Marcellus & Utica Shale Story Links: Tue, May 28, 2013

The “best of the rest” – stories that caught MDN’s eye that you may be interested in reading:


Maryland Legislature Anticipates Development of Marcellus Shale
Maryland recently enacted legislation, Senate Bill 854, which amends Title 14 (Oil and Gas) of the Environment Article, Annotated Code of Maryland, and imposes reclamation and financial assurance requirements. The new legislation adds the requirement of site reclamation as a permit condition, and replaces the existing bonding requirement of $100,000 (single well) or $500,000 (blanket bond) with a minimum bond of $50,000 per well and not less than “the most recent closure cost estimate.” The legislation also requires a permittee to carry a minimum of $1 million in environmental liability insurance, in addition to the existing requirement to maintain general liability insurance.

New York

Turning the Heat Up in Albany with a Natural Gas Petition
Energy in Depth – Marcellus
The New York chapter of a national advocacy group has grown weary of the the state’s moratorium against natural gas development. It recently launched an online petition to the Governor and the Legislature calling for action.


Halcon’s Utica Test Wells Disappoint Analysts; EVEP Charges On
NGI’s Shale Daily
After disconcerting Utica Shale production figures were released earlier this month by Ohio regulators, industry analysts said they were disappointed with the results of the first two test wells Halcon Resources Corp. drilled in the play, and EV Energy Partners (EVEP) said it is continuing to look for buyers interested in its holdings there. On Thursday, Houston-based Halcon said its Phillips 1H well, located in Mercer County, PA, tested at a peak rate of 2.5 MMcf/d of natural gas and 120 b/d of condensate. The company said that based on composition analysis and assuming full ethane recovery, Halcon estimates the well, which is currently being placed into a sales pipeline, would produce an additional 240 b/d of natural gas liquids (NGL) for a total peak production rate of 730 boe/d.

The Utica Shale Does Not Seem To Be The Ace Up This Producer’s Sleeve
Seeking Alpha
Halcon’s valuation has been a very interesting case for me since early 2013. I was wondering why it had such a staggering valuation at $8 in early February 2013. I could not find any fundamental reason to support that valuation, and I made a bearish call back then. I also shorted it as disclosed. The stock dropped down to ~$6 few weeks later, confirming my bearish call.

Seismic mapping trucks to return
Columbus Dispatch
An Ohio seismic mapping company will be making its way through Marietta in early July, nearly a year after heavy vibrations created by a Texas seismic mapping company caused area residents to complain of the lack of notice and intrusiveness of the project. The vibrations created last July by vehicles from Tidelands Geological Company (TGC) of Plano, Texas were likened to an earthquake by some taken by surprise by the large trucks moving through.

Gas and Oil Summit Held at Marlington High School in Stark County Thursday
Ohio Oil & Gas
“Today’s talk reaffirmed we are dong the right thing,” said Nick Evanich, career tech director at Marlington High School, following a Gas and Oil panel discussion held on the school grounds Thursday. “We’re preparing the kids with basic skills that will serve them in a variety of opportunities in the future. These skills will help them whether they go to work at Enviroscapes, landscaping, EnerVest, well tending, or at a Midstream plant like the one being built in Scio. We’ve got to keep developing it. It was great to have the state here to show us they’re behind us as we continue to serve as trendsetters in training the school students and getting them ready for jobs in the gas and oil industry.”

Water for local gas and oil drilling is coming from ponds, public water supplies
Youngstown Vindicator
A large issue that has bubbled below the public consciousness has been the negotiations between public water authorities and drilling companies. Though fracking sand, drilling rigs and workers can be trucked in, water is a resource vital to drilling that generally comes from close to home.

Chesapeake Energy: Will It Benefit From The Shale Gas Bonanza?
Seeking Alpha
Chesapeake holds the industry’s largest position in the Ohio’s Utica shale with about 1 million net acres of leasehold. Production growth is expected to accelerate this year as midstream constraints are reduced and the natural gas processing plants of two new third-parties come online. Recently, the company drilled the Coe 1H with a peak rate of 2,225Boe/d. Chesapeake will count by mid 2013 on three processing plants for the Utica play.


The DRBC Dance Around the Stonewall
Energy in Depth – Marcellus
The Northern Wayne Property Owners Alliance is engaged in a tug-of-war with the DRBC over access to the latter’s communications with natural gas opponents. The DRBC leadership is doing a dance around a stonewall erected to prevent those communications. They may hear a lawsuit coming downriver over the agency’s taking of property rights by default.

Protesting Natural Gas Usage to Get Cleaner Air. Huh?
Energy in Depth – Marcellus
The Clean Air Council (CAC) has been behind most, if not all, of the compressor station hearings in the Marcellus region. They travel here from Philadelphia, use big numbers taken out of context and faulty modeling studies like the one discussed earlier this week on this blog to cause undue alarm in residents. It’s fear mongering at its worst. They have an agenda (and a grant) to stop all natural gas development, and they’re doing so by targeting infrastructure. Now they’ve taken their road show to another level. This group, hailing from a large natural gas usage market, is also trying to stop distribution to homes and businesses in Luzerne County, another area with a heavy reliance on natural gas, targeting a long time business in the state: UGI Utilities.


Industry giant GE invests billions in fracking boom
AP/Youngstown Vindicator
One of America’s corporate giants is investing billions of dollars in the new boom of oil and gas drilling, or fracking. General Electric Co. is opening a new laboratory in Oklahoma, buying up related companies and placing a big bet that cutting-edge science will improve profits for clients and reduce the environmental and health effects of the boom.

Did the shale revolution already find its biggest oil field at the Eagle Ford?
Credit Suisse said, which echoes the sentiments of many in the industry, that it was “skeptical” a new large field on the order of the Eagle Ford Shale in South Texas would happen. The Eagle Ford is one of the most prolific shale fields which boasts an estimated 943,000 b/d of liquids production and is forecast to produce 1.6 million b/d by late 2018. Instead, Credit Suisse said existing areas with “stacked” pay targets — i.e., layered formations –are better bets right now. When you consider how far industry has come in the last five years alone, it seems almost reactionary to make such a statement. And Credit Suisse is far from alone in that view: many executives share it — even from top shale producers.

Revisiting This Week’s Natural Gas Hearings
Energy in Depth
This week, the U.S. Senate Committee on Energy and Natural Resources held a series of roundtables to discuss natural gas and its role in the American economy. From infrastructure and LNG exports to environmental protection and best practices, the committee gathered an array of stakeholders to discuss all facets of development. As to be expected, shale was a major focal point throughout the hearings. Like any event on Capitol Hill, the discussions brought up perspectives from all sides. Experts from industry sat across from state and federal regulators, environmentalists, and lawmakers alike, debating and sharing their thoughts on the development, extent, and end use of our abundant natural gas supplies.

Williams: Struggling Now But Opportunities Abound
Seeking Alpha
Williams Companies has consistently missed earnings estimates over the last year, but the company has a ton of growth opportunities in the decade ahead. The company has been hit with lower natural gas liquids (NGL) margins and Ethane rejections along with higher natural gas prices. Williams has one of the leading energy infrastructures in North America. It owns interests in, or operates, 15,000 miles of interstate gas pipelines, 1,000 miles of NGL transportation pipelines, and more than 10,000 miles of oil and gas gathering pipelines.