Aubrey McClendon’s Wandering Eye: Now Loves a Second Shale Play

The PhilandererDoes Aubrey McClendon have a wandering eye? Is he a shale play philanderer? It seems to us that since Aubrey was shown to the door of his own company (Chesapeake Energy) last year by corporate raider Carl Ichan, the only word to come out of Aubrey’s mouth has been “Utica.” It’s been Utica this and Utica that. He’s now raised more than $2.9 billion (!) for Utica Shale land acquisition and drilling (see McClendon Hauls in Another $1.2B, Utica Shopping Spree Continues).

But what’s this? Another shale play–closer to home (in Oklahoma)–seems to have caught Aubrey’s fancy and he’s now engaging in a dalliance back home. He’s already raised a cool $680 million for his new shale mistress…
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Economist Releases Report on WV Cracker Plant’s Economic Impact

West Virginia’s coming ethane cracker plant continues to generate positive economic news. Yesterday the former director of West Virginia University’s Bureau of Business and Economic Research and professor emeritus at WVU, Tom Witt, released a study he conducted on behalf of Braskem America (i.e. Odebrecht, the company building the cracker). The new study details specifics for how many jobs and how much money the proposed cracker and associated petrochemical plants will generate. And it’s truly astonishing.

Here’s an overview of the economic miracle about to hit WV (and beyond)…
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Chevron Well Fire Update: 2nd Well Capped, Work on 7 Wells Stopped

We’ve been monitoring the tragic well fire in Greene County, PA that claimed the life of one contract worker. On Sunday afternoon Chevron reports the original well to explode and catch fire, the Lanco 7H, was capped (see Greene County Chevron Well Fire: 7H Well Capped, 6H in Few Days). Chevron now reports the second well to catch fire from the first, the Lanco 6H, is also capped as of yesterday afternoon (see the announcement below). What we somehow missed in the coverage was the fallout from the fire. Last week the PA Dept. of Environmental Protection asked Chevron to suspend drilling operations at other wells in the area pending a review. Chevron responded they had already stopped drilling operations at 7 nearby wells.

Here’s the latest official announcement from Chevron (that does not mention shutting down operations on other wells), along with a story from last week about the DEP’s tete-a-tete with Chevron:
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Join MDN in Pittsburgh on March 20 at Conference for Excellence [Free]

You're InvitedPlease join me (MDN editor Jim Willis) at the Northeast Conference for Excellence on March 20, 2014 in Pittsburgh at the Westin Convention Center. The Conference for Excellence is hosted by the Oil & Gas Awards organization. I’m proud to say that I helped create this year’s conference program and I will be moderating two of the sessions–one on drilling and completions, and another on environmental health and safety. I would LOVE to see you at this event.

This is an “industry” event–by and for those who work in the oil and gas industry, particularly in the Marcellus and Utica Shale, from upstream to midstream to downstream. Your cost to attend? Zero. But, there is a catch…
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Survey Says! OU Survey of Local OH Officials on Utica’s Impacts

Two days ago the Ohio University Voinovich School of Leadership and Public Affairs released the findings of its much anticipated Ohio Shale Development Community Impact Survey. During summer of 2013, the Voinovich School distributed more than 500 surveys to local elected officials across 17 counties experiencing the majority of shale activity and development in Ohio. The survey assesses the impact of shale development within 17 counties in eastern Ohio, with a focus on population, housing, public safety, infrastructure, environment, local employment, area business activity, and economic development. Some 200 of those surveys were returned and the data tabulated.

What did the survey find? Ohio’s local elected officials say Utica Shale drilling has caused an marked increase in jobs and the occupancy rate at hotels. But Utica drilling has also caused some pollution issues and a big increase in the demand for water supplies. This is a very interesting study (full copy embedded below)…
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Range Resources’ Laser Focus on the Marcellus Continues into 2014

Range Resources, the first and one of the largest drillers in the Marcellus Shale, issued their fourth quarter 2013 and full year 2013 financial and operational update yesterday. Range has a lot of good news to report. They averaged 940 million cubic feet equivalent of natural gas production per day during the year, but as MDN noted in December last year, they have now exceeded 1 billion cubic feet per day average (see Range Resources Inducted into the Marcellus “1 Bcf/d Club”). Proved reserves were up for Range by 26%, to 8.2 trillion cubic feet. Cash flow was up 25%, to $943 million. Perhaps the only “bad news” was that profits in the fourth quarter were down by 47%, to $28.2 million, mainly because of the low commodity price of natural gas. Everything else appears to going quite well for this Marcellus powerhouse.

In 2014 Range plans to spend $1.52 billion on capital expenditures (drilling and associated costs). The vast majority of that–87%–will be spent in the Marcellus. They expect to boost production another 20-25% in 2014. The company is on a tear! Below are details of how many wells Range drilled in the Marcellus in 2013, and how many they plan to drill in 2014, along with loads of other details about their drilling operations…
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Carrizo CEO Says Transition to Focus on Oil “Now Completed”

Last November MDN told you that Carrizo was de-emphasizing the Marcellus and instead focusing on more oily and wet gas plays, like the Utica (see Carrizo Down on Marcellus, Up on Utica and Other Wet/Oil Plays). In releasing their 2013 fourth quarter and full year results yesterday, Carrizo’s CEO Chip Johnson said, “We began our shift from gas to oil back in 2010, and I’m pleased to say that we’ve now completed the transition. Crude oil now accounts for more than 60% of our proved reserves, and even though we sold almost 45% of our 2012 U.S. reserve base through our Barnett Shale and other non-core divestitures, we were still able to increase our PV-10 by 44% in 2013. Oil also now accounts for the majority of our production, as we expect it to be approximately 60% of 2014 volumes.”

Does that mean Carrizo is exiting the Marcellus completely? Not according to the update. Carrizo drilled 6 Marcellus wells in 4Q13. They complain that midstream (pipeline) delays continue to “impact” their operations in the Marcellus, along with really low commodity prices. So for now they’ve pulled back. For 2014 they plan to complete the wells they’ve already drilled–24 in all, and finish up drilling 3 wells already begun. According to our trusty NGI’s Shale Play Factbook, Carrizo owns leases on 49,200 acres in the Marcellus (and 21,700 acres in the Utica). Here’s yesterday’s update which clearly details the oil/wet gas direction of the company…
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Latest Hypocritical Protest of PA’s State Forest Drilling Plan

A handful of anti-drilling nutters–mostly washed up hippies from the 60s–held a protest rally in Harrisburg at the PA State Capitol yesterday to object to the very thing one of their icons, Ed Rendell (and his DEP Secretary John Hanger) themselves did: allow a little bit of drilling under (not on) state forests for natural gas. The hypocrisy was on full display as a small group, inflated by media reports as some sort of huge, massive movement thing, gathered to get their photo op before retiring to the nearest Starbucks to sip coffee created by machines operating on natural gas in a shop heated with natural gas to discuss how great it feels to relive the good ole days of protesting.

Here’s how the reliably anti-drilling StateImpact Pennsylvania reported the so-called “rally”…
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