full-time contractors and other contractors in the field handling maintenance and service work. Of the three engineers, two are regional, he said.
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Permitting Nearly Stalls in Utica Shale as Rig Count Drops Again

New permits issued last week: 1  (Previous week: 10-9
Total horizontal permits issued: 2830  (Previous week: 2830+-0
Total horizontal wells drilled: 2348 (Previous week: 2346+2
Total horizontal wells producing: 1898 (Previous week: 1890+8
Utica rig count: 20 (Previous week: 21)  -1

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Monday, May 21, 2018

Rex Energy Files for Bankruptcy, Begins Liquidating Assets

From the Pittsburgh Post-Gazette:
After months of trying to find another way, Rex Energy Corp. is filing for bankruptcy. 
The State College-based oil and gas company whose major holdings are leases and shale wells in Butler County, disclosed in its quarterly report with the Securities & Exchange Commission that it could not come to an agreement with its lenders after missing a debt payment in late April. 
Rex said it would be seeking protection under Chapter 11 of the bankruptcy code imminently. 
As of the end of last year, the company had 105 full-time employees. Only 17 of them work in the field as Rex uses independent contractors and consultants to do a lot of the drilling, fracking and associated work. 
Founded in 2007, Rex has been shedding assets and looking for capital for some time now. Last year, it sold a substantial portion of its Ohio acreage to Antero Resources Corp. Earlier this year, it sold its interest in wells in Westmoreland, Centre and Clearfield counties.
And from Rex Energy itself:
Rex Energy Corporation (REXX: OTC), an independent oil and gas exploration and production company, today announced that, following its previously announced strategic review, it has decided to begin an orderly sale process for its remaining assets in order to maximize their long-term value and prospects. To facilitate the sale and address its debt obligations, the Company initiated voluntary proceedings under Chapter 11 of the U.S. Bankruptcy Code with support outlined in a Restructuring Support Agreement signed by 100% of its first lien lenders and approximately 72% of its second lien noteholders.

Rex Energy's drilling and production programs are operating as usual, and the Company is maintaining the necessary staffing and resources to meet its commitments to gathering and processing partners. 
"Over the past seven months, Rex Energy has been in deep discussion with our lenders and advisors to evaluate every aspect of our business and take proactive steps to overcome the challenges our industry continues to face," said Tom Stabley, Chief Executive Officer. "We have undoubtedly made progress in addressing the realities of the global commodities market but require a more fulsome debt restructuring to overcome the immense pressures our business is facing. Ultimately, we decided that the best possible outcome was to put our remaining assets into the hands of owners with the financial strength necessary to position them for long-term growth and success. Chapter 11 provides an orderly process to achieve these goals in a way that maximizes value for our stakeholders." 
The Company has secured a financing commitment of $100 million from its existing first lien lenders, which, combined with its normal operating cash flow, will allow Rex Energy to maintain normal operations and meet ongoing financial commitments. In addition, and as is typical in these cases, the Company has filed a series of "First Day Motions" that, once approved by the Court, will allow it to uphold commitments to stakeholders, including employees, vendors and service providers, gathering and processing partners, and royalty owners.

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Report: Shale Industry Has Invested Almost $64 Billion in Ohio

From Kallanish Energy:
The shale industry has invested $63.9 billion in Ohio as of mid-2017, according to a JobsOhio official. 
That private sector investment in the Utica Shale in eastern Ohio started in 2011, Dana A. Saucier Jr., senior managing director, Energy and Chemicals, Food & Agribusiness,said in an interview in Smart Business. 
The $63.9 billion total includes upstream, midstream and downstream investments, Kallanish Energy reports. 
To date, Ohio has permitted 2,830 Utica wells, of which 2,346 have been drilled and 1,890 are producing. 
“Those looking to invest in Ohio’s shale opportunity have confidence in the state and the business environment it fosters,” he said. “The prevailing sentiment is that it’s an attractive place to deploy capital.” 
Pipelines to move natural gas to market have brought “an uptick in additional investment in the last 12 months of around $10 billion,” he said.
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Tuesday, May 15, 2018

Utica Rig Count Declines Again Last Week

New permits issued last week: 10  (Previous week: 7+3
Total horizontal permits issued: 2830  (Previous week: 2820+10
Total horizontal wells drilled: 2346 (Previous week: 2338+8
Total horizontal wells producing: 1890 (Previous week: 1890+-0
Utica rig count: 21 (Previous week: 22)  -1

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EIA Continues to Predict Big Shale Output

From Reuters:
U.S. shale production is expected to rise by about 145,000 barrels per day to a record 7.18 million bpd in June, the U.S. Energy Information Administration said on Monday. 
A majority of the increase is expected to come from the Permian basin, the biggest U.S. oil patch, where output is expected to climb 78,000 bpd to a fresh record of 3.28 million bpd, the EIA said in its monthly drilling productivity report here#tabs-summary-2. 
Soaring Permian crude production has already outpaced pipeline takeaway capacity, depressing prices in the region and leaving traders scrambling for alternatives to get crude to market.

Bakken output is expected to rise 20,000 bpd to 1.24 million bpd, the highest since June 2015, while Eagle Ford production is set to rise 33,000 bpd to 1.39 million bpd, the highest since February 2016. 
Production in the United States has surged thanks to the shale boom, helping send U.S. crude futures’ discount to international benchmark Brent crude futures WTCLc1-LCOc1 to the widest in six months.
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Preparation Continues for Belmont County Cracker Plant as PTT Tests the Soil

From The Intelligencer:
To ensure the ground can support a $10 billion ethane cracker, officials are testing the soil at the former R.E. Burger plant along the Ohio River in Belmont County.

Nearly two years ago, the 854-foot-tall smoke stack at the site fell to the ground after an organized sequence of explosions. Last summer, officials with Thailand-based PTT Global Chemical paid $13 million to acquire this property. 
“This is part of our ongoing feasibility and engineering work, including permit-related activities required through our contractors and consultants,” said PTT spokesman Dan Williamson. 
Early this month, PTT paid another $17.5 million to acquire the Ohio-West Virginia Excavating property, which is to the south and west of the Burger site. By combining the areas, the company controls about 500 acres for possibly building the ethane cracker. 
Williamson, however, said this acquisition should not be considered confirmation of a final investment decision, which he said remains under evaluation. 
Still, Belmont County Commissioner J. P. Dutton said he remains cautiously optimistic.
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Analyst Questions Whether Chesapeake Energy's Improvement is Enough to Save the Company From Huge Debt

From Seeking Alpha:
  • While Chesapeake is showing some decent financial results, allowing it to use the proceeds from asset sales to pay down debt, the hole it is in may be too deep. 
  • Its massive exposure to shale gas acreage remains a big impediment given that there are few signs of natural gas prices improving going forward. 
  • By the time natural gas prices will improve, it will be because Chesapeake as well as other shale drillers will run out of prime natural gas drilling sites.
After many years of deep losses incurred on its operations, specifically during the years when oil prices plunged, Chesapeake (CHK) is finally putting in some decent operating results, with the Q1 net operating profit at $268 million, on revenue of $2.5 billion, it is a decent profit margin of almost 11%. This is in part thanks to higher oil prices, but also to a large extent due to drilling consolidation in the more profitable acreage within its asset portfolio, which has been the case for the shale industry overall. The industry also got some significant help from plunging oil services costs, which are now starting to recover. The challenge for the entire shale industry will now be to keep the operating profits (where applicable) even as those service costs increase together with the price of oil. Those who will continue to report financial losses from this point on will most likely eventually disappear. For those who will from now on produce operating profits on the back of the higher oil price environment, the question will remain whether it is going to be enough to make up for the many years of losses incurred over the past decade or so. For Chesapeake the question is in my view more urgent, because the debt hole it is in is particularly deep. 
In order to get a better understanding of how Chesapeake got to be where it is right now, I think it is important to take a step back and look at its yearly operating results going back to the years before the shale boom started, until the present. 
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Friday, May 11, 2018

ETP Says Rover Will Be Fully Up and Running by June 1

From Seeking Alpha's transcript of a 1st-quarter earnings call with Energy Transfer Partners:
Now for an update on our other projects, and starting with Rover. As a reminder, Phase 1A was placed into service on August 31, 2017. And Phase 1B was placed into service on December 15 of 2017, allowing Rover to transport up to 1.7 Bcf per day. 
And last week, as I mentioned, we received approval from FERC to place additional Phase 2 facilities into service. This approval allows for the full commercial operational capability of the Market Zone North Segment, inclusive of delivery into Vector [pipeline] for delivery to end users throughout Michigan and the Dawn gas hub. These latest approvals by FERC allow for approximately 75% of Rover capacity to be in service. 
Construction of the full project is nearing completion. All HDD crossings have been completed. And we are progressing with final hydrostatic testing and tie-in work to achieve mechanical completion and expect to ask FERC to place the rest of the 3.25 Bcf per day project into service by June 1.
Read the whole transcript by clicking here.

Even as construction nears completion, the Ohio EPA continues to nip at ETP's heels.  From Kallanish Energy:
The Ohio EPA and the company disagree on the source of low-level contamination found in drilling fluids used for horizontal directional drilling under the Tuscarawas River along the pipeline route. 
The company said the contamination appears to have come from the Tuscarawas River or stream sediments. 
The EPA disagreed with that contention and asked the Federal Energy Regulatory Commission in a Tuesday note to order a more sweeping analysis of the contamination. That includes looking at a disposal site used by the company, near Ashland, Ohio, and preparing a groundwater monitoring plan. 
The EPA said the contamination has been detected at numerous pipeline drilling sites across northern Ohio in similar concentrations and that it appears the drilling fluids are being contaminated in other ways. 
It wants the company to determine the cause and eliminate the problem. The contamination issue arose last February.
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Ohio Gubernatorial Candidate Who Called for Fracking Ban Gets Trounced in Primary

by Jackie Stewart, Energy in Depth

Ohio Democratic gubernatorial candidate Dennis Kucinich made no bones about his desire to ban fracking in the Buckeye State during his campaign, telling reporters in January that “if elected Ohio governor, he’d use the office’s power to end the drilling technique known as hydraulic fracturing, or fracking” and that “it’s his goal to end all kinds of oil and gas drilling in Ohio.”
The results of Tuesday night’s primary election speak volumes as to how Ohio citizens felt about Kucinich’s extreme “Keep It In the Ground” agenda.
Kucinich not only lost, but lost big, falling by more than 40 percentage points to Democratic primary winner Richard Cordray, as the following New York Times graphic shows.
Source: New York Times
Not only did Kucinich fail to win a single county, he also (quite predictably) faired particularly poorly in major Utica Shale counties. Kucinich managed to get no better than 24 percent of the vote in Ohio’s top-10 shale counties, garnering less than 20 percent of the vote in Harrison, Monroe, Nobel, Guernsey, Columbiana and Jefferson counties, and a miniscule 6.5 percent of the vote in Mahoning County, where Youngstown voters alsorejected a local fracking ban for the seventh consecutive time on Tuesday.
These results further confirm the findings of a recent Oregon State University study that finds those who live close to shale development — and therefore better understand fracking’s financial benefits and manageable risks — tend to be more supportive of fracking. The results also show that folks who live near fracking are clearly not embracing extreme calls from the “Keep It in the Ground” movement to ban the practice.
As the Toledo Blade correctly stated earlier this year, Kucinich “pretty much wrote off all of eastern Ohio by proposing to ban fracking, the most promising economic activity in that part of the state.”
And as EID highlighted earlier this year, the “moonbeam congressman” didn’t help his cause by facilitating a deplorable Cleveland Scene article headlined “Dennis Kucinich Finds Fracking Facts in Southeast Ohio: A Horror Story” that — contrary to what that headline claims — was based almost entirely on laughable anecdotes that no doubt failed to endear him to folks in Appalachia.
In contrast to Kucinich’s approach, his fellow Democratic candidates unanimously rejected his extreme plan to ban fracking. The eventual Democratic primary winner’s far more pragmatic stance on the issue clearly paid dividends, as Cordray stated in March that Kucinich’s plan to ban fracking was “an extreme position” that,
“will lose us eastern Ohio for a generation and dismisses the fact that there are many small landholders there with an oil or gas well on their property (that) is their sole means of livelihood.”
Indeed, Utica Shale development has made a $50 billion impact on Ohio’s economy, supporting thousands of union jobs and generating millions in tax revenue. And even the Environmental Defense Fund has hailed Ohio for leading the country in reducing power sector carbon emissions, thanks primarily to increased electricity generation from natural gas.
The contrast between scientific evidence and Kucinich’s hollow anti-fracking rhetoric was perfectly encapsulated by the fact that on the same day Kucinich was quoted in Bloomberg saying fracking is “poisoning our water resources in Ohio,” an award-winning University of Cincinnati study finding no evidence of water contamination attributable to fracking in Ohio’s most heavily drilled counties was published.
Ohioans spoke clearly on Tuesday: Kucinich’s extreme “Keep It In the Ground” agenda simply does not play in the Buckeye State. And fortunately, it’s not playing throughout the rest of the United States, either.

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Gulfport Energy Continues to Feel Good About Utica Shale Activity

From Seeking Alpha's transcript of a 1st-quarter earnings call with Gulfport Energy:
Turning to completions in the Utica Shale, we began the year very active, running two completion crews throughout the quarter and completing over half of our total planned stage count for 2018. During the first quarter, we averaged 6.3 stages per day and completed 737 stages in total, which includes 18 wells completed and 10 wells in progress at the end of the quarter, all of which Gulfport holds effectively 100% working interest. This robust level of activity weights a heavy number of turn-in-lines to the second and third quarters for the 2018 program.

Despite several weather challenges and effectively zero turn-in-lines during the quarter, production came in at 1.03 Bcf equivalent per day, a decrease of only 1% from the fourth quarter of 2017. Again demonstrating not only the strength of our field operations, but also highlighting the quality rock we have in the Utica. 
The Utica has become a very consistent and reliable asset in our portfolio. We're never done learning or working to identify where we can become more efficient to add more value and as it sits today we continue to look at every phase of the operation with our focus shifting to taking minutes, no longer days, out of each activity.
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EPA to Study Disposal Options for Oil Wastewater

Press release:

The US Environmental Protection Agency (EPA) wants to know if wastewater produced during oil and gas production could be treated and discharged into lakes and rivers, rather than disposed of underground.

EPA said today will take a "holistic look" at the regulation and management of wastewater from conventional oil and gas production and from hydraulic fracturing. Among the ideas the agency is considering is whether there is support for regulations to allow "broader discharge" into surface water.

Oil and gas production generates large volumes of wastewater, often with high levels of salt and metal. The industry disposes of most of its wastewater through injection wells into underground aquifers. But EPA said it has becoming evident there are limits in how much wastewater can be disposed of in that manner in some areas. Oklahoma has restricted underground disposal because of concerns of links to earthquakes. And there have been concerns about disposing of water in areas where water is scarce.

EPA administrator Scott Pruitt, who had close ties to oil and gas producers in Oklahoma when he was the attorney general there, said he was pleased the study would consider ways to develop "effective options and alternatives to better manage wastewater" from the oil and gas industry.

EPA said it will reach out to industry, states and other groups as it gathers information for its study. After the study is complete, EPA said it will decide if future actions are appropriate.

EPA in 2016 prohibited oil and gas producers from sending their wastewater to public treatment plants, which it said at the time were ill-equipped to handle the large volumes of produced water from the industry. Pennsylvania oil producers sued over the change, and EPA is now considering if changes are warranted.

EPA separately reached a settlement with environmentalists in 2016 where it agreed to review its standards for disposing, handling and storing oil and gas wastewater by March 2019. Environmentalists at the time said states had too much flexibility in how to handle and dispose of wastewater, leading wastes to be stored in temporary storage pits or sprayed on roads as a deicing fluid.
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Some Bowling Green Residents Are Scared of the NEXUS Pipeline

From the Sentinel-Tribune:
A citizen’s concerns about how the Nexus pipeline would be monitored prompted discussion at Monday’s Bowling Green City Council meeting. 
During the lobby visitation portion of the meeting, resident Brad Holmes requested a more official proclamation from council or other city officials regarding plans to monitor the Nexus pipeline project.

“It think it would be remiss to not address those concerns,” he said, because Nexus “is reality, it’s happening.”

The $2 billion Nexus project, which would run near the city’s water treatment plant, brought out concerns that the proximity of the project to the Bowling Green fault and the city’s water intake on the Maumee River could pose risks such as seismic activity or water contamination. The issue was a major topic of discussion and debate throughout 2017, and was an impetus for a charter amendment initiative which, though it ultimately failed at the ballot box in November, spurred a legal case that went all the way to the Ohio Supreme Court. Holmes was involved in the amendment initiative.
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Wednesday, May 9, 2018

Eclipse Resources Provides Update on Utica Shale Activity

From Seeking Alpha's transcript of Eclipse Resources' 1st-quarter earnings call:
Our team has also recently completed the drilling of the company's first Utica Shale well in Pennsylvania in our Flat Castle project area. This well has a total metric depth of 25,017 feet with a horizontal lateral extension of 13,900 feet. We drilled it on time and on cost. And we continue to be excited by the potential we see in the Flat Castle area. We look forward to bringing this initial well online late in the third quarter of 2018. As we have discussed in our recent Analyst Day event, the company made the strategic decision to reorder our drill schedule and focus on the condensate portion of our acreage. This decision has allowed us to take advantage of the improvement in the near-term oil pricing while, additionally, allowing us to achieve increased commodity product diversification. For the first quarter of 2018, all 5 of the wells that we turned to sales were condensate-rich wells. 
These wells included our first 2 operated Marcellus wells and 3 Utica Condensate wells. This decision drove a quarter-over-quarter increase in our liquids revenue of approximately 36% to become approximately 47% of the company's total unhedged revenue. We believe this percentage to be one of the highest in our Appalachian peer group. 
Based on recent data from the Ohio Division of Natural Resources Eclipse has drilled 8 of the top 10 oil-producing wells in the Utica Shale during the fourth quarter of 2017. With the additional revenue from the liquids production, our all-in realized price before hedging was $3.88 per Mcfe for the first quarter of 2018, a level not achieved since the fourth quarter of 2014. Additionally, when coupled with improvements in our operating expenses, we achieved a sequential quarter-over-quarter increase in cash operating margin of 27% to $2.22 per Mcfe. We believe this liquids focus has led to our well productivity being the best as compared to our Appalachian peers when measured on gross revenue per lateral foot basis, which ultimately leads to higher full-cycle corporate returns, above our corporate cost of capital. 
As we focus on achieving attractive full-cycle returns, we are committed to appropriately managing our growth levels and liquidity, with an eye towards managing cash flows as opposed to focusing solely on production growth. Our belief remains that we are charged by our shareholders to be good stewards of capital; and therefore, given the somewhat depressed medium-term output for natural gas prices, we are lowering our capital expenditure forecast for the second half of 2018 considerably. We will take this step by executing on one of two approaches. First, considering our Utica Shale drilling joint venture, as we move into the third quarter, we will have drilled the last of the remaining wells to be drilled in the first 2 programs in the joint venture. We have entered into discussions with our partner, Sequel Energy, to design a third program, which will commence in the third quarter and will be expected to include approximately 20 gross wells.
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City of Green Holds Town Hall to Address Concerns Over Pipeline Safety

From The Suburbanite:
As construction continues to progress on the NEXUS pipeline, safety is seemingly on everyone’s mind. 
Residents have spoken at several Green City Council meetings asking for officials to hold a town hall to discuss the pipeline. Those residents got their request when the city brought in several experts to speak about pipeline safety and what residents should expect. 
The town hall, held at Queen of Heaven Parish Life Center, provided information from several speakers and those in attendance had the opportunity to submit questions to be answered. 
Green Mayor Gerard Neugebauer said some people in the city may not have accepted the pipeline, but he asked those in attendance to put aside their differences. 
“This meeting is about education,” Neugebauer said. “Safety as I see it is about being educated.” 
The main speaker during the meeting was Executive Director of the National Pipeline Safety Trust Carl Weimer. The trust is an organization that promotes pipeline safety through education and advocacy, increased access to information and partnerships with residents, safety advocates, government and industry resulting in safer communities and a healthier environment. 
Weimer has served as a member of the U.S. Department of Transportation’s Technical Hazardous Liquid Pipeline Safety Standards Committee, the Canadian Energy Pipeline Association’s External Advisory Panel and the governor appointed Washington Citizen Committee on Pipeline Safety. His degree in Natural Resources and Environmental Education comes from the University of Michigan, as well he has a degree in Industrial Electronics Technology from Peninsula College.
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Power Plants Lead to $4.6 Billion Investment in Mahoning Valley

From Business Journal Daily:
The investment numbers are unlike any the region has witnessed in decades – more than $4.6 billion scattered across four counties in or around the Mahoning Valley where new, nimble and efficient electrical power plants are either in operation, under construction or under consideration. 
It’s a signature of where growth in new energy will develop in America and what it will look like. This section of northeastern Ohio and western Pennsylvania – with its abundance of natural gas from the Utica and Marcellus shales – has emerged as the fulcrum for the industry’s future. 
As older, less efficient power plants are retired or shut down, they’re being replaced with smaller, more cost-efficient combined-cycle plants that use natural gas and steam – not coal or nuclear power – to generate electricity for homes and businesses.

“What’s happening in the industry right now is equivalent to the automobile replacing the horse and buggy,” says Bill Siderewicz, president of Massachusetts-based Clean Energy Future LLC, which developed the Lordstown Energy Center, under construction, and is working to secure a second project for Lordstown, the Trumbull Energy Center.
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U.S. Rep. Tim Ryan Voices Support for FRAC Act

From Business Journal Daily:
U.S. Rep. Tim Ryan called Monday for increased transparency in hydraulic fracturing. 
Ryan, D-13 Ohio, last week signed on a co-sponsor of the Fracturing Responsibility and Awareness of Chemicals, or FRAC, Act. The legislation, introduced by U.S. Rep Diana DeGette, D-1 Colorado, has 61 cosponsors, all Democrats.

The bill would establish “common sense safeguards” to protect groundwater from risks associated with hydraulic fracturing, or fracking, a technique used in oil and gas extraction. If approved, it would require disclosure of the chemicals used in fracking fluids and would remove the oil and gas industry’s exemption from the Safe Drinking Water Act.

“There’s no denying that there are immense climate-related benefits and economic benefits associated with the transition to natural gas, particularly here in Ohio. Even still, we must be vigilant ensuring that such benefits do not come at the expense of the health and wellness of our communities,” Ryan said in a release. “We as lawmakers must make sure natural gas recovery is done in a way that puts community health front and center.” 
The act would call for disclosure to the state or to the U.S. Environmental Protection Agency, in cases where EPA has primary enforcement responsibility in the state. The disclosures would then be made available to the public online.
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Energy Transfer Announces FERC Approval to Place Additional Facilities on Rover Pipeline’s Phase 2 into Service

Press release:

Energy Transfer Partners, L.P. (NYSE: ETP) announced today that Rover Pipeline, LLC received approval from the Federal Energy Regulatory Commission (FERC) to place additional Phase 2 facilities into service. Last week, FERC granted Rover permission to place a segment of Phase 2, which included Mainline Compressor Station 3 located in Crawford County, Ohio, and a section of the line between Mainline Compressor Station 2, in Wayne County, Ohio, and Mainline Compressor Station 3, in service for additional throughput opportunity. The approval from FERC granted today allows for the full commercial operation capability of the Market Zone North Segment.

Phase 1 of the project was also placed into service in segments, with the first portion going into service August 31, 2017, and the remaining segment of Phase 1 going into service in December of 2017. Since December 2017, Rover has been capable of transporting up to 1.7 billion cubic feet per day of natural gas.

Rover will transport natural gas from the Marcellus and Utica Shale production areas to markets across the United States as well as into the Union Gas Dawn Storage Hub in Ontario, Canada. Construction of the entire project is anticipated to be completed later this quarter.

Land Continues to Get Snatched Up for Belmont County Cracker Plant

From The Intelligencer:
PTT Global Chemical officially controls about 500 acres for building the Belmont County ethane cracker, as a deed filed this week shows the Thailand-based firm paid about $17.5 million to acquire the Ohio-West Virginia Excavating property, a parcel of about 350 acres.

Last summer, the company paid more than $13 million to purchase the former R.E. Burger power plant property, a parcel of about 150 acres, from FirstEnergy Corp. The $30.5 million in land deals are in addition to the $150 million officials said they spent so far on engineering and design work for the proposed petrochemical plant. 
Still, the $180.5 million seems somewhat minuscule compared to the potential overall price tag, which officials said could now go as high as $10 billion. 
“This is yet another milestone for the project,” said PTT spokesman Dan Williamson on Wednesday. “It is clearly a positive step that shows the company continues to make progress.” 
Williamson, however, said this acquisition should not be considered confirmation of a final investment decision, which he said remains under evaluation. 
Earlier this year, PTT officials confirmed a partnership with South Korea’s Daelim Industrial Co. Despite the partnership, only PTT’s name appears on the deeds for the large parcels acquired at Dilles Bottom.
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Chesapeake Energy Reports Some Positive Results

From Reuters:
Chesapeake Energy Corp’s (CHK.N) quarterly profit exceeded analysts’ estimates on Wednesday, as it produced more oil and natural gas at higher prices while continuing to lower costs, pulling shares in the company around 3 percent higher. 
Chesapeake’s production rose nearly 5 percent to 554,000 barrels of oil equivalent per day (boepd), while its number of gross wells supplying to the market dropped 25 percent. 
The Oklahoma-based company’s average realized oil price rose 10 percent to $56.89 per barrel in the quarter, while its natural gas price rose nearly 16 percent.

That was in line with the trend among U.S. producers this quarter, who have all benefited from a roughly one-third rise in prices of U.S. light crude CLc1 compared to a year ago.

But the company also said a 4 percent fall in how much it pays to gather, process and transport its oil and natural gas had led to a reduction in overall costs per barrel on a combined basis.
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Rig Count Down, Activity Slow on Latest ODNR Utica Permitting Report

New permits issued last week: 7  (Previous week: 6+1
Total horizontal permits issued: 2820  (Previous week: 2815+5
Total horizontal wells drilled: 2338 (Previous week: 2333+5
Total horizontal wells producing: 1890 (Previous week: 1888+2
Utica rig count: 22 (Previous week: 24)  -2

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ODNR Publishes May 2018 Utica and Marcellus Activity Maps

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Peer-Reviewed Study Finds No Groundwater Contamination from Fracking in Ohio

by Jackie Stewart, Energy in Depth

The first ever and award winning Utica Shale study to examine the root source of methane (CH4) linked to fracking has finally been published in a scientific journal. The long awaited multi-year University of Cincinnati (UC) groundwater study that found no impacts from fracking was finally published this week in the peer-reviewed journal Environmental Monitoring Assessment – more than two years after researchers first announced its findings. The study was also blessed by the Ohio Environmental Council in 2014 as their recipient for the “Science and Community Award.”
Notably, the study’s topline conclusions echo comments made by the report’s lead researcher and a master thesis that was uncovered by EID two years ago, stating:
“We found no relationship between CH4 concentration or source in groundwater and proximity to active gas well sites.”
“… our data do not indicate any intrusion of high conductivity fracking fluids as the number of fracking wells increased in the region.”
The study further highlights how incredibly important the publication of the findings are, given the fact that it truly is a first-of-its-kind, stating:
“[O]ur study is the first to characterize CH4 sources in groundwater in the Utica Shale drilling region of Ohio, and is one of only a handful of time series studies of CH4 concentration and associated isotopic composition in an oil and gas extraction area.”
While this study is indeed a first for Ohio, this is just one of more than two dozen studies showing that fracking is not a major threat to groundwater, and as EID has previously covered, the report’s now-confirmed topline conclusion is all-the-more noteworthy considering it was partially funded and orchestrated by anti-fracking groups. In fact, the study received over 18 percent of its funding from the anti-fracking Deer Creek Foundation. In other words, it should come as no surprise that the hypothesis was not supported by the facts of the data, and we applaud UC for acknowledging that point as well.
The researchers reveal in the study that:
“We hypothesized that CH4 concentration would increase as the number of shale gas wells in the area increased, with the isotopic composition of CH4 reflecting an increasingly fossil fuel derived natural gas source, and that pH of groundwater would decrease and electrical conductivity would increase due to the presence of acidic, salty hydraulic fracturing fluids in groundwater. We also predicted that groundwater wells located within 1 km of active shale gas wells would have elevated levels of dissolved CH4 with isotopic ratios reflecting a natural gas source, and that groundwater within this ‘active zone’ would have decreased pH and increased electrical conductivity.”
But the data collected from 25 water wells in Carroll, Harrison, Stark, Belmont and Columbiana counties between 2012 and 2015 simply did not support that hypothesis:
Contrary to our hypothesis, we did not see an increase in CH4 concentration or change in isotopic composition of CH4 in groundwater in regularly monitored wells over the study period (Figs. 2 and 3), despite a large increase in the number of producing shale gas wells in our study area (Fig. 1). In fact, we saw a decrease in CH4 concentration in some of our regularly monitored wells, although the number of samples in our time series is relatively small. The low numbers of significant correlations indicate there may be natural variability in concentrations of biogenic CH4 in groundwater in our study area (contrary to our expectation).”
As EID has highlighted numerous times, it was at an anti-fracking Carroll Concerned Citizens meeting more than two years ago that lead researcher and UC professor Amy Townsend-Small announced the study’s findings, stating that,
“I’m really sad to say this but some of our funders, the groups that had given us funding in the past, were a little disappointed in our resultsThey feel that fracking is scary and so they were hoping our data could point to a reason to ban it.” (emphasis added)
But again to the authors of the UC groundwater study’s credit, they correctly reported what the data they collected indicated even though it was contradictory to their hypothesis. In fact the Ohio Environmental Council (OEC) stated,
“This innovative research study is examining the potential effects of hydraulic fracturing, or fracking, on groundwater in Ohio’s Utica shale. Led by UC geologist Amy Townsend Small, this first-of-a-kind project is testing for the presence of methane (the primary component of natural gas) and its origins in groundwater and drinking water wells before, during, and after the onset of fracking. Other studies have focused on water contamination only after fracking is complete. The project involves the gathering and analysis of water samples in eastern Ohio by UC graduate and undergraduate students.”
The study notes that just 115 drilling permits had been issued in Ohio when the study began in January 2012, and that 1,600 permits had been issued by the study’s conclusion in February 2015. Most of the 180 total samples were collected in Carroll County, which has emerged as the most-drilled Ohio county, seeing shale well counts increase from just three in late 2011 to 354 in 2015, according to the study’s master thesis.
The fact that the samples collected on a “voluntary” basis and based on “landowner interest” — translation: from landowners that were involved with Carroll Concerned Citizens or sympathetic to their efforts — further validates the study’s conclusion. And the findings really couldn’t be clearer: there was no evidence of groundwater contamination attributable to natural gas development in the study area. From the study:
“our data indicate that the dominant source of CH4 in groundwater in the Utica Shale region is biogenic, and that neither the CH4 concentration nor its source change with an increasing number of shale gas wells or with changing distance to shale gas wells.”
EID applauds the UC research team for not only (finally) getting this study published, but not deviating from the original conclusions reported more than two years ago. We now call for those who have claimed fracking is “poisoning” Ohio groundwater (we’re looking at you, Dennis Kucinich) to acknowledge scientific evidence and stop fear-mongering that is driven more by politics than the facts.

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