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Range’s Record-Setting Marcellus Well Nearly Ties Best Utica Well

super achieverYesterday on an their quarterly analyst phone call, Range Resources CEO Jeffrey Ventura announced the company drilled their best-ever well in the “super-rich” portion of the Marcellus Shale in southwestern Pennsylvania during 1Q14. Indeed, it is the best-ever Marcellus well drilled by anyone–not just Range. When we compare the results of Range’s top well with the best well we’ve heard of in the Utica–it nearly ties the top Utica contender, Antero Resource’s Yontz well (see Antero Resources Utica Well Produces Stratospheric 38.9 Mmcf/d). We were not able to locate the name or specific location of the Range well, but what we can tell you is this: It was drilled in SW PA on a pad with two other wells. It had an initial 24-hour rate of 6,357 barrels per day (versus the Yontz well’s 8,879 boe/d), or 38.1 million cubic feet equivalent per day (versus the Yontz well’s 38.9 Mmcfe/d). The Range well has a 7,065 foot lateral length (nearly a mile and a half long) with 36 stages tapping the Marcellus Shale. Truly impressive stuff. Even more impressive–there’s a Utica Shale layer below it and an Upper Devonian layer above it that Range can drill in the future. In other words, Range is just getting started.

Below we have a quote from CEO Jeff Ventura on yesterday’s investor analyst phone call along with the press release Range issued on Monday summarizing first quarter results. We’ve also included the PowerPoint presentation (VERY interesting slides) Range released on Monday…
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Range CEO & COO Talk Marcellus, Utica & More

Although analyst calls are sometimes dry affairs, MDN found a lot to like in yesterday’s Range Resources analyst call that discussed first quarter 2014 results along with some predictions for where the company is going. The call kicked off with Range CEO Jeffrey Ventura and Range COO and Executive VP Ray Walker. Here’s a portion of the transcript from the call worth reading:
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Belmont County Shopping New Deal to Lease Additional 426 Acres

Belmont County, OH commissioners like the $3 million check they just got from Rice Energy for leasing 406 acres of county-owned land (see Belmont County, OH Waiting for $3M Lease Check from Rice Energy). That’s $7,500 per acre for a signing bonus! Commissioners with Belmont like that gas money so much, they’re now looking to lease another 426 acres–at an even higher price. Oy vey!

The announcement about Belmont shopping for another lease deal came at a meeting last week…
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Moundsville, WV Vigilante Councilman Stops Tractor Trailer

Moundsville (Marshall County), WV Councilman Phil Remke illegally pulled in front of a tractor trailer hauling a backhoe traveling down a street he says the truck was not supposed to be traveling. Remke’s stunt, which endangered himself, the truck, and other motorists, elicited a police response. Remke says big trucks in the area hauling equipment for gas drillers are ruining city streets. Apparently Remke is patrolling on his own to ensure trucks don’t travel prohibited streets–even though he admits the signs prohibiting truck traffic on certain streets are too small and go unnoticed.

Here’s the story of the vigilante councilman in Moundsville…
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Williams Avoids Fine in WV for Marshall County Pipeline Explosion

Should drillers (and pipeline companies) be responsible for damage done from their installations if an accident occurs that’s not really the fault of the driller or pipeline operator? It’s a valid question, and one playing out in West Virginia. On Saturday morning, April 5th, a 12-inch Williams pipeline in Marshall County, WV exploded and burst into flames, resulting in damages to two acres of trees and causing the evacuation of nearby residents (see Williams Pipeline Rupture/Fire in Marshall County, WV). It appears, from all accounts, that a landslide put extreme pressure on the pipeline causing a welding joint to break, resulting in a spark, the explosion, and the fire (see Williams Restores Service on Ruptured WV Pipeline, More Details).

The West Virginia Dept. of Environmental Protection investigated and concluded that since there was no contamination of water supplies, it would not fine Williams for the explosion and fire that destroyed two acres of trees. Should Williams be on the hook anyway? Here’s an article detailing the WV DEP’s reasoning:
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CONSOL 1Q14: Top Mgmt Changes, Change to Shale Driller Continues

It’s hard to believe, but CONSOL Energy, originally a coal company, is 150 years old. The company was founded when Abe Lincoln was alive. As CONSOL’s current CEO Brett Harvey (retiring in May) says mentioning Abe and the age of CONSOL is relevant “because good assets, with the right strategy, are timeless.” CONSOL issued their first quarter operating and financial report yesterday (see it below). After experiencing a net loss last year at this time, CONSOL’s 1Q14 net income was a healthy $116 million on the black side of the ledger.

In the Marcellus Shale, CONSOL Energy and its joint venture partner drilled 35 wells, completed 23 wells, and had 11 wells turned in line. In the Utica Shale, CONSOL Energy and its joint venture partner drilled 7 wells, completed 3 wells, and had 10 wells turned in line. Below we have an overview of yesterday’s CONSOL 1Q14 report, the report itself, and a portion of an analyst call with top management…
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Latest Attack on PA Drillers: Discrimination

horse pooPennsylvania’s Act 13 Marcellus drilling law, passed two years ago and now partially gutted by seven selfish towns (see Act 13 Case Goes Back to Court, Drillers Petition to Join Lawsuit), has a provision that requires PA drillers to provide “maximum practicable contracting opportunities for diverse small businesses,” defined as minority, women, or veteran-owned businesses. Please don’t get us started on reverse discrimination in this country. Just play along for the moment and pretend such silly ideas are good and righteous (when indeed they are not). Fortunately the Act 13 law does not set quotas–but it does require an annual survey to be filled out and returned to the state. Apparently some drillers have not been filing their paperwork (naughty white boys) providing platitudes about how they try to find “diverse small business” to shower with their largess. Voila! A new, instant issue which anti-drillers will use to try and bludgeon to death the miracle of hydraulic fracturing and the economic miracle happening in Pennsylvania.

The hew and cry will go out that drillers are all white, rich men who discriminate against the poor and disadvantaged. Which is, of course, horse manure…
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Attorney Says Sunoco Should Seek FERC Approval for Mariner East

A Pittsburgh attorney, writing in the Pittsburgh Post-Gazette, weighs in on the complex issue of whether or not Sunoco Logistics is a public utility corporation under Pennsylvania’s definition with the right to use eminent domain to force landowners in Washington and Westmoreland counties to allow Sunoco to lay pipeline under their land. The pipeline in question, as we previously wrote about, is the Mariner East ethane pipeline. Sunoco needs to lay 50 miles of pipeline in western PA. Most of the Mariner East pipeline already exists (being repurposed) and stretches from western PA all the way to Philadelphia and the Marcus Hook refinery. Sunoco still needs to build 31 compressor stations along the pipeline’s route as it crosses PA (see More Pushback from PA Residents on Proposed Mariner East Pipeline).

Sunoco is facing a plethora of lawsuits and filings to counter their request to be declared a public utility corporation (not to be confused with being a public utility proper). Pittsburgh attorney William P. Bresnahan II says that Sunoco likely is a public utility based on a definition by the Federal Energy Regulatory Commission (FERC). He hints that if Sunoco plays their cards right–by which he means seeking and getting FERC approval for the Mariner East project–Sunoco will put to rest endless local lawsuits. However, getting FERC’s buy-in is not an easy matter…
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Anti-Drilling PA Dem Rep. Matzie to Introduce Seismic Testing Law

Anti-drilling Democrat PA Rep. Robert F. Matzie (District 16) is set to introduce new legislation in the Republican-controlled PA House that will make it nearly impossible for seismic testing to take place in the state. He intends to introduce a bill that automatically assumes seismic testing is responsible for damage to property within 1,000 feet of where it happens. If a thumper truck goes down your road, and you want to get that crack fixed that’s been in your basement wall for the past 10 years, here’s your chance. Just claim seismic testing is at fault and send the bill to the testing company. Nuts.

Here’s the rather funny announcement from Matzie saying this legislation is really not anti-drilling, oh no, and that he only wants to protect Pennsylvanians from evil, nasty seismic testing companies…
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More Specifics on Deal for Georgia Pipeline Flowing Marcellus Gas

Two weeks ago MDN told you the good news that Marcellus Shale gas will soon be on its way to Georgia (see Marcellus Gas Heading to Georgia via Transco Pipeline). The Williams Transco pipeline expansion to Georgia is called the Dalton Expansion Project and is already 100% spoken for. In the announcement from two weeks ago we learned that Williams’ partner in the expansion is AGL Resources, a natgas distribution, wholesaler and midstreamer with headquarters in Atlanta, GA. The new pipeline expansion in Georgia will be owned 50/50 by Williams and AGL.

We now have a few more specifics about the AGL/Williams deal, including the fact that AGL is putting up $210 million to help fund the project…
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BP Calls it Quits in the Utica Shale – Total Write-off

I QuitA sad day for landowners in Trumbull County, OH. Flashback: In March 2012 BP leased 84,000 acres in Trumbull County, OH from the Associated Landowners of the Ohio Valley (see BP’s Big Utica Shale Deal, Leases 84K Acres in Ohio). Just two years later and what started out with great fanfare is all down the toilet. BP announced today they are pulling out of the Utica Shale and writing it all off. In a very brief mention in a press release issued this morning about first quarter 2014 results, BP says: “Following on from the decision to create a separate BP business around its US lower 48 onshore oil and gas activities, and as a consequence of appraisal results, BP has decided not to proceed with development plans in the Utica shale. The Upstream result includes a write-off relating to the Utica acreage.”

Last November MDN wondered aloud whether BP would decide to move forward, or call it quits (see Decision Point: Will BP Drill Their Utica Acreage? Or Pass?). Now we know. Why leave? As we pointed out at the time, Trumbull County has proven to be mostly dry gas, and not wet gas (or natural gas liquids) which makes it a much less profitable part of the play to drill in. BP rolled the dice and bet wrong. The only other driller in Trumbull has been Halcon Resources. They pulled out too (see Halcon Resources Stops Drilling, Gives Up on the Utica Shale). Is there any hope for future Utica drilling in Trumbull County?…
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Williams Stops Work on Bluegrass Pipeline, Boardwalk Says “It’s Not Dead”

Really big news that affects drilling throughout the Marcellus and Utica Shale region: Williams announced yesterday they are suspending work on the Bluegrass Pipeline, a $1.5 billion project that would have piped natural gas liquids (NGLs) from the Utica/Marcellus all the way to Gulf Coast for processing and sale. Looks like we now know who the winner of the “midstream knife fight” is: the Kinder Morgan/MarkWest joint venture UTOPIA pipeline (see “Midstream Knife Fight” – Who Will Have 1st Operational NGL Pipeline to Gulf?). Although Williams says the project is done, their joint venture partner in the Bluegrass, Boardwalk Pipeline Partners, says “it’s not dead.” Really? What does that mean?

Below we have the Williams statement that the Bluegrass is dead, the quote from Boardwalk saying it isn’t dead, and our opinion as to what may have pushed Williams to throw in the towel on this very important project, potentially leaving northeast drillers without options for NGLs…
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Boardwalk Talks About Bluegrass: That’s My Story and I’m Sticking to It

Yesterday Boardwalk Pipeline Partners held an analyst call to update investors on their first quarter 2014 performance. As we wrote about a few months ago, Boardwalk’s stock fell off a cliff (down 50%) and is just now beginning to inch it’s way back up the cliff (see Serious Concerns about Boardwalk Pipeline Partners Continue). Yesterday’s analyst call coincided with the release of information that both Williams and Boardwalk, together in a joint venture to build the Bluegrass Pipeline, an important northeast to Gulf Coast NGL pipeline, have decided to suspend work on the pipeline. Williams hints that the project is all but dead, but Boardwalk says it isn’t (see our related story today).

We located the transcript of yesterday’s analyst call with Boardwalk and have extracted out all of the places where the Bluegrass was discussed. It’s interesting reading, providing us with a bit more color and context. For us it evokes Collin Raye’s song, “That’s My Story and I’m Sticking to It” as we read the comments by Boardwalk and the press release by Williams. Both partners have obviously decided to script the announcement–both are singing from the same song sheet, as it were. The stated reason they’ve stopped working on the Bluegrass? Not enough customer interest. Which, as we point out in today’s related story, we think is sort of bogus. Here’s what was said yesterday on the Boardwalk call about the Bluegrass suspension…
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Top 10 Oil Wells & Top 10 Gas Wells in Ohio for 4Q13

top-10.jpgContrary to the all-but-silent treatment Utica Shale oil gets, drillers are pumping oil from the Utica. Quite a bit of it, as it turns out. They’re also pumping huge quantities of natural gas.

Last week MDN friend Bob Downing, reporter for the Akron Beacon Journal, did a great analysis of Q413 production numbers. He produced these two lists of “top 10” for oil producing wells and for natgas producing wells…
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OH Production for 4Q13: Natgas Up 28%, Oil Up 8%

Last week the Ohio Dept. of Natural Resources (ODNR) released it’s now quarterly production report–for fourth quarter 2013. The report shows natural gas production zoomed up by 28% while oil production increased by 8%. The report shows 352 wells were producing as of the end of the year. They produced a collective 1.4 million barrels of oil for the quarter, and 43 billion cubic feet of natural gas.

Below is an overview and analysis of the numbers, followed by the raw report (spreadsheet format) from the ODNR…
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