Friday, March 22, 2019

Permitting Slows in Utica Shale Last Week, But Producing Wells Total Climbs



New permits issued last week: 6 (Previous week: 21)  -15
Total horizontal permits issued: 3037 (Previous week: 3031 +6
Total horizontal wells drilled: 2552 (Previous week: 2546)  +6
Total horizontal wells producing: 2168 (Previous week: 2141)  +27
Utica rig count: 15 (Previous week: 14)  +1

Utica Shale Activity Map for March 2019 Now Available

There was previously an error on the ODNR website causing the Marcellus shale map to show when attempting to access the Utica map, but that has been corrected.  So here is the updated activity map!


Monday, March 18, 2019

Encino Plans a Measured Approach to Maximizing Utica Assets

From the Akron Beacon Journal:
In an industry known for boom-and-bust cycles, Encino Energy plans to follow a strategy of stable development in Ohio’s Utica Shale, President and CEO Hardy Murchison said Friday. 
Encino Energy is a partner in Encino Acquisitions Partners, which bought Chesapeake Energy’s assets in Ohio last year for $2 billion, including an office building office in Louisville, drilling rights to 900,000 acres and more than 900 wells. 
But where Chesapeake spent freely to explore new areas — and piled up debt — Texas-based Encino Energy has focused on proven reserves and a healthier balance sheet. 
“All of that is part of a longer-term strategy to run this as a normal business that needs to be profitable, less volatile and therefore better for its shareholders, its employees and the community,” Murchison told The Canton Repository after he and other members of Encino’s team spoke to the Stark Economic Development Board at Kent State University at Stark. 
On Thursday, Murchison and chief operations officer Ray N. Walker Jr. met with Gov. Mike DeWine and other state leaders, and spoke at the Ohio Oil & Gas Association’s annual meeting.
Continue reading by clicking here. 

And from NGI:
“You have to recognize that we’re in the transition from Chesapeake to Encino and that takes months to accomplish,” Murchison said Thursday at the winter meeting of the Ohio Oil and Gas Association (OOGA) in Columbus. “As we take over, we obviously start to have more and more influence, but to be clear, virtually all of the wells that will go into production in 2019 were planned by Chesapeake when we arrived on scene.” 
In his first public address since the acquisition was announced, Murchison said Encino is stabilizing operations and trying to work at a steadier pace. Chesapeake was among the first to develop the Utica, and with a once formidable position across the Appalachian Basin, it earned a reputation for innovation and solid well results. Chesapeake, Murchison said, had regularly been moving crews back and forth between Ohio and Pennsylvania, where it still has a large position in the northeastern part of the state. 
Click here to read that whole article (subscription required).

Wednesday, March 13, 2019

Digging Deep Into the 4th Quarter 2018 Utica Shale Production Data

The Ohio Department of Natural Resources has now released the production data from the Utica shale for the fourth and final quarter of 2018. As always, we are going to give you a look at how the numbers compare to past quarters, past years, and how they break down among the various drillers who are active in Ohio and the counties where they are drilling.  We also give you the top 10 oil and gas-producing wells of the quarter.

First, a quick note.  The ODNR news release says that there are 2,575 wells on the report and 2,241 of them reported some production.  But in examining the actual report that was released, only 2,241 total wells are listed, and 39 of those do not show any oil, gas, or brine produced.  So the numbers on this deep dive into the numbers will use what we were actually able to take from the report rather than what was listed in the news release.

PRODUCTION RATE COMPARISONS

First up, let's take a look at how the quarterly data compares from the first quarter of 2014 (which is when the ODNR began reporting quarterly data rather than one yearly report) through the final quarter of 2018. As a reminder, all oil figures are 42-gallon barrels, and all gas production is measured in MCF:


For the fourth consecutive quarter, oil production was on the rise.  In fact, the fourth quarter of 2018 saw the second-most total oil produced from shale in Ohio in any quarter over the past five years.  Of course, the production rates remained much lower than they were at their peak, although the 2,639 barrels of oil per well is the highest number since the third quarter of 2016.

Gas, meanwhile, continues to set a new peak for total production in each quarter.  Also, after a couple of quarters of production rates slowing a bit, the fourth quarter of 2018 also set new peaks for gas produced per well and per day in production.

The next table shows the production comparison year-over-year.



After trending up for the first three quarters, the strong oil production in the fourth quarter of 2018 results in a yearly total that ends the decline of the previous two years.  The 19,786,375 barrels of oil produced is the second-highest yearly total seen in the past eight years.  Gas, meanwhile, set yet another production peak and surpassed 2,000,000,000 mcf in a year for the first time.

TOP PRODUCING WELLS

Here are the top 10 oil-producing wells in quarter four of 2018:


As usual, Eclipse Resources dominates the list of the top 10 oil wells.  7 of the 10 wells are operated by Eclipse.  The Outlaw A 1H takes the top spot after being in 5th in total production during the third quarter, but the added total production isn't a surprise because that well had a production rate of 1,985 barrels per day in the third quarter and simply wasn't in production for as many days as some of the other wells on the list.

Here are the top 10 gas-producing wells from the quarter:


There's some interesting changes to this list as compared to the third quarter.  During quarter three, 9 of the 10 top gas-producing wells belonged to Ascent Resources (although Eclipse did hold the top spot with the Rolland C 5H well that was the fourth-highest producer of the fourth quarter).  In this quarter, though, Eclipse takes not only the top spot but also four more.  Ascent has four wells in the top 10, and Chesapeake Exploration sneaks into the tenth spot.

So, out of the twenty wells making up the top 10 oil producers and the top 10 gas producers, Eclipse Resources operates twelve of them.

COUNTY-BY-COUNTY

Here is the production data broken down by county:


Without much change in the well count during this quarter, some of the changes that might have been expected did not occur.  Carroll County continues to have the most wells in production by a small margin despite seeing no change to this number during the quarter.  Guernsey County continues to be the hot spot for oil, while Belmont County is the leader in total gas production and gas produced per well, although Jefferson County still edged it out in gas produced per day.  

OPERATOR-BY-OPERATOR

And here are the results broken down by operator:


Eclipse Resources now has enough wells in production that it becomes the new leader in total barrels of oil produced.  Ascent Resources continues to lead the way in total gas produced.

Also, we see Encino Acquisition Partners, which acquired all of Chesapeake Energy's Utica shale assets in Ohio, make its first appearance on the production data summary under the name EAP Ohio LLC.

ODNR Publishes 4th Quarter 2018 Utica Shale Production Data

From the ODNR:
During the fourth quarter of 2018, Ohio’s horizontal shale wells produced 5,810,484 barrels of oil and 663,534,323 Mcf (663 billion cubic feet) of natural gas, according to figures released today by the Ohio Department of Natural Resources (ODNR). 
Natural gas production from the fourth quarter of 2018 showed a 31.89 percent increase over the fourth quarter of 2017, while oil production increased 38.56 percent for the same period. 

2017 Quarter 4 (Shale)
2018 Quarter 4 (Shale)
Percentage Change
Barrels of oil
4,193,562 bbl
5,810,484 bbl
38.56%
Mcf of natural gas
503,066,907 Mcf
663,534,323 Mcf
31.89%
The ODNR quarterly report lists 2,575 horizontal shale wells, 2,241 of which reported oil and natural gas production during the quarter. Of the wells reporting oil and natural gas results:
  • The average amount of oil produced was 2,593 barrels.
  • The average amount of natural gas produced was 296,088 Mcf.
  • The average number of fourth quarter days in production was 86.
  •  
All horizontal production reports can be accessed at oilandgas.ohiodnr.gov/production.
We will have our breakdown of the data ready soon!

Good News: The Daily Digger is Sticking Around

Thanks to the support of our sponsors and feedback we've received from readers, we have decided to keep The Daily Digger blog alive.

While our monthly printed newsletter will still end with this month's March issue, you can plan to continue visiting this website for updates on the oil and gas activity in the area!

Thank you to our audience for your continued support of the blog.  We are very happy to continue serving you with the latest news and information!

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Utica Rig Count Dips During Busy Week of Permitting



New permits issued last week: 21 (Previous week: 9)  +12
Total horizontal permits issued: 3031 (Previous week: 3015 +16
Total horizontal wells drilled: 2546 (Previous week: 2535)  +11
Total horizontal wells producing: 2141 (Previous week: 2141)  +-0
Utica rig count: 14 (Previous week: 17)  -3

Wednesday, March 6, 2019

Last Days of The Daily Digger Are Counting Down

On March 31, 2019 we will stop operating The Daily Digger blog.  The March 2019 issue of The Digger energy news publication will be the last that we publish.

Throughout this month we will continue to update this page with the latest news as we have done throughout the more than 7 years that this blog has existed.

Thank you to all those that have read and supported us throughout these years.

If you have any interest in assuming control of the blog and/or print publication, please feel free to contact us by calling 330-576-4809 Ext. 115 or emailing admin@thedailydigger.com

Tuesday, March 5, 2019

ODNR Publishes Marcellus Activity Map for March 2019


The ODNR also published a map that it says is the Utica activity map for the month, but when opened it is just the Marcellus map again.  If/when that error gets corrected, we will share that map as well.

Rig Count, Wells Drilled, Wells Producing All Hold Steady in Utica Shale


New permits issued last week: 9 (Previous week: 9)  +-0
Total horizontal permits issued: 3015 (Previous week: 3006 +9
Total horizontal wells drilled: 2535 (Previous week: 2535)  +-0
Total horizontal wells producing: 2141 (Previous week: 2141)  +-0
Utica rig count: 17 (Previous week: 17)  +-0

As Wait for Final Decision Continues, Preparation for Belmont County Cracker Plant Carries On

From The Intelligencer:
Community leaders on both sides of the Ohio River want to ensure the local region is prepared if an ethane cracker plant proposed for Belmont County becomes a reality.

PTT Global Chemical America and its partner, Daelim Industrial Co., have acquired the necessary property and permits to build a petrochemical complex that could require an investment of up to $10 billion. One of the needed environmental permits has been challenged, and the companies are awaiting the results of the appeals process. There has been no official announcement yet regarding whether the plant will actually be built. 
In hopes that an announcement to that effect will come soon, Belmont County Tourism Council, Wheeling Convention and Visitors Bureau and the Greater Moundsville Convention and Visitors Bureau hosted an event Thursday at Wheeling Island Hotel-Casino-Racetrack where community members could ask questions and learn more about the proposed plant and about other communities that have experienced similar development.
Read on by clicking here. 

One NEXUS Pipeline Lawsuit Gets Tossed, Another Keeps Going

From Vorys Energy & Environmental Law Blog:
On February 21, 2019, the Sixth Circuit Court of Appeals dismissed a petition for review of air permits issued by Ohio EPA for two compressor stations to be constructed along the NEXUS pipeline in Ohio. The Court dismissed the petition for review for lack of jurisdiction, holding the environmental groups that filed the petition for review failed to establish standing. In reaching its decision, the Court highlighted that “petitioners bore the burden of establishing the irreducible constitutional minimum of standing” which requires petitioners demonstrate that they (1) suffered an injury in fact, (2) that is fairly traceable to the challenged conduct of the defendant, and (3) that is likely to be redressed by a favorable judicial decision. The Court also noted that a citizen group can establish standing on behalf of their members, but such “representational standing” requires the group to show that “its members would otherwise have standing to sue in their own right.” 
The Court held that petitioners failed to demonstrate the first element of standing – i.e. injury in fact. To demonstrate injury-in-fact, petitioners were required to “make specific allegations establishing that at least one identified member had suffered or would suffer harm.” The Court highlighted that petitioners could not rest on bare allegations to establish a concrete injury. Rather, petitioners were required to “present specific facts through citations to the administrative record or affidavits or other evidence” that at least one member of each petitioner group would suffer a concrete particularized harm from the compressor stations’ emissions.
Read more by clicking here. 

And from Law 360:
Nexus Gas Transmission LLC has shot back at Oberlin, Ohio’s challenge to FERC greenlighting a $2.1 billion pipeline, telling the D.C. Circuit there was plenty of need for the natural gas project and that the Federal Energy Regulatory Commission had properly scrutinized it. 
Nexus on Friday rebutted allegations by the city and the Coalition to Reroute Nexus that there wasn’t a real need for the pipeline — which is now in operation — because a significant portion of its capacity wasn’t under contract. Instead, available capacity provided a needed alternative for the market that enhanced competition, which is a public benefit, according to the company’s brief. 
“Petitioners argue that the amount of capacity subject to precedent agreements — 59 percent — is insufficient to support FERC’s finding of public need,” the Nexus brief said, noting that FERC cited “providing competitive alternatives” as a public benefit. “In order for a pipeline to be an available competitive alternative, it must have available capacity; thus, the commission’s policy of encouraging competition requires available capacity on new pipelines to provide an alternative to existing pipelines.”
Click here to continue reading. 

Ohio Man Charged for Making Bomb Threat to Oil and Gas Company

From the Observer-Reporter:
An Ohio man was arrested Tuesday on accusations he phoned a bomb threat last year into a company in North Strabane Township that services the Marcellus shale natural gas industry.

Township police charged Ryan Patrick Dougherty, 39, of Belmont, after determining his cellphone was used to place the call about 11:25 p.m. Nov. 16 to Myers Well Service in Eighty Four, court records show.

The threat prompted evacuations of Myers, at 40 Industry Drive, and several other nearby businesses, including the SpringHouse Market, where bakers were working the midnight shift, police stated in the affidavit.

The night supervisor at Myers answered the call, in which a man told him that half of his employees were on drugs, the court record show.

The caller didn’t like the answer he received, and he then said, “Since you don’t care, the bomb has already been planted, and at 9 a.m., the place will go up in smoke,” police stated in the affidavit.
If you'd like to read more, click here. 

Legal Dispute Over Second Lordstown Power Plant Resolved, Construction Planned

From the Youngstown Vindicator:
The first plant began operation last October after about 21/2 years of construction. 
Siderewicz and his company filed the lawsuit on behalf of the proposed second plant, known as the Trumbull Energy Center, in September 2017 asking Judge Peter Kontos to enforce the agreements the owners of the first plant signed to allow the second plant to be built. 
The owners of the first plant, known as the Lords-town Energy Center, said they were holding off on deciding whether to allow the second plant’s construction until they had time to study the impact the second plant would have on the first plant. 
Judge Kontos ruled in late 2017 that the owners of the first plant must sign an agreement related to the industrial park necessary for the second plant to proceed. An appeal of that ruling is pending.
Read the rest of that article by clicking right here.

And also from the Vindicator:
Construction of a $925 million clean-energy power plant in Lordstown should begin this summer, according to a press release issued today from Clean Energy Future, the project’s developer. 
The center is projected to have a $26 billion long-term economic impact on the Mahoning Valley economy and local and state governments, according to CEF. 
Trumbull Energy Center will be built adjacent to and just south of the $900 million Lordstown Energy Center, which CEF also developed. It went into commercial operation last October. 
Huntington Bank and Key Bank have both expressed interest in loaning debt capital to Trumbull, according to the press release issued by Bill Siderewicz, CEF’s president. 
Trumbull has all its major permits and licenses, and CEF was ready to proceed to the financing stage for Trumbull when a contract dispute arose that forced Trumbull to file suit against the adjacent Lordstown energy facility. That dispute has been settled, officials said. 
“Once funded, Trumbull will yield substantial economic benefits to Northeast Ohio and the to the people of Trumbull and Mahoning counties,” said Bill Siderewicz, CEF’s president. 
Trumbull will be a huge economic boost to the Mahoning Valley and greater-Ohio, he said. 
The immediate impact will be new construction jobs over 34 consecutive months that will peak at 950 workers, representing close to 2 million man-hours of construction effort, CEF said.
Click here to read that whole article. 

Results From Cabot's Exploratory Wells Unsatisfactory

From a Cabot Oil & Gas press release:
Fourth-quarter 2018 operating expenses (including financing) decreased to $1.87 per Mcfe, a seven percent improvement compared to the prior-year period. All operating expenses per unit were in-line with the Company's guidance for the quarter except for depreciation, depletion and amortization and exploration, driven by higher amortization of undeveloped leasehold and exploratory dry hole costs associated with unsuccessful drilling results in our exploration areas. "After further evaluation of our remaining exploration prospect, we have determined that this area is unlikely to yield results that generate long-term value creation for our shareholders," noted Dinges. "As we have said through this entire evaluation process, we remain committed to deploying capital judiciously and if a project fails to generate competitive full-cycle returns, then we will not allocate additional capital to it going forward."
The exploration area in question here is Ashland County, and it is apparent from this release and further comments during the company's fourth quarter earnings call with reporters that Cabot is not planning any more activity in the area at this time.  Read the whole press release by clicking here.