Showing posts from October, 2016

Oil and Gas Producers Inching Towards Tapping "Drilled But Uncompleted" Wells

From the Wall Street Journal: U.S. oil and gas companies have drilled thousands of wells they have yet to tap, creating a ready reserve of fuel that could surge onto the market when energy prices recover.  As producers report quarterly earnings during the next few weeks, a question looms: When will they start exploiting these “drilled but uncompleted” wells?  While the industry often has an inventory of drilled wells awaiting completion, the backlog has grown significantly during the past two years as companies such as  Continental Resources Inc. and EOG Resources Inc. deliberately delayed tapping wells to wait for higher energy prices. Read more by clicking here. Connect with us on Facebook and Twitter! Follow @EnergyNewsBlog

Even as Activity Has Slowed, Ohio Continues to Feel Benefits of Shale Boom

From the Marietta Times: At times over the past few years it may have felt like Ohio’s shale revolution was over before it had even begun. The number of drilling rigs exploring for oil and natural gas has fallen by more than 70% over the last two years. Some energy companies even called it quits or faced bankruptcy. But make no mistake, the shale revolution has continued and it’s having an extremely positive impact on the state. The number of rigs drilling for oil and gas in Ohio’s Utica shale is just a third of what it was in 2015, but overall production continues to grow. Monthly natural gas production has increased from just 0.1 billion cubic feet per day (Bcf/d) at the close of 2012, to more than 3.5 Bcf/d in June of this year.  Energy companies in Ohio have gotten very good at what they do. The amount of natural gas produced from each new Utica well is now six times what it was for a well drilled in 2012. Ohio’s shale industry has proven its staying power.  We have now ente

OOGA Representative Anticipates Increased Activity in Columbiana County

From the Morning Journal: It may only be a matter of time before oil and gas activity increases again in Columbiana County.   That was the message delivered by Mike Chadsey, director of public relations for the Ohio Oil and Gas Association, who attended this week’s Columbiana County Port Authority meeting. He said oil and gas prices drive the market, and as those prices increase, so will drilling development in the county, he told the board during a brief presentation.   The county was among the first in Ohio to experience a leasing boom in 2010 from companies wanting to drill for oil and natural gas in the region’s Utica shale reserves. Leasing activity continued until about 2013, followed by development, but all of that began to slow considerably after the increased supply resulted in a sharp decline in oil and gas prices,   “There were some things Columbiana County could not control,”  such as the drop in prices, he said. The whole article can be read by clicking here.  C

Bill to Protect PA Landowners from Royalty Schemes Appears to be Dead For Now

From StateImpact Pennsylvania: A bill aimed at addressing allegations natural gas drilling companies are cheating Pennsylvania landowners out of royalty money appears to be dead this legislative session.  HB 1391 was introduced following years of complaints some drillers charge exorbitant fees for processing gas. In Pennsylvania’s northern tier, people have received notices their royalty account has a negative balance , saying they owe thousands of dollars to drillers.  “I’m very disappointed for the landowners,” says the bill’s prime sponsor Garth Everett (R- Lycoming). “All we were asking for was a chance to get it to the floor.”  The measure was scheduled for second consideration in the state House earlier this week, but did not come up for a vote. It reappeared again on Monday’s calendar, but House GOP spokesman Steve Miskin said Friday afternoon it’s been pulled from the schedule.  “Everybody has been diligently trying to come up with a fair resolution. There’s not a s

Stone Energy Will File for Pre-Packaged Bankruptcy

From Offshore: Stone Energy has announced steps toward filing for Chapter 11 bankruptcy protection by Dec. 9, according to a report in The Daily Advertiser in Lafayette.  Spokeswoman Jennifer E. Mercer said that Stone, burdened with more than a billion in debt during a lingering downturn in energy prices, will sell its holdings in Appalachia for $350 million and has made agreements with senior bondholders, creditors and others to restructure its operations.  “The company will continue to work,” Mercer said. “Stone is open for business and operating. People are showing up and working and getting paid; customers are being served. This will have no impact on day-to-day business.”  Mercer said the company and other parties involved have developed a pre-packaged reorganization plan, which should help Stone navigate Chapter 11 proceedings and “come out on the other side,” perhaps as early as mid-2017. The agreement would relieve the company of some $850 million in debt and reduce i

Obama Administration Sides with Activists on Methane Rule, Moves to Put Small Producers out of Business

by Katie Brown, Energy in Depth The Obama administration has released its  final Control Techniques Guidelines (CTG)  for oil and gas production, and  as we’ve noted before , it is officially going through with its plan to eliminate an exemption for low producing oil and gas wells (marginal wells), even though it originally intended to exempt these wells due to the enormous economic consequences and the fact that their emissions are negligible. It was this elimination of the exemption for marginal wells specifically, which caused the anti-fracking group, Clean Air Task Force (CATF), to praise EPA.  As  Politico   reported yesterday  after the decision was made official, The green group Clean Air Task Force praised EPA for removing an exemption for lower-producing wells from the draft guidelines it released earlier this year. The final version of the rules, still not officially posted on EPA’s website, seeks more data on those lower-producing wells before deciding how to proceed

9 New Permits Issued for Utica Shale Drilling as Rig Count Declines Again

The Ohio Department of Natural Resources permitting report for last week shows that nine new permits were issued for Utica shale drilling, all of them for wells in Belmont County.  Eight of the nine permits were for Rice Energy wells, with the remaining one going to Ascent Resources. Meanwhile, the rig count continued its decline for the third straight week, falling to 16. There are now 2,277 permits issued, 1,834 wells drilled, and 1,414 wells producing. View the report below or by clicking here . Connect with us on Facebook and Twitter! Follow @EnergyNewsBlog

New Study: Probability of Environmental Impacts from Fracking Chemicals is Low

From Duke University: Naturally occurring brines, not man-made fracking fluids, account for most of the wastewater coming from hydraulically fractured unconventional oil and gas wells, a new Duke University study finds. “Much of the public fear about fracking has centered on the chemical-laden fracking fluids -- which are injected into wells at the start of production -- and the potential harm they could cause if they spill or are disposed of improperly into the environment,” said Avner Vengosh, professor of geochemistry and water quality at Duke’s Nicholas School of the Environment.  “Our new analysis, however, shows that these fluids only account for between 4 and 8 percent of wastewater being generated over the productive lifetime of fracked wells in the major U.S. unconventional oil and gas basins,” Vengosh said. “Most of the fracking fluids injected into these wells do not return to the surface; they are retained in the shale deep underground.  “This means that the probab

Ohio Anti-Fracking Ballot Measures Face Strong Community Opposition in November

by Jackie Stewart, Energy in Depth With  83 percent  of anti-fracking ballot measures in Ohio having failed or been ruled invalid by various courts, it’s certainly fair to say that the Community Environmental Legal Defense Fund (CELDF) has been marginalized. However, despite the onslaught of defeats, CELDF continues to abuse Ohio cities by pushing anti-fracking ballot measures on them. On Election Day two cities, Youngstown and Waterville, will vote on the so-called Community Bill of Rights.  In response, coalition groups comprised of business leaders, elected officials, and unions are organizing to defeat the measures. In other words, CELDF will once again face strong opposition. Here’s what you need to know about both ballot measures: City of Youngstown Issue 4: Community Bill of Rights Five Times Failed, CELDF Abuses Voters for Sixth Time If at first you don’t succeed, try six times? That’s the story in Youngstown, where voters will go to the ballot for the sixth consec

Rice Energy Closes on Acquisition of Vantage Energy

From a Rice Energy press release: Rice Energy Inc. (NYSE: RICE ) ("Rice Energy") announced today that it has completed the previously announced acquisition of Vantage Energy, LLC and Vantage Energy II, LLC (collectively, "Vantage"). In connection with the closing, Rice Energy has completed the sale of the acquired Vantage midstream assets to Rice Midstream Partners LP (NYSE: RMP ) ("Rice Midstream Partners").  With this acquisition, Rice Energy now controls approximately 231,000 net acres in the Marcellus and Ohio Utica Shale cores with an inventory of 1,164 drilling locations. Similarly, Rice Midstream Partners possesses one of the largest and most concentrated core dry gas acreage dedications in Appalachia, covering approximately 199,000 acres in Washington and Greene Counties. Read the whole release by clicking here. Connect with us on Facebook and Twitter! Follow @EnergyNewsBlog

Ohio First Responders Get Prepared for Emergencies at Shale Safety Institute 2016

From The Daily Jeffersonian: For the third year in a row, Belmont College welcomed local first responders to Shale Safety Institute 2016, a partnership between Belmont College and Hess Corporation. More than 40 fire and EMS stations were represented at the event which was designed to prepare local emergency agencies to respond in emergency situations, including incidents in the oilfield in a safe and confident manner. “Energy development in the Ohio Valley has presented many great opportunities, including a stronger local economy and incredible advancements and research. With this development has also brought a heightened awareness regarding safety issues.” said Dr. Paul Gasparro, Belmont College president.  He went on to say, “We are so grateful to Hess Corporation for their commitment to the local community and our first responders. Through the Shale Safety Institute, first responders and emergency service personnel are receiving the highly relevant training and education they

Gulfport Energy Corporation Provides Third Quarter 2016 Operational Update and Schedules Third Quarter 2016 Financial and Operational Results Conference Call

OKLAHOMA CITY, Oct. 17, 2016 (GLOBE NEWSWIRE) -- Gulfport Energy Corporation (NASDAQ:GPOR) (“Gulfport” or the “Company”) today provided an operational update for the quarter ended September 30, 2016 and scheduled its third quarter financial and operational results conference call.  Key information for the third quarter of 2016 includes the following: Net production averaged 734.1 MMcfe per day, a 13% increase over the third quarter of 2015 and a 10% increase versus the second quarter of 2016, exceeding Gulfport’s previously provided third quarter of 2016 guidance of 685 MMcfe per day to 705 MMcfe per day. Realized natural gas price, before the impact of derivatives and including transportation costs, averaged $2.10 per Mcf, a $0.71 per Mcf differential to the average trade month NYMEX settled price. Realized oil price, before the impact of derivatives and including transportation costs, averaged $41.81 per barrel, a $3.13 per barrel differential to the average WTI oil price. Real

U.S. Oil Output on the Rebound as Rigs Spring Back into Action

From Bloomberg: Increased drilling by shale producers buoyed by higher prices will slow the decline in U.S. crude production, a government forecast showed.  The Energy Information Administration raised its outlook for U.S. crude production next year, which now is estimated to fall 1.6 percent from 2016, compared to the 3 percent decline it predicted last month in its monthly Short-Term Energy Outlook. The forecast released Thursday takes into account a surge in drilling activity as crude prices rose 90 percent from lows in February.  "There’s growing optimism about shale, especially in the Permian basin," said Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts. "It’s the dog that didn’t bark." The agency boosted its domestic output forecast for next year to 8.59 million barrels a day from 8.51 million projected in September, according to the data. It cut its 2016 forecast to 8.73 million barrels a day from 8.77 m

EIA Releases Latest Drilling Productivity Report

Each month the US Energy Information Administration releases its Drilling Productivity Report.  The latest can be viewed at the EIA site by clicking here, although most of the relevant information is contained below. Connect with us on Facebook and Twitter! Follow @EnergyNewsBlog

Despite Huge Fundraising Flop, CELDF Still Pushing for More Lawsuits in Ohio

by Jackie Stewart, Energy in Depth The Community Environmental Legal Defense Fund (CELDF) has had a really tough year in Ohio, losing almost every attempt they have made at anti-fracking ballot measures. Despite this fact, the  Community Environmental Legal Defense Fund (CELDF)  continues to abuse Ohio taxpayers with frivolous lawsuits in an attempt to try to manipulate Ohio laws and place unenforceable measures on local ballots. But if their last fundraiser is any indication, their efforts aren’t exactly popular with Ohioans. Take a look at the recent $28 per plate CELDF fundraiser in Athens, Ohio, which only had two attendees and three people interested, according to Athens anti-fracking  Facebook page . It’s not difficult to see why considering that the group’s Ohio organizer Tish O’Dell was caught  saying , “If we know the law is wrong, why are we obedient?”  In other words, if you do not agree with a law—any law—the recourse is simply to disobey that law. While they wou

Permitting Slows and Rig Count Declines Again on Latest ODNR Report

The Utica rig count dropped for the second straight week on the latest permitting update from the Ohio Department of Natural Resources.  After going over 20 for the first time all year two weeks ago, the latest report shows that the rig count is back down to 17. There were also just two new permits issued last week, both in Belmont County. 2,268 wells are now permitted, 1,827 are drilled, and 1,413 are producing. View the report below or by clicking here . Connect with us on Facebook and Twitter! Follow @EnergyNewsBlog

Video Tells Story of How Chesapeake Energy is Cheating PA Landowners

We have mentioned in the past on the blog how Chesapeake Energy has been drastically reducing royalties paid to leaseholders by deducting huge post-production costs.  As ProPublica reporter Abrahm Lustgarten detailed in a 2014 article , Chesapeake formed Access Midstream and then sold it's pipelines to Access for nearly $5 billion.  In return, Access was guaranteed to transport the gas Chesapeake extracted at exorbitant rates, the cost of which were then passed on to landowners.  As Lustgarten put it: While the precise details of Access’ pricing remains private, immediately after the transactions Access reported to the SEC that it collected more money to move each unit of gas, while Chesapeake reported that it also paid more to have that gas moved. Access said that gathering fees are its predominant source of income, and that Chesapeake accounts for 84 percent of the company’s business.  What’s more, SEC documents show, Chesapeake retained a stake in the gathering process. Whi

10/15/16 Links of the Day: New Study From OSU, 6 Cracker Plants in Appalachian Basin?, and More

Seeking Alpha:   Marcellus Asset Valuation Moving Higher   -    "Last week, Rice Energy (NYSE: RICE ) acquired Vantage Energy, a private operator owned by Quantum Energy Partners, Riverstone Holdings and Lime Rock Partners for a total of $2.7 billion. The acquisition is interesting as it represents an uptick in..."   OSU Will Study Impact of Gas Pipeline Construction on Agricultural Fields   -    "Ohio State University will launch a study this fall in conjunction with a planned $500 million, 215-mile petroleum pipeline from Harrison County in Eastern Ohio to the Michigan border. The Utopia East pipeline project will transport 50,000 barrels a day of ethane and ethane-propane mixtures for..." Marcellus Drilling News:   Multiple Lawsuits Against Chesapeake for Alleged Securities Fraud   -    "These lawsuits are new and stem from the recent announcement that the U.S. Department of Justice, Securities and Exchange Commission and even the U.S.

Natural Gas Prices Hit Highest Point in Nearly Two Years

From U.S. natural gas futures spiked to the highest level since January 2015 on Monday, as the outlook for a colder winter boosted demand expectations for the heating fuel.  Natural gas for delivery in November on the New York Mercantile Exchange rose nearly 2% to a daily peak of $3.256 per million British thermal units, a level not seen since January 15, 2015.  It was last at $3.253 by 10:40AM ET (14:40GMT), up 6.0 cents, or 1.88%.  There will be no floor trading on the Nymex on Monday because of the Columbus Day holiday in the U.S. All electronic transactions will be booked with Tuesday's trades for settlement.  On Friday, the November natural gas contract surged 14.4 cents, or 4.72%, after updated weather forecasting models pointed to unseasonably cold temperatures across the northeastern and north-central U.S. through October 20. Read the whole article by clicking here. Connect with us on Facebook and Twitter! Follow @EnergyNewsBlog

Chesapeake Energy Continues Maneuvering in Efforts to Improve Cash Flow, Reduce Debt

From Reuters: U.S. natural gas producer Chesapeake Energy Corp closed a private placement of $1.25 billion of debt on Wednesday, shoring up capital for debt repayment 10 months after it said it had no plans to file for bankruptcy.  Chesapeake, struggling with a huge pile of debt taken for shale development, said it could convert the 10-year notes to equity in three years if its stock trades above 130 percent of the conversion price for a specified period.  The company also said it exchanged its common shares for preferred shares representing about $1.2 billion of liquidation value, at a discount of over 40 percent. "Through the transactions that closed today, we have substantially improved our capital structure," said Chesapeake Chief Executive Doug Lawler. Read more by clicking right here. Connect with us on Facebook and Twitter! Follow @EnergyNewsBlog

Waterville Group Seeking Ordinance to Block NEXUS Pipeline

From The Blade: A citizens group in Waterville is trying to establish a community bill of rights to force a proposed gas pipeline to be rerouted out of the city.  Protecting Air for Waterville collected more than 400 signatures to put Issue 3 on the ballot. The NEXUS pipeline would cross the Maumee River in Waterville. A compressor station would be built in Waterville Township.  The ordinance would ban gas infrastructure inside city limits.  “A station of this size is not typically put this close to a populated area,” PAW spokesman Kelly Jacobs said. “So it has everyone concerned about emissions.” Click here to read the entire article. Connect with us on Facebook and Twitter! Follow @EnergyNewsBlog

OPEC Agreement to Slow Oil Production is Showing Some Cracks

From Forbes: This has to trouble OPEC, and mostly Saudi Arabia, who has been trying to micromanage global oil prices over the past few weeks with announcements to agree to agree to production cuts at OPEC’s next meeting in November.  There is even talk that Iran, who is still trying to reach pre-sanctions production levels, would actually not have to cut production as part of the deal, as well as a potential waiver for both Nigeria and Libya.  Russia is also reportedly going to meet with OPEC members in a meeting in Istanbul this week over possible production cuts.  However, Iraq could increase its oil production despite OPEC’s recent announcement. Iraq’s oil minister, Jabar Ali al-Luaibi, has urged oil and natural gas producers operating in the country to continue increasing output for the rest of the year and in 2017, Iraq’s oil ministry disclosed on Sunday. Click here to read more. Connect with us on Facebook and Twitter! Follow @EnergyNewsBlog

Utica Rig Count Declines on Latest ODNR Report

After hitting its highest level in 2016 in the week ending October 1, 2016, the Utica shale rig count dropped back down to 19 on the latest report from the Ohio Department of Natural Resources. Further, 6 new permits were issued last week.  3 went to Rice Drilling for wells in Belmont County, and 3 were issued to Antero Resources for Noble County sites.  There are now 2,266 permits issued, 1,822 wells drilled, and 1,409 wells producing. View the report below or by clicking here . Connect with us on Facebook and Twitter! Follow @EnergyNewsBlog

Unions Pack the House In Support of Ohio Pipeline

by Jackie Stewart, Energy in Depth As EID has continued to  highlight , unions have been speaking out against the Keep It in the Ground movement. As the war between fringe anti-fracking extremists and unions wages nationwide, in Ohio, local men and women are standing their ground to fight for jobs. These jobs consist of the “900 local union construction jobs”  promised  to Ohioans from Kinder Morgan, as part of their Utopia East pipeline, which is a $500 million project to transport ethane and propane from eastern Ohio to the Ohio/Michigan border. In response to the news that the pipeline would be coming to Ohio, men and women of Laborer’s (Local 500), Operating Engineers (Local 18), and the Plumbers and Pipefitters (Local 798) packed the house at a recent Environmental Protection Agency (EPA) hearing on a water quality certification in Harrison County in support of the pipeline. The audience at the forum was about 99 percent made up of union members who wanted to see the projec

Analysts: Oil Rally is Here, But Don't Expect it to Last

From Morningstar: Crude markets have tightened a good deal in recent months, as strong demand growth and supply issues have pulled forward industry recovery by about a year, relative to our previous outlook. Fundamentals after 2017 are looking particularly bullish for prices, and an oil price rally in 2018 is looking more likely.  Industry conditions begin to look much stronger post-2017, as a collapse in new nonshale capacity additions and growing demand could lead to meaningful supply shortages. We are increasingly bullish on oil prices rallying in the medium term, and have raised our WTI forecast to $65/bbl for 2018, which is the level we believe is required to drive a large-scale recovery in U.S. shale activity. Even so, the strength of U.S. shale is lurking beneath the surface: Our analysis shows that the recent uptick in rigs and falling shale decline rates together are enough to stabilize U.S. crude production within six months. Remarkably, if activity isn't scaled back

Shale Producers Rush to Hedge 2017 Prices During Oil Rally

From Bloomberg: Independent oil companies are using the post-OPEC rally to hedge their price risk for next year, banks and consultants said, a trend that’s likely to be viewed with concern from Saudi Arabia to Venezuela.  The clamor to hedge -- locking in future cash flows and sales prices -- could translate into higher U.S. oil production next year, offsetting an output cut that the Organization of Petroleum Exporting Countries outlined in Algiers last week. Shale firms in particular would enjoy extra income to pay for additional drilling.  “We are seeing significant producer flows which early estimates suggest could be the highest we have seen all year,” Adam Longson, commodity strategist at Morgan Stanley in New York said in a note to clients. The whole article can be read by clicking here. Connect with us on Facebook and Twitter! Follow @EnergyNewsBlog

Engineer: Renewables Aren't Ready for Keep-It-In-the-Ground Movement to Be Practical

From Gas & Oil: As an engineer and retired business leader, I believe that renewable energy and energy conservation are important for meeting our long term energy needs, especially if they can reduce dependence on oil imports that drain U.S. financial wealth and enrich countries that are not necessarily friendly allies.  I also believe that climate change is real. In fact, scientific evidence shows that the earth’s climate has changed continually since the beginning of time, with both warming and cooling cycles. However, I am not convinced that scientific evidence proves that the current climate change cycle is caused by humans or by the use of fossil fuels. But that debate is not the primary objective of this article.  Natural gas and oil production from every well – big and small - declines rapidly with time. In as little as one or two years, production typically declines to a small fraction of what it was originally. Therefore, new reservoirs must be discovered and new we

Is Natural Gas Much More Than Just a Bridge Fuel?

From Oil & Gas 360: It’s time to overstate the obvious: the wide range of uses for natural gas makes it a critical resource for the United States and world economies.  Natural gas is used in an amazing number of ways. Although it is widely seen as a cooking and heating fuel in most U.S. homes, natural gas has many other energy related and raw material uses. It can be used as a vehicle fuel, it can power pipelines and infrastructure for the purpose of transporting natural gas or oil, and is widely prevalent in industrial use as a raw material. Natural gas is an ingredient used to make fertilizer, antifreeze, plastics, pharmaceuticals and fabrics. It is also used to manufacture a wide range of chemicals such as ammonia, methanol, butane, ethane, propane and acetic acid. Despite the ubiquity of natural gas through many aspects of our life, natural gas has been likened to a “bridge fuel” for years, a source of electrical generation that can tide us over until renewables are ready

EIA Releases Annual Gas Report for 2015

The Energy Information Administration has released its Natural Gas Annual report for the year 2015.  It's a huge report, chock full of information from around the country. Here are some of the main points: * The 2015 Natural Gas Annual shows record U.S. natural gas production levels for the fifth consecutive year and record consumption levels for the sixth consecutive year.  * Domestic dry natural gas production of 27.1 trillion cubic feet (Tcf), or 74.1 billion cubic feet per day (Bcf/d), in 2015 was 4.5% above the 2014 level. For the third consecutive year, Pennsylvania saw the largest total gain in annual production, increasing from 11.56 Bcf/d in 2014 to 13.04 Bcf/d in 2015. Production in Ohio increased the most, percentage-wise, of any state, for the second consecutive year. Dry natural gas production in Ohio rose more than 99%, from 1.31 Bcf/d in 2014 to 2.62 Bcf/d in 2015.  * Deliveries to consumers of natural gas in 2015 were a record level of 25.1 Tcf, or 68.6 Bcf