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OH Repubs Sell Out on Severance Tax, Kasich Wants Even More!

As we predicted, Ohio Republicans caved and voted a high severance tax out of committee on Wednesday (see Bend Over Ohio – You’re About to Get a Frack Tax). The Republicans think it’s fine to steal money from one industry to give away to people who didn’t earn it. The Democrats are even worse. But here’s the funny thing. Ole’ Gov. John “foreigner hunter” Kasich isn’t satisfied with the Republican plan to raise the rate to 2.5%. He wants more (more more more!).

Since the Repubs have already bent over once, will they do it again for Kasich?…
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Gulfport Energy 1Q14: New CEO Tweaking the Utica Program

Gulfport Energy is a major driller in the Utica Shale. In a first quarter 2014 update released earlier this week, we learn that Gulfport has added more acreage to their Utica portfolio–they now stand at 180,000 acres of leased land. Although several other drillers own more acreage, Gulfport has drilled the second highest number of Utica wells to date. They currently are operating seven drilling rigs in the Utica Shale. Gulfport’s brand new CEO, Michael Moore, makes the comment that, “a more measured, methodical approach to the development program in the Utica was needed.” We’re not exactly sure what that means, but Moore intends it to mean they’ll get more gas and liquids from the Utica wells their drilling.

Below are a few brief sections from the 1Q14 update. We also found and posted Gulfport’s PowerPoint used during their recent analyst call. There’s an extensive section on their Utica operations with lots of maps and charts and good information. Among the gems we discovered is that in 2013 Gulfport and Rice Energy formed a joint venture, combining their acreage in four townships in Belmont County, OH to drill in the Utica together in that area…

NOTE: MDN originally said the Gulfport/Rice jv is for Guernsey County, OH. We were mistaken. It is in Belmont County, OH. Our apologies!
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Chesapeake’s Born Again Zeal for Utica Dry Gas Drilling

Sounding positively ebullient, Chesapeake Energy has let it be known that they are going after dry gas areas in the Utica Shale. Chessy has been testing–and they like what they see from methane-only areas where they happen to own hundreds of thousands of acres of leases in Ohio.

Is it fake enthusiasm because they mostly missed the wet gas area of the play when they leased and they want to psyche out investors? You decide. Appears to us like they are genuinely enthusiastic about dry gas drilling in the Utica. Who knew?…
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Bend Over Ohio – You’re About to Get a Frack Tax

In classic socialist manner, a Republican-controlled Ohio House committee is set to vote today on a “compromise” (meaning it will hurt just a little less) bill that will raise Ohio’s severance tax on shale drilling, thereby reducing the economic miracle in the state. We’re still “months away” from final passage of the measure, but if this vote goes in favor of a high frack tax, you can be sure it will pass the full House and Senate. Which is unfortunate for Ohio’s landowners, drillers and the many people who now work for the industry and related businesses that sell to the industry. It will certainly mean a slow-down in drilling.

All because Gov. John “foreigner hunter” Kasich wants to transfer wealth from those who produce it (landowners and drillers, out of whose pockets it will come) to those who do not produce (via a state income tax cut). It’s sleazy–but there you go. Of particular interest is that most of the new tax (85% of it) will go out of the communities where drilling actually happens. The political calculation is that a few pennies on the dollar will buy those communities’ silence that they’re being robbed (better something than nothing, right?). In Pennsylvania, 60% of the money raised through a reasonable impact fee stays in the communities where drilling happens. That’s the right way to do it…
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Utica Driller Eclipse Resources Files IPO – Wants to Raise $100M

Last November MDN told you that Utica Shale driller Eclipse Resources was talking about a possible initial public offering (IPO) in 2014 (see Utica Driller Eclipse Resources Talking IPO in 2014). It’s no longer just a possibility. Yesterday Eclipse filed with U.S. regulators for an IPO in which they hope to raise $100 million.

Eclipse has 90,000 acres in the Utica shale and 20,000 acres in the Marcellus shale–both in Ohio…
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Ohio Quarterly Shale Jobs Report – Shale Jobs Up 79% in 2 Years

Each quarter the Ohio Dept. of Jobs and Family Services issues a report on how the Ohio shale industry is faring with respect economic impacts and the number of jobs. The April 2014 edition of that report was just released (see a full copy embedded below). What does the state’s own research show? In the two years from Q3 2011 to Q3 2013 core shale-related industry employment (like pipeline construction and well drilling) was up 5,763 (79.0 percent). Employees in core jobs had an average wage of $71,661. To which we say, that ought to make OH Gov. John “foreigner hunter” Kasich happy! He doesn’t like foreigners (people from Texas and Oklahoma) takin’ good Ohio jobs–so every now and again he prowls around on patrol (see OH Gov. Kasich Goes After Out-of-State Engineers/Surveyors).

The report contains a lot of great charts and maps and helpful information to understand the economics of shale in Ohio–we encourage you to take some time with it. Here’s a good overview of the report from Columbus Business First:
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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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Northeastern Ohio Benefits from Shale Too, Just Different

There’s not much drilling in the Utica Shale in northeastern Ohio, but that doesn’t mean folks in the northern part of the state don’t benefit (and profit) from it. In fact, many in northern Ohio are downright excited about what’s happening in the state. Why? Because the plastics industry, which uses byproducts from natural gas liquids (NGLs) being extracted in Ohio, is taking off like a rocket, providing jobs, products and an economic bonanza in northern Ohio and indeed throughout the state…
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Ohio Business Roundtable Sells Out – Endorses High Severance Tax

With Friends Like TheseUnbelievably, the Ohio Business Roundtable, comprised of CEOs of big businesses in Ohio, has endorsed a high severance tax on Utica Shale drilling. The OBR is using (abusing) an Ernst & Young “analysis” to say, in essence, go ahead and screw drillers and landowners–the drillers will stick around because they get screwed worse elsewhere. We’re somewhat befuddled at how the OBR can say it’s OK to steal the wealth from a specific industry and transfer to others who didn’t earn it. But we’re simple folks in our reasoning power. All’s we can say is that, with friends like these…

Below is the statement from the OBR and a copy of the “analysis” done by E&Y that blesses a high severance tax and makes it OK for Ohio’s RINOs to force it through.
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Utica/Marcellus Welders Making $150K/Year – More Needed

In a Wall Street Journal op-ed article, Ohio State Treasurer Josh Mandel says schools might want to think about bringing back shop class. Why? Because companies like Pioneer Pipe, operating in Ohio’s Utica Shale, can’t find enough certified welders to keep up with the demand. Right now Pioneer employs 60 welders who make over $150,000 per year!

Let’s see–go to college, get a four-year degree, and end up working at Starbucks. Or, go to trade school (or shop class), become a certified welder, work hard and join the ranks of what President Obama calls the 1% (those earning over $150K a year)…
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OH County Commissioner Says ‘No Thanks’ to Severance Tax Increase

A lone voice crying in the wilderness! Amid all of the calls for more socialism–redistributing the hard-earned money from landowners and drilling companies to people who didn’t earn it via a higher severance tax–a Washington County, OH commissioner says “No!” He says raising the severance tax is a fundamentally bad idea and he does not endorse the Republicans’ dalliance with the idea.

And so we bring you a letter to the editor reprinted in the Parkersburg (WV) News and Sentinel from Washington County, OH commissioner Ron Feathers, a man we salute!…
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Aubrey McClendon Leases Rigs from Chesapeake to Drill in the Utica

Aubrey McClendon, the former CEO of Chesapeake Energy (before corporate raider Carl Icahn tossed him from the company he founded) is back in business with Chesapeake. Sort of. McClendon’s new company, American Energy Partners, which is set to go great guns in the Ohio Utica Shale, is leasing drilling rigs from Chesapeake for $26,000 per day–six of them (with a seventh at $23,500 per day). Makes for strange bedfellows, no? But hey, a rig’s a rig’s a rig. Doesn’t matter who owns it. What matters is to get drilling now, before the competition. And Aubrey is all over it.

However, Aubrey is being mum on the arrangement. Here’s the little that is know, picked up from Chesapeake’s financial filings with the SEC…
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Labor Unions a Powerful Ally for Northeast Shale Industry

Unions in Pennsylvania, West Virginia and Ohio are backing shale drilling in a big way, and that’s giving lefty Democrats heartburn. The unions note that in the early days of northeast shale drilling a lot of the help came from out of state–places like Texas, Oklahoma and Louisiana. But that’s changed. Today most of the workers are local, and many of them belong to labor unions. Regardless of your opinion on labor unions, there is one inescapable fact–their members want jobs and they’re willing to work and work hard in those jobs.

Labor unions have become an important and powerful ally for the drilling industry. Here is that story…
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OH Anti-Driller Suing MWCD Asks EPA to Stop OH Injection Wells

The virulently anti-drilling and misnamed Fresh Water Accountability Project (FWAP) has just generated more toilet paper, er, a press release in which they claim they’ve written a letter to the Region 5 office of the federal Environmental Protection Agency asking the EPA to trample on the U.S. Constitution by stripping away the right of Ohio to issue permits for Class II injection wells. Nothing new there–such groups habitually like to enforce their fascism on common folks (which is why they should be vigorously opposed and defunded).

The interesting thing to MDN is not that the FWAP is generating yet another fundraising press release–but that it was written by Lea Harper–you know, the woman who’s suing the Muskingum Watershed Conservancy District to try and stop fracking and drilling on MWCD land around Seneca Lake (see Anti-Drillers Win Minor Victory Against Muskingum Watershed Dist). It’s also no coincidence that Lea Harper and her FWAP is being partially (or wholly) funded by the odious and fascist Food & Water Watch. That is, FWAP is nothing more than a front for FWW. We just thought you’d want to know how incestuous it is with anti-drillers…
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Did ODNR Overreact & Set Earthquake Detect Bar Too Low?

An article in the Cleveland Plain Dealer provides some perspective on Ohio’s new rules regarding fracking and earthquakes. As MDN reported yesterday, the Ohio Dept. of Natural Resources (ODNR) is sortof, kindof convinced that a fracking operation over a previously unknown fault line triggered a series of earthquakes (see ODNR Says Youngstown Earthquakes “Probably” Caused by Fracking). The earthquakes were essentially undetectable at the surface, but it makes for great headlines.

What else can trigger an earthquake? How about 67,000 football fans stamping their feet? Yep–that happened earlier this year in Seattle, WA at CenturyLink Field during the NFL playoffs. Marshawn Lynch made a touchdown and the fans went wild, stamping their feet, which created a detectable earthquake–at the same level now measured for in Ohio. All of which means Ohio has set the bar pretty low and just about anything can set off the earthquake alarm…
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