Showing posts from August, 2016

Ohio Changes Taxation of Oil and Gas Reserves

From Vorys: The Ohio Tax Commissioner recently issued a memorandum to county auditors regarding significant changes to the taxation of oil and gas reserves starting in tax year 2016.  These significant changes include: Elimination of filing forms 6 and 6A.  Values will now be based upon production volumes reported to the Ohio Department of Natural Resources (ODNR).  After hearing from industry representatives, the Ohio Tax Commissioner acknowledged that this approach may lead to higher values than statutorily permitted in some circumstances.  Accordingly, the Ohio Tax Commissioner announced a temporary fix to address this circumstance.  The new approach will overvalue oil and gas reserves in some circumstances because amounts reported to ODNR are produced amounts, whereas O.R.C. 5713.051 requires that values be based on volumes “produced and sold.”  The temporary fix is re-instatement of DTE form 6A for the limited purpose of ensuring that producers will be permitted to challe

FERC Listens to Ohio Residents Rail Against the NEXUS Pipeline

From Residents of the cities of New Franklin and Green had the opportunity to provide comments concerning the proposed NEXUS gas transmission pipeline project that would impact the two communities if the planned route remains.  Staff for the Federal Energy Regulatory Commission (FERC), the federal agency responsible for evaluating applications to construct and operate interstate gas pipeline facilities, was on hand at Green High School Aug. 18 from 5 to 10 p.m. to record verbal remarks regarding the project, specifically why local residents want the route of the project to take a more southern path.  The NEXUS pipeline, a 36-inch, 250-mile line to be developed by Nexus Gas Transmission LLC, along with Detroit-based DTE Energy Co. and Texas-based Spectra Energy Corp., is projected to transport up to 1.5 billion cubic feet of natural gas per day and would run from Kensington to Ontario, Canada, according to pipeline officials. Locally, the proposed route would go throug

Duke University Files $9.9 Million Claim Against Aubrey McClendon's Estate, Then Withdraws It

From the Wall Street Journal: Duke University said it has withdrawn a claim for about $10 million it made against the estate of oil man  Aubrey McClendon , who died before he could make good on pledges the North Carolina college said he made to his alma mater. A spokesman for the university said paperwork asking to withdraw the claim was filed on Friday in the Oklahoma City district court where the  Chesapeake Energy  Corp.  co-founder’s estate is being wound down. Records in that case show the claim was filed Aug. 12, but it was only made public last week and first reported by The Wall Street Journal. “While submitting such claims is generally a routine procedure, in this case our action was misperceived as adversarial to the McClendon family, which was never the intention,” a Duke spokesman said in an email. “Aubrey was one of our most passionate and loyal graduates, always willing to support Duke when asked. We are deeply sorry for any pain this has caused the McClendon fami

Study Finds Pollution from Fracking is Negligible When Proper Methods Are Used

From Forbes: When Governor Andrew Cuomo announced last year that hydraulic fracturing would be banned in the State of New York, he cited the lack of scientific data on public health effects. He also said more study needed to be done to determine where emissions were coming in the fracking and extraction cycle.  That study has now been done. Chemists at the University of Texas at Arlington published a study that indicates contamination from fracking wells are highly variable but result more from operational inefficiencies than from the extraction process itself.  In other words, it’s sloppy drilling methods that are the worst part of fracking.  The study, “ Point source attribution of ambient contamination events near unconventional oil and gas development ”, was published on Friday in the Science of the Total Environment. The researchers found highly variable levels of benzene, toluene, ethyl benzene, and xylene compounds (BTEX) in and around fracking sites in the Eagle Fo

Is Ascent Resources Headed for Pre-Packaged Bankruptcy?

From Bloomberg: A group of Ascent Resources-Marcellus LLC creditors is in talks with the company, a legacy of Aubrey McClendon’s American Energy Partners LP, to restructure $1.2 billion of debt, people with knowledge of the matter said.  Holders of the company’s term loans hired Moelis & Co. to advise on restructuring options, according to the people, who asked not to be identified because the talks are confidential. Cortland Capital Market Services stepped in as the new agent on the first- and second-lien loans after Citigroup Inc. resigned, the people said.  Ascent Resources-Marcellus managers told investors during a Thursday conference call that they had discussed a debt overhaul with a select group of lenders, but hadn’t hired advisers, the people said. Moelis sent a memorandum to creditors in June outlining proposals for the energy exploration and production company, but no definitive agreement has been reached, the people said. Read the whole article by clicking right

Donald Trump Set to Headline Shale Insight Conference in Pittsburgh

From The Intelligencer: Republican presidential candidate Donald Trump headlines the list of scheduled speakers for the 2016 Shale Insight Conference, set for Sept. 21-22 at the David L. Lawrence Convention Center in downtown Pittsburgh. Although drilling and fracking activity remains relatively low amid the global price slowdown, the level of activity inside the convention center will be high with Trump taking stage. The businessman from New York City is tentatively scheduled to speak at approximately 11 a.m. Sept. 22.  Trump is an outspoken advocate of fossil fuels such as coal, oil and natural gas, while he accuses Democrat Hillary Clinton of working to end their use.  “It is a great opportunity to have presidential candidate Donald Trump share his perspectives on the oil and gas industry at this year’s Shale Insight Conference. The oil and natural gas industry is a driving force of the American economy and will be an impactful topic this election,” said Shawn Bennett, exec

Focus in Utica Shale Shifts Towards Dry Gas

From NGI: The buildout of gathering infrastructure in the Utica Shale's dry natural gas window of Southeast Ohio has remained robust over the last year as the midstream has worked to stay ahead of, and in some cases fallen behind, operators that have flooded a three-county region.  Natural gas production in the Appalachian Basin has remained resilient to the commodities downturn, continuing to grow at a time when volumes across the rest of the country have bottomed out. Unlike their counterparts, the Northeast shale plays are once again poised for year/year growth.  While a wholesale shift to dry gas production hasn't occurred across the basin, many of its leading operators have been more focused on it, particularly in Monroe, Belmont and Jefferson counties, OH. Lower breakevens, better local markets for some and a shallower Utica target compared to other locations in the basin have increasingly attracted more companies to Ohio's dry Utica (see Shale Daily, April 7 )

New Study Attempts to Link Fracking to Health Problems

A new study has been released which concludes that shale drilling activity can be linked to increased occurrences of migraines, fatigue and chronic sinus symptoms.   Not surprisingly, pro-drilling and anti-drilling media outlets have resulted in very different reporting on this study. Here is how the study was reported on by StateImpact Pennsylvania , a consistently anti-drilling outlet which receives funding from anti-drilling organizations: A new study published today in the peer-reviewed journal Environmental Health Perspectives shows an association between living near heavy gas drilling activity and common ailments like chronic nasal and sinus symptoms, severe fatigue, and migraines. The report is part of an ongoing collaboration between the Geisinger Health System and Johns Hopkins Bloomberg School of Public Health.  “These three health conditions can have debilitating impacts on people’s lives,” says Aaron W. Tustin, MD, MPH, a resident physician in the Department of En

Obama Energy Secretary Sings Praises of Fracking's Effect on Environment

From the Federalist: Hydraulic fracturing, a process more commonly referred to as fracking, is actually good for the environment, Energy Secretary Ernest Moniz said at a field hearing in Seattle last week, according to the Washington Examiner .  “The increased production of oil and natural gas in the United States has, obviously, been a major story in terms of our economy, and also our environment,” said Moniz, who previously served as the head of the Physics department at the Massachusetts Institute for Technology, earned a doctorate degree in physics from Stanford University.  “The natural gas boom, in particular, has led to the displacement of high-carbon coal with low-carbon natural gas producing fewer emissions,” Moniz reportedly said during the Seattle field hearing. Click here to continue reading the article. Connect with us on Facebook and Twitter! Follow @EnergyNewsBlog

Three Technological Developments Are Changing the Oil and Gas Sector

From KPMGVoice: Energy prices may be low, but that hasn’t stopped new technologies from shaking up the oil and gas business.  Three developments in particular are starting to have an impact on the industry: the “internet of things,” digital labor and platform companies.  Here’s a look at what they are and how they are changing the energy business.  Internet of Things   Despite its cosmic-sounding name, this simply describes how machines, devices and software interact, or “talk” to each other, without human involvement. Click here to continue reading. Connect with us on Facebook and Twitter! Follow @EnergyNewsBlog

Study: Utopia East Pipeline Would Generate $237 Million for Local Economy Over First 5 Years

From The Toledo Blade: A Kent State University report being released Tuesday will show that the proposed $500 million, 240-mile Utopia East pipeline will generate $237.3 million over its first five years for Ohio’s economy.  Results of the study were announced by Allen Fore, Kinder Morgan vice president of public affairs, during a noon luncheon speech hosted by the Rotary Club of Toledo. Held downtown at the Park Inn, the event was attended by about 200 people.  Mr. Fore told The Blade after his presentation that Kinder Morgan, North America’s largest pipeline company and the one behind the Utopia East project, hired two Kent State economics researchers to do the economic-impact study.  The breakdown includes a projected $144.9 million in new jobs, income, and local spending; $87.5 million in Ohio residents’ earnings, and $4.9 million in tax revenues. The project is expected to create 2,132 new and indirect jobs, about 900 of which would be construction jobs in 2017. Click he

Op-Ed Makes Case For Fracking as a Key to Fight Against ISIS

From News & Observer: Over the past half century, groups bent on ideological domination have intentionally murdered unarmed civilians, including pregnant woman and children, using among other things suicide bombers. Those are true acts of terrorism.  I find it distasteful and dishonest when environmental extremists attack energy technologies by referring to them as “terrorism.” Such is the case with hydraulic fracturing or fracking. What I find truly repugnant are the politicians whose periodic security and economic briefings inform them of the benefits of fracking yet who remain silent or encourage the branding of an energy technology, equating it with the slaughter of innocents.  Fracking is helping to defeat terrorism. Our politicians have been told that fracking is reducing the price of oil. By making global oil prices lower, fracking is hurting ISIS and other terrorist groups that are known to sell the oil they have captured on the black market to fund their activities,

Big Investors Are Getting Back Behind Oil Producers

From Business Insider: Wall Street's smart money is falling back in favor with the beaten-down energy sector. Large private-equity investors moved to the sidelines of energy-related corporate debt as the price of crude oil fell.  These days, however, they are doing the due diligence that precedes making big deals on the sector's continued recovery, according to Thomas McNulty, a Houston-based director in the valuations and financial risk management practice at Navigant.  These players are observing what may be a bottoming in the oil crash.  Oil-field services companies, which were hardest hit by the oil downturn, are a good indicator for how the broader industry is turning, according to McNulty. Read more by clicking here. Connect with us on Facebook and Twitter! Follow @EnergyNewsBlog

Harold Hamm Warns Hillary Clinton Would Kill the Oil and Gas Industry as President

From NGI: Continental Resources Inc. founder Harold Hamm, an unabashed supporter of GOP presidential nominee Donald Trump, on Tuesday warned a Denver audience in a provocative speech that Democrat Hillary Clinton, if elected in November, would doom the U.S. oil and natural gas industry.  Hamm, who was Mitt Romney's energy adviser in his failed presidential bid in 2012, was named to Trump's economic advisory panel earlier this month (see Shale Daily, Aug. 5 ). Trump last month surprisingly embraced local control over fracturing (fracking) in horizontal drilling during an exchange with a television reporter -- even though his energy agenda calls for more U.S. production. The hot button issue, which could be on the ballot in Colorado in November, is roundly opposed by the oil and gas industry (see Shale Daily, Aug. 23 ).  "I'm in favor of fracking, but I think that voters should have a big say in it," Trump said in July. "I mean, there's some areas, m

Analyst: Oil Prices Poised for Strong Rebound in 2017

From August 11, 2016 may be the point in this oil price cycle that will mark the start of a sustained increase in crude oil prices. That’s the date that the International Energy Agency (IEA) published their forecast that demand for oil would exceed supply in the 3rd quarter. Shortly after the IEA’s Oil Market Report came out, the Saudi Energy Minister Khalid al-Falih said the kingdom would work with other producers to stabilize the market. Tighter supply and OPEC willing to curb production growth is a recipe for higher oil prices.  When you step back and look at a longer time frame, it is clear that this oil price cycle which started in mid-2014 bottomed in February, 2016. The most recent pullback that started late in June and continued through early August was just the speculators overplaying their hand on the short side. The brief dip below $40/bbl did not get close to the double-bottom in February. Remember what oil prices have never moved up or down for an extend

Report: Earthquakes Linked to Less than One Percent of All U.S. Injection Wells

by Katie Brown, Energy in Depth Fewer than one percent of wastewater injection wells across the United States have been potentially linked to induced seismicity, according to a  new report  by Energy In Depth. The report, entitled “ Injection Wells and Earthquakes: Quantifying the Risk ,” consults data from the U.S. Geological Survey (USGS) and several peer-reviewed studies to examine the number of injection wells that have been suspected as causing earthquakes, compared against the total number of operating injection wells. The report includes breakout statistics for several states as well, including  Oklahoma ,  Texas ,  Colorado ,  New Mexico ,  Ohio ,  Kansas , and  Arkansas . Below are the key findings, by the numbers: Total number of U.S. disposal wells – 40,000 (approx.) Number of U.S. disposal wells potentially linked to seismicity – 218 Percentage of U.S. disposal wells potentially linked to seismicity – 0.55% Percentage of disposal wells operating without seismicity

Ashtabula Refinery Plans Put on Hold

From the Star Beacon: Plans for the proposed Ashtabula Energy refinery on Lake Road have been put on hold to defer cost, according to company officials.  The proposed $200 million industrial processing plant in Ashtabula would have converted Marcellus and Utica shale natural gas to diesel fuel, lubricants, solvents and waxes and created about 40 permanent, full-time jobs, company officials have previously said. Ashtabula Energy is a division of Velocys, whose officials had said the project would mean 400 temporary jobs to build the plant.  "Our recent analysis has confirmed that the wax market in North America and the projected plant economics remain attractive, but given the challenges in raising equity for capital projects of this nature at present and in order to defer costs, it was prudent to hold the project, pending reassessment," CEO David Pummell said in a statement. Velocys officials could not be reached for further comment Friday. Read more by clicking here.

Utica Rig Count at 14 as 5 New Permits Are Issued Last Week

The latest permitting update from the Ohio Department of Natural Resources show that five new permits were issued across four different counties last week.  Two were for wells in Jefferson County, while Belmont, Guernsey and Monroe each saw one new permit. The cumulative totals now stand at 2217 wells permitted, 1776 drilled, and 1390 producing.  The Utica rig count is at 14. View the report below or by clicking here. Connect with us on Facebook and Twitter! Follow @EnergyNewsBlog

OPEC on Course For Output Freeze, Former Chief Says

From Fuel Fix: OPEC is on course to strike an output-freeze deal with fellow oil producers in Algiers next month because its biggest members are already pumping flat-out, the group’s former president said.  While a similar initiative failed in April, an agreement can now be reached as Saudi Arabia, Iran, Iraq and non-member Russia are producing at, or close to, maximum capacity, Chakib Khelil said in a Bloomberg Television interview. Khelil steered OPEC in 2008, the last time it implemented an output cut, which was announced in Algeria in December of that year. In a separate interview, former Qatari Energy Minister Abdullah bin Hamad al-Attiyah was convinced there is a need for an accord.  “All the conditions are set for an agreement,” Khelil said from Washington. “Probably this is the time because most of the big countries like Russia, Iran, Iraq and Saudi Arabia are reaching their top production level. They have gained all the market share they could gain.” Click here to rea

The Buy Signal for Oil Is In

Source: Jack Chan  (8/20/16) Technical analyst Jack Chan documents a major new buy signal for oil stocks and ETFs that will enable investors to hold for the long term. $OSX has confirmed a new major buy signal, which can last for months and years. Speculation has now confirmed a pullback bottom; expect new recovery highs in coming weeks and months. The bottoming process continues with a breakout imminent. For the OIH, the upside price target is 55. For the XLE, the upside price target is 95. For the, the upside price target is 20. Subscribers were advised to diversify into USD beginning in 2011, as the loonie topped. The Canadian dollar is now a buy, and investors can scale in for the long term. Summary With a new major buy signal in place and the cycle having bottomed, investors can cost average in on

Analysts: Oil Industry is on a Bumpy Road to Recovery

From NGI: While it seems the natural gas and oil industry is convinced that the worst is over and markets are on their way to a comeback, the only certainty is that the road to recovery is going to be a long, bumpy one.  “The main reason natural gas producers, in particular, think the market has hit a bottom is that all the reduction in rig activity is finally catching up to the market,” said NGI’s Patrick Rau, director of strategy and research.  High-grading, drilling longer laterals and reducing the drilled but uncompleted (DUC) inventory will only go so far. Eventually, the impact from the severe decline in drilling will become evident, especially when so many of the rigs that have been laid down are horizontal, Rau said.  “Horizontal wells tend to have hyperbolic decline, meaning so much production occurs in the first few years of the well. If you don't keep drilling those, the industry misses out on that initial surge of production, which is starting to be reflected i

Methane "Hot Spot" Linked to Natural Gas Leaks by NASA

From EcoWatch: The National Aeronautics and Space Administration (NASA) released a new study Monday examining what caused a methane "hot spot" to form in New Mexico. This new study of methane emissions generated by the oil and gas industry in the state's San Juan Basin is a major step forward in understanding the causes of New Mexico's methane "hot spot." It follows up on a 2014 satellite-based study that initially found the "hot spot" and sought to identify its specific causes.  The NASA study found that roughly 50 percent of basin-wide methane emissions come from more than 250 very large polluters that were detected by intensive NASA aerial surveys and ground crews. According to the authors, this finding confirms researchers' earlier speculation that most of the basin's methane emissions are related to natural gas extraction and coal mining.  But this is only half of the story as the study did not determine the source of the rem

Stark State College to Receive Over $500,000 From State for Shale Education

From Crain's Cleveland: There is still some life in the shale gas boom down in Canton — at least for Stark State College.  The school, which has been training workers for the oil and gas industry for several years and opened a well-site training center in 2014, has received $506,483 in state education funds to provide its “ShaleNET” education and training to students at Eastern Gateway Community College and Hocking College.  “The Ohio Department of Higher Education selected the ShaleNET Share project for funding because it meets Gov. John Kasich’s higher education strategy of promoting educational excellence and economic efficiency and stabilizing or reducing student tuition rates at colleges and universities,” Stark State said in a news release. Read more by clicking here. Connect with us on Facebook and Twitter! Follow @EnergyNewsBlog

Analyst Lists Chesapeake Energy as Top Company on List of Those Dominating the Utica Shale

From The Motley Fool: The late  Chesapeake Energy   ( NYSE:CHK )  co-founder and CEO Aubrey McClendon once said that the Utica shale would be the "biggest thing economically to hit Ohio, since maybe the plow." While it has not turned out to be that big, it is the second largest shale-gas play in the country by production. That is remarkable, considering that Chesapeake didn't drill the first well in the Utica until 2011.   The Utica shale 101   While Ohio is the center of the Utica drilling boom, the shale itself underlies not just eastern Ohio, but also most of West Virginia and Pennsylvania, as well as parts of New York, Virginia, and Maryland:   IMAGE SOURCE: THE U.S. ENERGY INFORMATION ADMINISTRATION.   Given the sheer size of the resource, McClendon once called the Utica a "half-trillion dollar" opportunity for Ohio. While it might never hit that level of economic output, it has fueled remarkable growth in the state's oil and gas production. L

Science Advisors Uphold EPA’s Topline Conclusion of “No Widespread, Systemic Impacts”

by Katie Brown, Energy in Depth At long last, the Hydraulic Fracturing Panel of the Environmental Protection Agency’s (EPA) Science Advisory Board (SAB) has released its  final recommendations  on EPA’s landmark groundwater study, and anti-fracking activists hoping for a damning report on EPA’s primary conclusion are likely to be disappointed. The panel does not ask EPA to modify or eliminate its topline finding of “no widespread, systemic impacts” to groundwater from fracking – it asks EPA to provide more details or a “quantitative analysis” of how the agency came to that conclusion. From the recommendations, “EPA should provide quantitative analysis that supports its conclusion that hydraulic fracturing has not led to widespread, systemic impacts on drinking water resources . Twentysix of the 30 members of the SAB Panel concluded that the statement also requires clarification and additional explanation…” (emphasis added) Here are the most important things to know as you re