A quick reminder that in spite of the impending snow storm which will be cleaned up by sometime Saturday, MDN editor Jim Willis will attend the 2pm Sunday, Feb. 10 screening of Phelim McAleer’s new documentary FrackNation at Regal Cinemas Binghamton 12 on Front Street in Binghamton. Phelim will be there! We’d like you to come along and watch it too (free). Here are the details:
In a story about a natural gas pipeline that will be run under a county-owned trail in Brooke County, WV, MDN spotted a brief mention about the signing bonus and royalty rate received by Brooke Hills Park in 2011 for drilling on 100 acres of park land. It is perhaps the highest per acre signing bonus we’ve seen for land in the Marcellus:
Yesterday MDN told you about the (likely) criminal act by Hardrock Excavating, a Youngstown, OH company owned by D&L Energy, when it dumped up to 50,000 gallons of fracking wastewater down a storm drain (see OH Company Dumps 50K Gal of Fracking Wastewater in Storm Drain). The fallout from that act continues. Yesterday the Ohio Dept. of Natural Resources (ODNR) revoked all operating permits—permanently—for both Hardrock Excavating and D&L Energy. Ouch.
D&L says it may appeal the ODNR decision to permanently shut them down…
A group of landowners who signed leases in western Pennsylvania with Energy Corporation of America (ECA) filed a lawsuit in June 2012 (Pollock, et al v Energy Corporation of America) alleging ECA improperly deducted certain expenses, and didn’t include certain revenues, when calculating and paying royalties. At the time, ECA counter-sued asking for summary judgment that the way they calculate royalties and revenues is OK according to accepted practice and previous court rulings.
Last fall Magistrate Judge Robert Mitchell “partially granted and partially denied” the summary judgment request from ECA. It was mostly a victory for ECA because it dismissed all but one of the charges by the landowners. The case was appealed by both sides to federal court and on Jan. 24, Judge Joy Flowers Conti of the Western District of Pennsylvania said Judge Mitchell’s interpretation of the case is correct. She upheld his decision. This is an instructive case for both landowners and drillers, and a caution to be sure the lease you sign spells out in minute detail how royalties will be calculated…
North Beaver (Lawrence County), PA supervisors have approved a request from LS Power Development to build a new $750 million electric generating plant at a former manufacturing site along the Mahoning River. The new 900-megawatt plant, when built, will be powered by Marcellus Shale natural gas. Current plans call for the new plant to be online by 2016.
National Fuel Gas Company released their earnings and operations update yesterday for what is their first quarter fiscal year 2013 (but would be fourth quarter 2012 for everyone else)—covering October through December 2012. National Fuel Gas’ exploration and production division is known as Seneca Resources—a major driller in the Marcellus Shale. NFG aka Seneca reports that production in the Marcellus region increased 48% over the same period a year earlier. Seneca continues to operate three drilling rigs in the Marcellus. Even though the company turned in a profit overall, Marcellus earnings were down $1.2 million for the quarter because of the low commodity price of natural gas.
Here’s the update form NFG/Seneca:
CONSOL Energy delivered an update on 2012 Marcellus Shale drilling activity yesterday—an update full of useful and interesting factoids. Among them: Due to extensions and discoveries, CONSOL added nearly 1 trillion cubic feet of natural gas to its proven reserves in 2012; they spent $440.7 million on drilling and completion in 2012; and their “drill bit finding and development cost” is 46 cents per thousand cubic feet (Mcf) of gas—among the lowest in the industry.
CONSOL continues to transition from being one of the country’s largest coal producers to one of the country’s major shale energy producers. Just a few weeks ago CONSOL announced their plans for 2013 (see CONSOL Energy’s 2013 Plan: Spend Lots on Marcellus & Utica Shale). Below is the 2012 shale drilling wrap-up CONSOL issued yesterday, which includes numbers for the average daily output from their wells in 2012, and the average cost to drill a well:
Houston-based Noble Energy, one of the big drillers in the Marcellus Shale, turned a tidy profit of $1 billion in 2012 according to their year-end financial report issued yesterday. That’s double what they earned in 2011 ($453 million). They also report Marcellus Shale production was up 19% in the 4Q12 from 3Q12—to a new high of 121 million cubic feet per day (MMcfe/d). Noble has a joint venture with CONSOL Energy in the Marcellus and the JV produced 280 MMcfe/d in 2012 (see Who’s a Member of the Marcellus “1 Bcf/d” Club?).
Noble operated three drilling rigs in the Marcellus during 2012. Here’s the year-in-review update issued yesterday:
The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading: